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A “smart-car” race for large Chinese tech companies

Siyang Wang

Grand-sized Chinese technology company, Tencent, has recently launched a series of open smart car software packages pushing ahead with its expansion into smart car development.

“The next big thing for the growth of mobile internet will be smart cars.” Ma Zheren, the vice president of Tencent, said in an interview with National Business Daily.

The three products, Connected Car ROM, Connected Car app and MyCar, were released on Monday and provide connected car services like navigation, infotainment and safety information.

picture from Tencent Tech

This is not Tencent’s first move however, last year Tencent launched “Lubao Hezi”, a hardware product for cars able to offer real-time maintenance and safety information, by plugging into a car’s electronics. It has also teamed up with Foxconn and luxury car dealership China Harmony Auto to develop its own smart cars.

According to an SAIC estimate, smart vehicles in China will represent a market worth RMB 100 billion over the next five years with total cars sold likely to reach 40 million or more. Smart cars will become the next ‘blue ocean’ of potential for the giants of the Chinese tech industry.

Besides Tencent, Alibaba, Baidu, LeTV and other Chinese technology companies are also embroiled in the battle, though each follows a slightly different strategy.

Alibaba and SAIC signed an “Internet Car” agreement last year, aiming to not only integrate Alibaba’s YunOS operating system, big data and cloud computing technologies into SAIC’s cars, but also to produce their own “Internet Car” in the long term.

Baidu is not far behind. In addition to its cooperation with BMW in developing its own autonomous car, Baidu has just released four major smart car software packages this month. Baidu has created an in-car networking and multimedia platform that will provide navigation as well as location-based services based around Baidu Maps.

For both the BAT technology companies of China and their lesser cousins, the high market access threshold in China is one of the main factors preventing them from going at it alone. Jia Xinguang, an auto analyst for China Automotive Industry Consulting and Development, pointed out that funding gaps and a lack of a minimum of three years of auto technology-oriented R&D experience, mean that IT companies must cooperate with traditional automobile companies, SinaTech reported.

Many auto industry insiders are of the opinion that the coming battle of the smart cars in China will take place through several alliances built between different IT companies and their cooperative partners in the auto industry.

Edited by Rohan Malhotra

(Siyang Wang is a guest writer at

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