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Alibaba, SAIC to Launch China's First Internet Car in 2016

| Mar 13, 2015 04:30 AM EDT

China's e-commerce giant Alibaba and state-owned car manufacturer SAIC signed an agreement last year to develop an Internet-enabled car.

E-commerce giant Alibaba Group Holding Limited and state-owned SAIC Motor Corp. are set to launch the first Internet car next year, the Global Times reported on March 12, Thursday.

According to Alibaba's press statement, the car will feature Alibaba's Yun operating system, which will provide drivers with real-time traffic information, route options and music through the company's Internet services, cloud computing and big data technology.

The announcement was the result of the agreement signed by Alibaba and SAIC on July 23, 2014.

The two companies also announced that they will set up an open fund of 1 billion yuan ($160 million) for companies who will be interested to incorporate their own innovations for the development of the country's Internet car industry.

Zhang Yi, CEO of Guangzhou-based iiMedia Research, said that the creation of an open fund will entice more companies to participate and fast-tract the development of China's Internet car industry.

He added that the Internet car is one way to draw consumers' attention away from foreign auto brands, which are often preferred by Chinese consumers due to brand value and advanced technology, and help increase sales of local manufacturers like SAIC.

Data released by China Association of Automobile Manufacturers on March 10 revealed that 1.47 million domestic brand vehicles were sold during the two months through February, while the overall sales reached 3.43 million.

Alibaba's competitors in the country, Baidu ,Inc. and Tencent Holdings, have also established joint ventures. Baidu launched its CarNet, featuring location-based services and voice-driven navigation with the advantage of Baidu's mapping technology in April last year. Tencent has a similar product called Lubao Box, released in May 2014, which has real-time safety and maintenance information as well as road assistance.

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