With so many new players rushing into the market, relations have grown more complicated than in the conventional auto industry. When electric smart cars first emerged, there was more cooperation than competition. In the US, some startups developing self-driving systems do not make their own cars. They instead use one or two car models to test various new designs, turning the cars into concept vehicles to test the market. Shen thinks his company should do the same, providing hardware equipment for driverless autos, such as cameras, ultrasonic wave and millimeter-wave radar, to software developers who would focus on the algorithms and big data. This would make Singulato a platform where any operating system for driverless autos could be tested.
These major new automakers are now considering building an alliance to share resources and do collaborative research. Shen thinks that it is because consumers are yet to be convinced that electric smart cars are worth buying. “If an electric smart car company fails, the market sentiment toward electric smart cars will be hit hard,” he said.
But relations between this group, referred to as the “new automakers,” and conventional automakers are delicate. In the race to develop electric smart cars the former, with their advantages in artificial intelligence, seem to be edging ahead.
But the latter’s supply chain dominance is expected to hold for the foreseeable future.
Without manufacturing experience or an automaking license, tech-savvy startups of the “new automakers” are seeking support from existing giants. “Internet-savvy teams are good at developing cool designs, algorithms and applications, but the real competition in the future will be over quality, safety and cost efficiency,” said Cheng Bo, director of the Suzhou Automobile Research Institute of Tsinghua University.
Cheng told NewsChina this was why the new players needed to improve their manufacturing ability by collaborating with conventional producers. For example, Anhui Jianghuai Automobile Group (JAC), an automaker listed on the Shanghai Stock Exchange, announced in May 2016 that it would produce electric cars for NIO with investment from Chinese tech giants, as well as Chinese and international venture capital. Meanwhile, these new players, including NIO, Singulato and VM Motors, are building their own manufacturing bases.
Huang Shaotang, chief technology officer of the research arm of Guangzhou
Automobile Group (GAC), told NewsChina that while public opinion once favored the new players and many thought conventional automakers would become mere assembly lines for them, this was no longer the case.
“I was once almost convinced by this forecast. However, what happened in the past year has proved that the pendulum is moving back to automaking companies,” he said.
Some technology companies have sought to turn ordinary cars into smart cars by installing their own software and systems. Huang does not believe this will work, and claims automakers will better their performance when it comes to automatic safety and control systems.
However, conventional automakers are certainly feeling the heat. GAC is preparing by building their own big data system. It has joined with internet and AI companies, including navigation software company AMap, and iFlytek, an intelligent speech and language technology company from Anhui Province. Meanwhile GAC, JAC and King Long United Automotive Industry, a bus and van maker from Fujian Province, are working with internet giants to develop operating systems.
It is too early to say who will lead the market in the future. “Conventional automakers may become just manufacturers, or they may acquire internet-oriented teams. Either is possible,” said Chen Bo.