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China Auto Suppliers Getting Ready to Invest in Self-driving Cars

| Oct 27, 2015 07:12 AM EDT

Chinese Internet giant Baidu is set to launch its self-driving car late this year.

Several high-end car brands are planning to invest in the development of autonomous vehicles (AVs), or self-driving cars, and to start selling them next year, according to the Economic Observer.

The report said that Xu Heyi, chair of Beijing Automotive Group (BAIC Group), declared recently that the company's first driverless car will be launched at the Beijing Auto Show next year.

Aside from the trend toward electric vehicles, autonomous cars are also expected to play a major role in the evolution of the automobile industry, adding that a major concern is how long it will take for the public to get on board.

The evolution of the market, however, may take 20 years to mature, which is not related to the development of autonomous cars but to transportation infrastructure and the operations of vehicle assembly plants, the Economic Observer said, citing a report issued by the Boston Consulting Group (BCG) on the industry.

The paper added that before self-driving cars can be driven on the roads, urgent questions about technical, social and regulatory issues asked by OEMs, suppliers, infrastructure operators, regulators and the public must first be addressed.

Thomas Dauner, head of BCG's global automotive practice, said that automobile assembly plants should first define their position, either as a pioneer or a follower, in the automobile evolution.

He added that high-tech companies are expected to be the biggest beneficiary in the market, while manufacturers could face many challenges.

The autonomous features are expected to make 12-13 percent global penetration by 2025, which will be worth around $42 billion in the market. By 2035, the market is expected to expand to $77 billion, according to the report.

The report added that widespread adoption of AVs will bring a radical change in the auto industry since the introduction of the assembly line and will bring great benefits to society.

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