Updated 2015-09-25
SCMP丨Mark Andrews

The Mini Augmented Vision Concept was unveiled at this year’s Shanghai Auto Show

One of the most important international concepts unveiled at the Shanghai Auto Show earlier this year wasn’t a car, but a pair of glasses. Mini’s Augmented Vision Concept is a Google Glass-type system which integrates the driver’s in-car environment with the outside world, providing assistance with blind spots or guiding a driver from parking to their destination.

According to analyst IHS, 62.5 per cent of passenger vehicles sold in China by 2020 will feature some sort of similar telematics system. With China being the world’s largest car market, this presents a huge opportunity that a number of companies are trying to seize.

For most people, the term “telematics” is unfamiliar, but the basic concepts have been around for a while. The first example was General Motors’ OnStar system, launched in the US in 1995. Over the years more functions have been added, but at its heart is a GPS positioning system and a voice-call function to get directions or summon assistance in an emergency.

Telematics can come in three forms: embedded, such as OnStar; consumer electronics, which are after-market solutions; or a hybrid which uses the car’s infotainment system linked to a mobile phone for more services.

David Zhang, an independent automotive industry analyst consultant, estimates there are around 2,000 companies involved in the Chinese telematics ecosystem and that there are around 100 original equipment manufacturers (OEM) and after-market companies launching their own systems.

“The 2015 Shanghai Auto Show had an incredibly large number of connected car concepts and production models on display, particularly by Chinese automakers,” says Celina Li, automotive technology senior analyst for IHS. “Part of the impetus has come from the Chinese government – in March, Premier Li Keqiang announced the Internet Plus Initiative. This essentially aims to integrate mobile internet, cloud computing, big data and the internet of things with modern manufacturing such as automotive. Internet Plus Automotive equals connected cars.”

In his book China’s Disruptors, Edward Tse talks about the ability of Chinese companies to “triple jump” into areas where they have no real competence but see an opportunity, in contrast to Western companies that concentrate on their core competencies. For example, car producer Qoros recognised that people tend to lose their link to the connected world when they get into a car, and addressed this by developing the Qoros Cloud.

“China could be the world’s biggest driving force behind the adoption of connected cars, since China has central planning and government mandate,” Li says.

For much of the world, the connected car involves Apple CarPlay, Android Auto or MirrorLink, which provide an interface to connect the car’s infotainment system with a driver’s smartphone. But due to Google’s problems with the Chinese government, Android Auto is a non-starter in the market.

Chinese internet giant Baidu last year announced its own product for the market, CarLife. Zhang believes it is similar to the foreign competitors, as “with all of them the main function is to link a smartphone to the car”.

Baidu claims it has an advantage in the key areas of mapping, voice recognition and service quality in China. CarPlay and Android Auto are ultimately linked to their own operating systems, something that does not inhibit CarLife.

“CarLife is compatible with both iOS and Android, covering over 95 per cent of smartphones, while Android Auto, CarPlay and MirrorLink all have restrictions in compatibility. It incorporates different car networking services that are tailored to Chinese car owners and have outplayed other players,” says Whitney Yan, Baidu’s international communications manager.

September 5 saw the launch of the new Hyundai Tucson, which is the first car on the market to integrate CarLife. Baidu is cooperating with nine global OEMs, including Audi and Mercedes, meaning that further launches are imminent. Hyundai also showcased a connected in-car entertainment simulator at the Frankfurt Motor Show.

LeTV, China’s equivalent of Netflix, is going one step further. It has already unveiled a telematics system using its own Android-based LeUI operating system, which will be integrated into future models of BAIC cars. Now it is looking to create its own electric, smart and connected car.

However, a number of Chinese producers are choosing to go with international competitors for telematics solutions. SAIC Motor has the third-most-popular embedded telematics system in China after OnStar and Toyota’s G-Book. InkaNet, provided by SAIC in their MG and Roewe brand cars, is now using MirrorLink to connect the driver’s smartphone with the infotainment system. Similarly, Geely has just announced a partnership with Apple’s CarPlay to bring the system to all future models, starting with a new SUV set to go on sale early next year.

Both Geely and SAIC are car exporters, so it doesn’t make sense for them to integrate different systems for different markets around the world. “Baidu CarLife is a new product launched at the end of last year, so it’s impossible for a global automaker to integrate CarLife into a global car,” Zhang says.

But Baidu is agreeable about the situation. “At the current stage, our key focus is the Chinese market and serving Chinese users,” Yan says.

The big challenge for Chinese developers is to avoid recreating the mainland’s internet landscape, where globally popular websites have been banned and replaced by a Chinese clone that is not used anywhere else. Zhang points to the market for car navigation systems, which was affected by foreign companies not being allowed to map in the mainland.

The partly protected telematics market in China – with one of the major players, Android, being excluded – is undoubtedly a good environment in which local companies can grow. However, what Chinese companies are producing differs little from foreign competitors, so the question remains as to whether they can genuinely innovate and produce a system that a global OEM will want to put into a car.