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.
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