Cheche Group Inc (Cheche), a leading auto insurance technology platform in China, has announced a strategic partnership with Wuhan Dongfeng Insurance Broker Co Ltd (Dongfeng Insurance). Dongfeng Insurance is affiliated with Dongfeng Motor Group Company Limited (Dongfeng Motor Group), a major state-owned automotive enterprise.
Expanding Presence in the NEV Market
This partnership marks a significant step in Cheche’s strategy to strengthen its presence in the new energy vehicle (NEV) sector. Dongfeng Insurance oversees insurance operations for all brands under Dongfeng Motor Group, which owns a 49.5% stake in the brokerage. Dongfeng Motor Group is renowned for producing and marketing various automotive brands, including Fengdu, Aeolus, Forthing, VOYAH, M Hero, and NAMMI. The group also manufactures vehicles through joint ventures with international automakers like Honda, Nissan, and Peugeot-Citroën.
Focus on VOYAH
The initial phase of the collaboration will center on VOYAH, Dongfeng Motor Group’s luxury NEV brand. Cheche will provide national licensing and a comprehensive range of insurance services across VOYAH’s network of more than 900 delivery stores throughout China.
Cheche’s founder, CEO, and chairman, Lei Zhang, highlighted the importance of this partnership. “The alliance with Dongfeng Insurance represents a major milestone for Cheche, reinforcing our role as the leading intelligent insurance platform for NEVs in China,” Zhang stated.
Recent Partnerships and Future Plans
This new deal follows Cheche’s recent collaborations with Beijing Anpeng Insurance Broker Co Ltd and NIO Insurance Broker Co Ltd in June. Moving forward, Cheche plans to leverage its technology and services to enhance its partnership with Dongfeng Insurance. The company is also exploring opportunities to extend its digital insurance solutions to other brands within Dongfeng Motor Group and continue its focus on both NEV and traditional vehicle markets.
Growth Outlook for China’s Motor Insurance Sector
China’s motor insurance market is expected to grow at a compound annual growth rate (CAGR) of 5.4%. Gross written premiums (GWP) are projected to increase from CNY 912.2 billion (US$127.4 billion) in 2024 to CNY 1,125.7 billion (US$158.9 billion) by 2028, according to forecasts by GlobalData.
GlobalData’s research indicates that the sector will experience a 5.2% growth in 2024, driven by rising vehicle sales, increased demand for NEVs, and supportive regulatory changes. Vehicle sales in China rose by 10.6% in the first quarter of 2024, reaching 6.72 million units, as reported by the China Association of Automobile Manufacturers (CAAM). Government policies, such as tax exemptions for NEVs and trade-in subsidies, are anticipated to further boost the motor insurance market.
NEVs represented 30% of total vehicle sales in the first ten months of 2023, with China’s market share for new energy passenger vehicles increasing from 41% in 2020 to 65% in 2023.
“Growing demand for new and next-generation vehicles will drive the expansion of China’s motor insurance industry over the next five years,” said Sutirtha Dutta, an insurance analyst at GlobalData. However, Dutta cautioned that the sector might face challenges from higher claim payouts and increasing accident rates, which could impact profitability in the short term.
