Automotive , Healthcare , Financials Author：Linyan Feng Jul 17, 2019 04:45 PM (GMT+8)

Massive adjustments will happen to Banma due to internal interest conflicts.

Car driving. Image credit: Samuele Errico Piccarini on Unsplash

Banma Network Technologies (斑马智行) tends to incorporate Alibaba Group's AliOS Auto team soon, 36 Kr reported Tuesday.

The people, who know this matter, told the news platform that Alibaba would separate AliOS Auto team from its original system and Banma would pay a fee to take over it. After integration, Banma and AliOS Auto team will transform into a unity rather than the previous supporting relationship between front and back ends.

So far, a number of investors such as GAC Capital (广汽资本) showed the will to pour money into the new entity. With external capital invested in, the initial shareholder Saic Motor (上汽集团) may transfer out part of its shares and Alibaba Group will, therefore, become the biggest shareholder and take control of Banma.

Xu Hua (徐华), Banma's marketing director, said there would be massive adjustments between Banma and AliOS but he cannot give more details as everything is in process.

The incentive behind adjustments refers to conflicts of interest between Alibaba and Saic Motor, with each taking 45% shares initially. Since Banma's in-car networking system gained huge success on Saic Roewe automobile, AliOS Auto team has been restricted to serve only to Banma as negotiated at the beginning of founding, despite its desire for bigger development. As the service provider, Alibaba strives for the scale of economics and network effects to maximize profits, whereas Saic Motor manages to take advantage of competitive resources and keep software price low. Banma gradually got lost in the controversial development targets.

Acquiring AliOS Auto team can be a significant strategy for Banma's business development as Banma has more freedom to operate services in the future. Integration of AliOS into Banma could propel the two entities into deeper cooperation with car manufacturers.

At the 2019 Banma Exploration Conference held in July, Banma again clarified its comprehensive opening strategy.