Carmakers and tech tie-ups: The data link

The deal announced earlier this week between Google and Ford to install the Android operating system in the US carmaker’s vehicles is the latest in a series of tie-ups between carmakers and technology companies.

In January, China’s search engine Baidu announced that it was partnering with carmaker Geely to make smart electric vehicles. Meanwhile, a newspaper in Korea reported that Hyundai and Apple plan to sign a partnership deal to work together on autonomous electric cars.

The willingness to enter into these type of partnerships shows a significant shift in the mindset of the decision-makers working at the top of some of the world’s largest automotive firms. The tie-ups demonstrate an increasing recognition that carmakers’ competitors no longer just make cars. They deal in data.

This spirit of cooperation could well make sense. Partnerships are a way of sharing the cost of developing electric and self-driving vehicles. They are also a way of tapping into external expertise that could help carmakers explore new ways to make money from selling in-car services.

The drive towards ever-more connected cars might see vehicles become more like “smart phones on wheels”, with consumers encouraged to download applications that enhance the driving experience and increase convenience. In this context, a carmakers’ ability to handle and monetise data and data-related services could become just as important as a car’s road handling capabilities.

Having a partner or “co-driver” who brings skills and knowledge in developing and selling such services might help steer traditional carmakers into a leading market position.


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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