Manufacturing News

Alibaba rolls out connected car tech with SAIC

Alibaba Chairman Jack Ma is taking the challenge to Apple Inc. and Google by pushing Alibaba Group Holding into the car business, joining the global battle to control the automobile dashboard.

The Chinese e-commerce company's YunOS operating system, which connects phones, tablets and smart watches, is now on its way into car dashboards, touch screens and advanced rear-view mirrors.

Alibaba showcased its OS'Car technology in SAIC's Roewe RX5 SUV model -- with a starting price of 148,800 yuan ($22,000). The system allows drivers to book a parking space, order a coffee and pay for it by using the company's Alipay system.

"We believe in the future that 80 percent of the car's functionality won't be related to transportation," Ma said while introducing the vehicle in Hangzhou, China. "The car will become a kind of robot you communicate with on a daily basis."

Alibaba is staking its claim on a segment of the global car industry that IHS Automotive estimates will grow 19 percent per year to become a $4.2 billion market by 2021. Whereas Google's Android Auto and Apple's CarPlay systems are enabling drivers in much of the rest of the world to extend connectivity from their phone to their car screens, they're running into stiff competition in China.

Track record
Alibaba and SAIC have been building their positions in the connected car space for years. Ma, a 51-year-old billionaire, acquired China's most popular mobile mapping service in 2014, when Alibaba bought AutoNavi Holdings in a deal that valued the company at $1.5 billion.

SAIC, China's largest automaker, started a 1 billion yuan fund with Alibaba in 2015 to develop a connected car. The state-owned company has joint ventures with Volkswagen AG and General Motors, the top-selling foreign automakers in China.

"Alibaba has wide-ranging Internet-based services and YunOS could be a starting point for their cooperation, especially due to the fact that lots of Google services are blocked in China," said Michael Liu, an analyst at IHS Automotive in Shanghai. "Foreign brands are not likely to use the Alibaba system at least in the next several years."

Sales of the Roewe RX5 equipped with Alibaba's infotainment system began Wednesday.

Alliance talks
Alibaba is in talks with several automakers to form alliances to use YunOS, according to Wang Jian, chairman of Alibaba's technology steering committee. The company also is working to certify the system for vehicles in the U.S., he said.

"This is a car run on the Internet; it's not a car that has some Internet capabilities," he said in an interview. "iPhone made the first generation of phone that was part of the Internet, just like the PC. This car is the first generation of cars that are becoming a new member of the Internet."

Researcher IHS Automotive has forecast Apple's CarPlay and Google's Android Auto will become leading platforms for car connectivity, with the exception of China. Regulatory barriers including Internet censorship regulations likely will fend off competition for Alibaba and Baidu Inc.'s CarLife.

Apple's CarPlay will be used by more than 40 auto brands to integrate the iPhone into the car's telematics system for navigation, music playback and phone calls. Google's Android Auto is available in models from at least 17 car brands, including Chevrolet, Honda, Hyundai and Mercedes-Benz, and is adding the traffic program Waze to its navigation offerings.

Ma, dressed in a gray tee-shirt and chinos, hopped into a white SAIC Roewe RX5 with his counterpart at SAIC Motor.

Earlier, he thanked SAIC Chairman Chen Hong for offering the SUV at a cheap price. "The pricing is shockingly low," he said to the audience. "SAIC faces a lot of pressure to roll out the car at such prices."

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