Is China going to invest in connected cars?

Is China going to invest in connected cars? Source: Shutterstock.

Understanding China’s vision and mission for connected cars

CONNECTED cars are exciting to manufacturers, customers, and regulators for several reasons. They create new opportunities to entertain the rider, keep pedestrians and passengers safe, and reduce traffic, among other things.

China’s Industry and Information Technology Minister Miao Wei sees these opportunities clearly and hence, believes that the market will be worth US$14 billion by 2020.

Miao’s projection, of course, is in line with the forecast issued by the National Development and Reform Commission earlier this year suggesting that by 2020, one in every two new cars sold will be equipped with smart and at least partial autonomous functions.

It seems as though the country is on a mission to gain leadership in developing next-generation cars with autonomous driving and internet connectivity.

Obviously, as the opportunities in the automotive industry become more apparent, more and more manufacturers and tech companies are investing in research and development efforts to help create smarter, better products.

Baidu, for example, is competing with traditional automakers to create road-ready, autonomous vehicles. In fact, according to local media, the company has developed the first self-driving bus and has tested it over 10,000 kilometers with no accidents.

“Intelligent connected cars are set to become a vital means in reducing traffic casualty, road congestion, and energy consumption,” explained Miao. It’s why the government has been stimulating an interest in this area among local companies and inviting willing foreign partners to make an investment.

Tencent, on the other hand, sees the potential in user infotainment systems that will be a major part of the passenger experience in connected cars.

The company has been looking for ways to build a voice-operated version of its WeChat messaging app into cars and hope to also enable real-time navigation and the sharing of geographic locations — although concerns about safety have kept the company Tencent from making the software available to users at the moment.

Tencent, which earns a major chunk of its revenues from gaming and social networking is expected to nurture a strong relationship with carmakers such as BMW, FAW, and Geely in order to better integrate into the connected car of the future.