SHANGHAI • Global carmakers are positioning for a brave new world of on-demand transport that will require a car of the future - hyper-connected, autonomous and shared - and China may become the concept's laboratory.
With ride-hailing services booming and car-sharing not far behind, the need for vehicles tailored to these and other evolving mobility solutions is one of the hottest topics among global automakers gathered for this week's Shanghai Auto Show.
Manufacturers are competing not to only to sell conventional and electric vehicles in the world's biggest auto market, but also to develop new technologies and even specific interiors designed for the on-demand world.
"We cannot just develop electric cars. They will have to be smart, interconnected and of course shared," Mr Zhao Guoqing, vice-president of Chinese auto giant Great Wall Motors, said on the auto show's sidelines.
Discussion of China and ride-hailing inevitably involves Didi Chuxing, the country's omnipresent answer to Uber.
The eagerness of Chinese travellers to hail rides with a smartphone click has unleashed a colossal market: On-demand transport reached US$28 billion (S$38 billion) in turnover in China last year, or about half of global volume, and is expected to double by 2022, according to data firm Statista.
Didi accounts for about 90 per cent of the Chinese market.
The on-demand potential is bringing automakers and service providers together.
Last year, Didi unveiled an alliance of Chinese and foreign manufacturers including Renault, Toyota and Volkswagen, dedicated to exploring ways forward.
And in February, Chinese technology giants Alibaba and Tencent joined hands with several manufacturers to develop a future platform for on-demand transport.
"We can no longer be a conventional manufacturer. We must offer mobility solutions, connectivity," said Dr Stephan Wollenstein, director of Volkswagen China.
Although a relative newcomer to China's automotive market, French brand Renault is plunging ahead: Its local joint venture with Chinese manufacturer Brilliance Auto delivered 600 personal minivans to Didi in February.
Said Mr Michael Dong, vice-president of Renault-Brilliance-Jinbei: "Didi wants to develop such vehicles with many carmakers, which are more adapted to (Didi's) business, redesigned around the passenger."
Mr Lawrence Petizon, an analyst with AlixPartners, said that for one thing, most passenger cars today are designed to squeeze in a family, and thus feature limited space in the back because that is where the children normally sit.
But for ride-hailing or car-sharing, more space is needed in the back to accommodate adult passengers. "The family car is not the right answer," he said.
Didi drivers typically supply their own vehicles, but the Chinese authorities are encouraging service firms to build their own fleets, partly to spur the industry and push forward the futuristic transport concept.
Some manufacturers are even dipping their toes into ride-hailing, with Germany's BMW offering a high-end service in the south-western Chinese city of Chengdu, and Volkswagen and Mercedes-Benz doing so in Shanghai.
One thing that seems certain to eventually change is how cars are bought and sold. "Car manufacturers will no longer provide customers with cars via a one-time sale, but rather with a brand that connects them to the users on a daily basis through the mobility services they offer," said a recent report by Eurogroup Consulting.
Valeo, the French manufacturer of ultrasonic sensors, cameras, and navigational technology, said it received orders totalling €1 billion (S$1.5 billion) last year related to the development of "robot-taxis".
Valeo is also working with Meituan, China's leader in meal deliveries, to develop a robotic vehicle.