Ten years ago, in July 2005, Volkswagen ran a Touareg SUV round an off-road track in Germany without anyone at the wheel.

Using a plethora of sensors, the four-wheel-drive car, nicknamed Stanley, negotiated the course almost flawlessly.

In October that year, Stanley - which was built in collaboration with Stanford University - won a 208km desert race held in the United States for driverless vehicles.

It completed the course in 6hr 53min 8sec - nearly 12 minutes less than the next car, an autonomous Humvee.

A total of 23 vehicles took part in the challenge.

The event showed how far driverless systems had come. In a similar race the year before, not a single vehicle finished (the longest distance travelled was just 11km).

Since then, research into autonomous technology has been rolling along, picking up speed about five years ago.

That was when Google announced that it was making an autonomous vehicle.

Soon after, scientists and consultants began hailing driverless cars as the likely panacea for urban transportation woes.

A shared autonomous vehicle could string trips together and be much more efficient than a privately owned driver-operated one.

The Massachusetts Institute of Technology's Smart Future Mobility team theorised that the total mobility needs of a city such as Singapore could be met with just 30 per cent of its existing vehicles.

Boston Consulting Group predicted that 20 years from now, people living in big cities will not own cars.

Good for highways, tricky in the city

Instead, they will rely on a pool of shared autonomous vehicles.

Projections such as these got many governments interested. And practically every developed country started allowing the trial of driverless vehicles on public roads, and several manufacturers have since jumped into the fray.

Last year, Sweden began extensive on-the-road trials of driverless trailers. A convoy of these were plying the highway, travelling just 1m to 2m apart.

Two months ago, Germany allowed Daimler to run its driverless Actros truck on a highway near Stuttgart - just months after a similar trial started in the US.

Britain plans to conduct a similar trial soon.

In April, an autonomous Audi drove from San Francisco to New York, clocking more than 5,400km in the longest of such drives.

BMW will start autonomous driving trials in China before 2017.

In Japan, carmakers are racing to go beyond trials, with companies such as Toyota and Nissan aiming to come up with usable solutions before the Tokyo Olympics in 2020.

One such solution calls for a fleet of driverless taxis, which Fujisawa (a coastal town near Tokyo) will start testing next March.

Switzerland is doing likewise. Next year, it will launch a fleet of driverless nine-seater minibuses in the city of Sion in a two-year trial.

Volvo Cars will launch an extended fleet of autonomous cars, driving real customers on the roads of Gothenburg, Sweden, by 2017. It showed what the cockpit of the car might look like in the Concept 26.

Singapore has jumped on the bandwagon too. Last year, it formed Carts - the Committee on Autonomous Road Transport for Singapore, a multi-disciplinary group that oversees efforts to make self-driving vehicles a reality.

It is rolling out autonomous vehicles in Gardens by the Bay and Sentosa, and is developing autonomous trucks for the port.

A*Star's Institute for Infocomm Research and the Singapore-MIT Alliance for Research and Technology have started driverless trials in one-north, while the Nanyang Technological University has been doing the same on its campus.

While autonomous vehicles have come a long way since Volkswagen won that desert race 10 years ago, experts believe it will be several more years before they can take over from human drivers, especially on city roads.

Mr Lars Reger, chief technology officer of Dutch chipmaker NXP, which supplies electronic components to several carmakers, says cars which can drive by themselves in an environment with few variables - such as highways - will be ready "in the next three years".

But in the complex road network of a city, they may find it tough.

He says: "Last year, when Mercedes was testing its autonomous car, it got stuck at an intersection because there was an old woman who wanted to cross.

"She decided to wait for the car to pass, but the car detected that there was a person who wanted to cross and waited. In the end, the driver had to intervene, and drove it manually."

In another scenario, an autonomous car might go round a corner and come to a stop behind a delivery truck that had stopped for unloading, "thinking" there is a traffic jam. Recently, a California policeman pulled over one of Google's pod-like driverless cars for going too slowly.

But, even if autonomous technology is ready only for highways, Mr Reger says it will already be a boon. Long-distance commutes will become safer because there will not be driver fatigue, one of the main causes of accidents.

Vehicles will be able to follow closely behind each other, resulting in more efficient use of infrastructure. Flow will also be smoother because robotic cars will "know" what the others are doing as they are in constant communication.

"When one car brakes, the fifth car behind already knows it," Mr Reger says, as the vehicles are constantly "talking" to one another.

While much of the hype over self-driving vehicles has been positive (a city will be more liveable is a common refrain), some negative views have emerged.

Some experts reckon people might be more open to longer commutes in an autonomous car, which in turn would lead to more urban sprawl - where a suburban area expands outwards. This may lead to a "hollowing out" of the city centre, with lower demand for downtown real estate. In turn, people will travel more, not less.

And with urban sprawl, governments might end up having to build more roads.

Nevertheless, British market research group Juniper Research said this month it expects 20 million fully automated cars to be on the road by 2025, representing 1 per cent of the world's total car population.