By Li Panpan

(JW Insights) Oct 11 -- Self-driving truck startup Plus has split its China and U.S. operations and struck a deal in which a key shareholder, China's Full Truck Alliance (FTA), will focus on the China unit, reported Reuters on October 11.

Three sources familiar with the matter had said that FTA, known as China's "Uber for trucks," and Plus were looking to insulate themselves from rising U.S.-China tensions and tightening regulatory oversight from Beijing.

Plus, which had headquarters in Suzhou, China, and California, separated its operations into two independent companies.

The Chinese unit, Zhijia Technology, will focus on China and develop a self-driving truck fleet for the Chinese market with FTA, while the U.S. entity - which will retain the name Plus - will expand in the rest of the world, the company said.

FTA increased its stake in Zhijia Technology via a stock swap arrangement that reduced its ownership in Plus, the company said.

Two of the three sources said that FTA, which held more than 30% of Plus before the separation, had become the controlling shareholder of Zhijia Technology and that before the split, the bulk of Plus' business came from China. Plus declined to comment on the size of FTA's shareholding in Zhijia Technology, reported Reuters.

Formed in 2017 in the merger of digital freight platforms Yunmanman and Huochebang, FTA runs a mobile app that connects truck drivers with people who need to ship items within China. The stake in Zhijia Technology will help the company develop autonomous trucking fleets - a potentially lucrative market amid a truck driver shortage in China.

While China's trucking market is enormous, worth some RMB4 trillion ($550 billion) annually, the industry is highly fragmented, with more than 7 million heavy trucks on the road in 2021, and profit margins tend to be thin, according to the Reuters report.