The acceleration of technology over the past year has caused a massive ripple effect, permanently shifting consumer lifestyles, expectations, and behaviors to a future-ready state. In response UM APAC created the Asia-Pacific Innovation Annual – taking a deep dive into the cutting-edge advancements in entertainment, commerce, digital health, and connectivity, that are catapulting the region and proving new opportunities for brands.
An increasing consumer appetite for high-tech vehicles combined with decisive government policies that encourage the development of a solid local Internet of Vehicle (IoV) industry has put China at the forefront of connected vehicle technologies.
According to an estimate by market research firm Strategy&, connected cars already account for 16% of all Chinese in-market vehicles, and they will skyrocket to 56% of the total market share by 2030. 5G is playing a big role in the fast growth of connected cars in China. According to Counterpoint Research, 5G connected car sales volume in China will jump to 7.1 million units in 2025, accounting for 40% of the country’s total connected car sales.
Chinese OEMs are offering high-end in-car infotainment systems with a mobile-like interface in partnership with local internet giants such as Baidu, Tencent, and Alibaba. They have also developed frameworks to enable fast iteration of software services, with deployment cycles reduced to 12 months versus the three years typically taken by their Western counterparts.
The connected-car experience offered by OEMs in China is boosted by an abundance of personal data, made possible because Chinese consumers are willing to share data with digital service providers. This allows automakers to develop sophisticated and personalized vehicle experiences.
Since the connected experience is the key selling point, carmakers are increasingly offering connected services subscriptions for longer free trial periods than in Western countries, sometimes even for the vehicle’s lifetime.
The competitive landscape for connected cars in China is intensifying. Chinese OEMs and tech giants are competing to develop auto operating systems (AOS). As a result, a multi- functional applications ecosystem is emerging. For the OEMs, more functions, such as streaming content and ecommerce features, are being integrated into the built-in infotainment system. Functions to further ensure driving safety and efficiency, such as emergency alerts and route selection and modification, will be launched synchronously with the process of assisted driving. Hardware and software modules will be further integrated as well. However, some OEMs have also started developing their own AOS to ensure data ownership and business independence.
Major tech companies, such as Baidu, Alibaba, Tencent, and Huawei, are developing AOS by leveraging their respective mobile app ecosystems. Baidu, in particular, has emerged as a leader in artificial intelligence (AI) and autonomous driving technology.
In August, Baidu unveiled Kunlun 2, its second-generation AI chip. The semiconductor is designed to help devices process huge amounts of data and boost computing power. Baidu says the chip, which has entered mass production. can be used in areas such as autonomous driving.
Baidu also took the wraps off a “robocar,” an autonomous vehicle with doors that open like wings and a big screen inside for entertainment. In June, Baidu announced a partnership with state-owned automaker BAIC Group to build 1,000 driverless cars over the next three years and eventually commercialize a robotaxi service across China.
Baidu has also been running robotaxi services in in limited areas of some cities, including Guangzhou and Beijing. Users hail an autonomous taxi via the company’s Apollo Go app. In August, Baidu rebranded that app to Luobo Kuaipao as it looks to roll out robotaxis on a mass scale.
Voice assistants offer another way for tech companies to enter the connected car space. For example, Alibaba signed a deal with global auto brands including Daimler, Audi, and Volvo to integrate Tmall Genie, Alibaba’s smart voice assistant, into their cars sold in China. The solution, called AI + Car, enables equipped cars to access Tmall Genie natively through the infotainment systems, and allows users to link home smart speakers with their cars to monitor conditions or carry out simple tasks. Vehicle owners will be able to control car doors, windows, and air conditioning from home via voice commands.
On the consumer front, China is also leading the way in drivers’ receptiveness and positivity in the development of autonomous vehicles. According to a report from the World Economic Forum, while excitement over self-driving autonomous vehicles has dimmed in both Europe and the US due to safety fears, 71% of Chinese drivers remain positive about using such vehicles.”
Looking ahead, the value of voice-activated car doors and windows, and of linking users’ cars to their homes in order to trigger things like thermostats and lights, might seem trivial at a glance. However, the Internet of Things is all about removing friction from people’s domestic and working lives, and cars should be part of that consideration, too. As cars evolve through each level of automation, owners will demand greater connectivity and the ability to use their new-found freedom to communicate with their family, friends, and perhaps businesses and brands as well.
Cars are an environment, alongside the home and the office, where individuals spend a significant amount of time, and where connectivity can become an important part of that experience. There will continue to be a focus on “human-centric” innovations that provide drivers with a digital experience, both inside and outside the vehicle, in order to meet their changing needs.
