(Yicai Global) Dec. 27 -- Chinese autonomous driving startup Pony.ai and logistics group Sinotrans will set up a joint venture to build a smart logistics transport platform with self-driving technology as its heart and explore ways to use autonomous trucks on a mass scale.

The pair signed the agreement today and new company will go into operation early in the new year, they separately announced today. In the early stage of their cooperation, the partners will invest CNY100 million (USD15.7 million) with the aim of developing a domestic-leading fleet of 100 smart-driving heavy-duty trucks.

Pony.ai said there is likely to be a huge shortage of truck drivers in the future, and autonomous driving can plug the gap. The technology can also greatly extend the mileage each vehicle can travel every day, improving efficiency and vehicle usage, it added.

The JV will build a fleet of smart-driving heavy-duty trucks to provide safer, more efficient, and low-cost transport services and freight solutions, the Guangzhou-based company said.

Sinotrans and Pony.ai’s truck business department PonyTron jointly started a long-distance demonstration project for self-driving trucks in June, laying the foundation for the pair’s in-depth partnership.

The market for driverless trucks, mainly used for trunk and port logistics, is quite large. China has 3.14 million registered heavy-duty trucks used in trunk route shipping, with the potential market for autonomous driving services worth CNY767.9 billion (USD120.5 billion), according to a report by think tank EqualOcean Intelligence.

China Merchants Group is the parent company of Beijing-based Sinotrans, which was 131st on the Fortune China 500 rankings last year.

Set up at the end of 2016, Pony.ai started business from China and the United States and has research and development centers in Silicon Valley as well the Chinese cities of Beijing, Guangzhou, and Shanghai. It has qualifications and licenses to test self-driving technology and operations in both countries.

Editor: Peter Thomas