Online search giant Baidu Inc said on Monday that it has set up a new business unit to spearhead its automobile efforts and plans to put self-driving cars on the roads in the next three years.
The Beijing-based company, which successfully completed the test drive of its self-driven car on various roads last week, said it intends to mass-produce the vehicles within five years.
Baidu indicated that the new business unit will focus on research and development of self-driving technology as well as build the industrial chain to support the production of next-generation cars.
Wang Jin, senior vice-president of Baidu and the manager of the new business unit, said that the value of a traditional vehicle largely depends on its mechanics, such as engines. However, in future it could be the smart system that will reflect the actual value of a car in the long tern, he said.
“In the future, vehicles could be self-driven and controlled by smart systems. We have set a target to commercialize our operations in the next three years,” he said, adding that in 10 years, about 80 per cent of the newly produced vehicles would be equipped with self-driving technologies.
Baidu is not the only company betting on the future of self-driving technology and Internet-enabled cars. Tech giants like Google Inc and Samsung Electronics Co have already made their presence felt in the sector with autonomous driving technologies.
In China, Baidu’s Internet rival Alibaba Group Holding Ltd and Leshi Internet Information and Technology Co are also moving into car-related businesses by teaming up with automobile makers.
Yan Honghui, an analyst with Beijing-based Internet consultancy Analysys International, said: “Rather than making a fortune by selling smart cars, companies are betting big on tapping into people’s various in-car demands.”
“Baidu itself is an example. It has invested in developing artificial intelligence and its businesses range from online search to Internet-enabled cars. It has Baidu map providing navigation services and its online to offline services can match people’s search requests to dine out with the nearest restaurants,” she said.
“If there were one terminal that can integrate all of Baidu’s strengths together, it must be cars,” she said, adding many of the tech giants see cars as an ultimate terminal to reach their users, just like what smartphone does to connect people with various services.
According to Baidu, the market for self-driving cars is valued at tens of millions of yuan in China. But the entire car-related business, including driving safety and energy savings in cars, can be worth trillions of yuan.
Li Xueyi, head of the Chinese Association for Artificial Intelligence, also shares similar views. “But to actually make those cars a part of people’s day lives, companies must achieve breakthroughs in cost, performance and reliability,” he said, adding its requires synergy from tech companies, automakers, regulators as well as research institutions.
Baidu joined hands with BMW AG in 2014 to launch self-driving cars. On Monday, it named Yin Tongyue, chairman of Chery Automobile Co Ltd, and Wang Chuanfu, chairman of automaker BYD Co, as counselors for its autonomous driving business unit.