Carmakers join with Internet industry to design smart cars

Collaboration expected to develop integrated systems to assist drivers

This year, Chinese carmakers SAIC Motor Corp Ltd, BAIC Motor Corp and Chery Automobile Co have united with Internet companies to develop smart cars.

Such moves have heated up speculation on intelligent vehicles, with local media reporting that smart vehicle stocks on Chinese bourses have surged 106.44 percent in the past three months.

Dong Yang, secretary general of the China Association of Automobile Manufacturers, said connecting vehicles with the Internet is a critical trend and will positively influence driving.

Bloomberg Intelligence auto analyst Steve Man said smart cars are designed to interact with the environment and use real-time information about traffic conditions to help drivers make informed decisions.

International Data Corp China's research manager Wang Yue wrote that automakers are seizing this trend to transform their businesses.

He said such vehicles would become two-way information sharing terminals, through which drivers and passengers could obtain information and enjoy services via their connection to the Internet.

At the other end, the access to drivers and passengers could be monetized into sustainable revenue.

Zhang Yu, general manager of Automotive Foresight (Shanghai) Co, said Chinese carmakers and Chinese Internet companies understand each other and, without language barriers, can reach agreement easily.

It is a rare chance for Internet companies to build car models successfully from scratch, and the companies acknowledge that, Zhang said. Their collaboration with the carmakers is not expected to produce new automobiles, but to develop software and hardware to enhance them, he noted.

"By announcing their entrance into auto manufacturing fields, the Internet companies are attracting more attention and promoting their integrated software and hardware systems through cooperation with the carmakers," he said.

Wang forecast that carmakers in the future will need to seek more profit from services and software related to the Internet, as they now face an overcapacity issue and find it difficult to boost their profitability simply by upgrading their manufacturing and managing systems.