Apple, Sony, and Baidu Reveal Ambitions as 'Complete Car' Makers... Disruptive Changes Coming to the Auto Industry

[Asia Economy Reporter Kim Hyewon] As giant IT companies such as Apple, Sony, and Baidu aim to enter the complete vehicle market, it is predicted that groundbreaking changes will occur in the automotive industry, which is undergoing a turning point.

According to the Korea Automotive Research Institute on the 18th, recently, big tech companies representing the United States, Japan, and China have been showing moves suggesting entry into the complete vehicle market one after another. The main players are Apple, the world's largest market capitalization company, Japanese electronics company Sony, and Baidu, known as the "Chinese Google."

Apple, known to have been researching autonomous driving technology for several years, is recently planning to launch an electric vehicle in the form of a complete car and is exploring the possibility of cooperation with global automakers including Hyundai Motor Group.

Sony revealed driving footage of its electric vehicle prototype "Vision-S" at CES 2021, receiving evaluations that it is virtually on the verge of entering the complete vehicle market.

Baidu, which has been intensively developing autonomous vehicle technology through the "Apollo Project" since 2017, recently announced that it will produce autonomous electric vehicles by establishing "Baidu Automobile" in a joint venture with China's Geely Automobile.

The institute expects that since big tech companies already possess capital-raising capabilities, brand awareness, and development and production capacities, they can enter the complete vehicle market in a short time and cause disruptive changes to the existing industrial structure.

It is forecasted that the future automotive industry will be divided into hardware platforms, software platforms, and production/integration sectors. Existing automakers and parts suppliers are likely to develop powertrains, chassis, and bodies based on their expertise in parts supply chains and safety/environmental regulations, providing the vehicle's hardware platform. IT and electronics companies such as big tech are expected to provide software platforms to implement autonomous driving functions and application services.

The production and integration functions, which combine hardware and software platforms to manufacture complete vehicles, are expected to be handled by existing automakers with mass production capabilities or original equipment manufacturers (OEMs).

The institute anticipates that big tech, automakers, and OEM companies will continue to cooperate and compete to become platform providers. The institute stated, "Big tech companies will cooperate with the complete vehicle industry to develop and launch autonomous vehicles based on their software capabilities, but once their control over the software platform grows to a certain extent, they will try to strengthen control over hardware platform providers."

The complete vehicle industry is expected to cooperate with electronics and IT companies while striving to internalize software capabilities, and OEM companies will strengthen hardware development and design capabilities. Recently, phenomena such as Taiwan's Foxconn, famous as the contract manufacturer of Apple iPhones, entering electric vehicle custom manufacturing have also appeared, showing OEM companies from other fields entering the automotive sector.

The institute pointed out that industrial policy direction must shift according to the changing automotive ecosystem rather than existing companies. It emphasized the need to secure competitive advantages in the domestic industrial ecosystem by closely analyzing strengths and weaknesses in the three sectors of hardware platforms, software platforms, and production/integration.

The institute added, "It is necessary to redefine the scope of the automotive industry in various laws, statistics, and indicators to adjust policy focus and discover cooperation models among companies from different fields."

This content was produced with the assistance of AI translation services.