Global automakers are seeking to transform from mere car manufacturers into transportation providers -- offering diverse auto-related services such as car-sharing and ride-hailing services-- amid growing concerns that self-driving technology may bring down car sales in the future.
This year, several auto giants have aligned themselves with tech firms or announced mobility plans, although Korean automakers including Hyundai Motor and Kia Motors have not yet made any big deals in this area.
Early this year, General Motors invested $5 billion in Lyft, an arch rival of the world’s largest ride-hailing provider Uber, while Toyota confirmed a strategic investment and auto leasing deal with Uber last month.
Volkswagen also invested $300 million in Gett, a Tel Aviv-based car-hailing app, even amid the fallout from its emissions-cheating scandal. Ford plans to unveil FordPass, a mobile application software to arrange car sharing, parking places, cab rides and payments, this year.
Market watchers said the automakers’ series of deals came amid the growing presence of tech firms in the auto market, which is slowly changing the public perception of cars from something to possess to mere means of transportation.
“Auto giants, which have long set the rules of the game in the industry with high entry barriers, began to see the collapse of the barriers by tech companies entering the market without manufacturing capacity,” Kim Young-hyeok, a senior researcher at LG Economic Research Institute, told The Korea Herald.
Despite the global automakers’ aggressive moves, local automakers including Hyundai Motor and Kia Motors have been lukewarm toward car-sharing and ride-hailing businesses.
As for Hyundai Motor, the nation’s largest automaker, there were once reported talks with local car-sharing firms and Uber -- the most recent -- but those do not appear to have gone anywhere.
Google's driverless car (Google)
Sources said this is because the company does not feel the heat in the local mobility market as the local sharing economy has not grown big enough to worry the automakers. Korean consumers still view cars as a thing to possess rather than something to share.
“Although the car-sharing market shows a sign of growth here, the company still views the market as a minor segment,” said a source from Hyundai Motor.
Uber jumped into the local market in August 2013, unveiling car-sharing service UberX. But, the firm pulled out of its business last year following strong opposition from the taxi industry and the government regulation.
Hyundai occasionally provides some of its new cars for car-sharing firm Green Car – but these are small deals done with no fanfare.
“The car-sharing business relies more on a nation’s social and cultural sides than technical issues. Korean automakers are expected to catch up fast because they already have the necessary technology for the business,” said Choi Woong-chul, a professor at Kookmin University’s college of automotive engineering.
By Shin Ji-hye (email@example.com)