On May 9th, Toyota, Hyundai, Mercedes-Benz, and many other global automakers are actively seeking partnerships with Chinese tech giants to revitalize their presence in the world's largest and rapidly evolving automotive market, aiming to regain market share.
Recently, Hyundai and Kia from South Korea announced a collaboration plan with Baidu to jointly develop mapping and artificial intelligence technologies for autonomous driving and car software systems tailored for the Chinese market. Meanwhile, Nissan also revealed a partnership with Baidu in the field of artificial intelligence, while Toyota chose Tencent for AI models, cloud services, and big data support.
Facing declining sales in the crucial Chinese market, Mercedes-Benz plans to introduce high-end entertainment system models equipped with Tencent games, intending to transform cars into "personal gaming rooms" for drivers.
Most of these collaborations were announced at the just-concluded Beijing Auto Show, signaling strategic adjustments by foreign automakers to cope with the increasingly competitive environment in the Chinese market, including ongoing price wars and the rapid development of autonomous driving and software systems. These innovations have propelled Chinese brands to achieve world-leading levels of technology, with domestic sales of Chinese automakers surpassing foreign competitors for the first time last year. The rise of electric vehicles has gradually eroded the once-dominant market position of global internal combustion engine car manufacturers.
Qu Ke, an analyst at Hong Kong-based Jefferies, stated, "Foreign automakers realize their precarious position in the Chinese market and do not want to lose it, hence the need for adjustments. Chinese electric vehicle manufacturers can offer rich vehicle features at relatively lower prices, greatly meeting consumer demands, posing a significant challenge to foreign brands."
It is worth noting that autonomous driving technology has become a key investment area for many Chinese companies, often partnering with local tech firms proficient in big data and AI computing. China's strict data regulations have hindered foreign brands like Tesla from promoting their advanced autonomous driving systems.
Currently, numerous local brands including Nio, Li Auto, Xpeng, and Ideal offer some form of autonomous driving functionality.
Huawei recently launched software systems supporting features like assisted driving and parking, with local car brands such as Dongfeng, Changan, Nio, and Geely planning to incorporate this system in their vehicles this year.
Yao Shuqiao, a senior analyst at Haitong International, commented, "For foreign companies striving to break through in autonomous driving, partnering with Chinese tech giants is undoubtedly a wise choice."
Analyst Ying Zhongxi from Nomura Securities stated, "This year will be a crucial period for the widespread application of 'smart driving' features in China. Faced with this trend, foreign automakers must accelerate their pace to keep up with market developments."
Another competitive area lies in the evolving interactive control systems. These systems can analyze driver health data and stress levels to provide driving recommendations, allowing drivers and passengers to control vehicle systems through voice and gesture commands. To create the best systems of this kind, access to local data such as user driving preferences and China's traffic and road conditions is essential.
Jefferies analyst Qu Ke emphasized, "Only Chinese tech giants have exclusive access to Chinese user data."
In addition to high-end technology, some more practical in-car features like karaoke, car refrigerators, and massage seats are enhancing the innovative image of local car brands and providing valuable experience for global automakers in the market share competition.
Zeng Zhi Ling, Asia Forecasting Manager at GlobalData Automotive consultancy, highlighted that driving in China has evolved from mere transportation to an experience, where cars are no longer just simple means of getting around. He added that as drivers are freed from driving tasks, they naturally expect richer entertainment experiences.
Finally, Yao Shuqiao stated, "For foreign automakers, it's now either join the competition or forever stay at the starting line."
