The fastest I have ever driven a car is 180 km/hr on the German Autobahn. The slowest I have ever driven a car was in Shanghai in 2016 when it took me about 2 hours to travel 700 meters when a major overhead car lane was damaged. That’s the equivalent speed of a crawling baby! So although it seems the “killer app” of autonomous cars is that I can drink my latte while scrolling through some cat videos on Youku (Youtube equivalent in China), that’s not what I am waiting for. One of the real disruptions of self driving cars is their ability to remove traffic delays from my life (and having a latte while watching Youku is a nice bonus).
Sohu.com is a leading internet brand in China, providing online games and news to over 400 million people,. In a recent conversation I had with Charles Zhang, the thoughtful and humble CEO/Founder of Sohu.com, he commented that internet companies will be eventually building cars. Internet companies building cars? Although this does not seem obvious, the idea of Charles Zhang is to take the efficiency and power of information provided by the internet to understand what the Chinese consumer really wants in an automobile. This allows Sohu.com to build cars that are tailored specifically to the Chinese consumer. Baidu’s CEO Robin Li says that “China has a lot more population and hence has more chance to uncover needs before US companies do”. By aggregating search queries (in Baidu’s case) and looking at sales of used cars through online classifieds (in Sohu’s case), these companies are getting an unprecedented view into automobile consumer needs and wants.
Most traditional auto companies are also now pivoting their strategy and are now envisioning a future where selling a car is not about the car at all…its about how to give the consumer a better experience while traveling IN the car. Nissan’s CEO Carlos Ghosn commented recently in January 2014 that “we are moving from the car being a slave to becoming a partner”. Toyota designers are pondering the question of how to make the time in the car the most valuable part of your day. General Motor’s recently created a position of “Senior VP Customer Experience” with their philosophy being the product is not the car anymore, the car is the container of the experience. Ford is focusing on Infotainment for the car and their tagline is to deliver cars that are “safe, green and smart”. The pattern is clear and the auto industry is heading towards a future of the “conscious car”.
So will internet tech companies transform the automobile industry? Well if Google and Baidu is any indication the shift has already started. Google heavily invests in mapping technology through Google Maps, it’s a leader in autonomous vehicle technologies, has a mobile phone OS through Android and recently purchased a company called Waze (which does crowdsourced traffic updates). All this technology allows us to be more efficient with the modern day automobile. No longer do you need to buy a car… maybe you can use it less, share it or get one only when needed because you are a lot more efficient through the use of these technologies. This is the “dematerializing” effect that technology will have on the auto industry…a lot less cars and we are a lot more efficient with them. So maybe Sohu or Baidu will not build the cars, but they will certainly make the use of them a lot more efficient and customized.