Hyundai a dark horse in driverless car race

Hyundai is hoping to catch up with companies such as Alphabet’s Waymo, which has already produced self-driving vehicles.
Hyundai is hoping to catch up with companies such as Alphabet’s Waymo, which has already produced self-driving vehicles.PHOTO: REUTERS

Hyundai is zooming onto the self-driving scene.

Following the leads of General Motors, Uber, Apple and others, the South Korean car-maker has just unveiled bold plans to invest in autonomous vehicles and other related systems.

Despite the late start, well-chosen partners and support from Seoul give it a fighting chance.

The race for dominance is well under way. Alphabet's Waymo and GM Cruise, backed by SoftBank Group's US$100 billion (S$136 billion) Vision Fund, already clocked up more than 25,000km of hands-free rides last year, according to a report last year by a California government agency.

Catching up will not be easy.

Unlisted parent company Hyundai Motor Group, effectively led by executive vice-chairman Euisun Chung, said last week it would plough some US$35 billion into developing new technologies through 2025. It optimistically plans to offer fully autonomous driving systems to taxi fleets and rival auto-makers in three years.

There is understandable scepticism. Hyundai Motor shares hardly budged after the announcement. The US$26-billion company is already grappling with costly recalls and sluggish sales in its largest market, China.

It also has a weak track record in new discoveries. Last year, it spent less than 3 per cent of revenue on research and development, compared with nearly 7 per cent at Germany's Volkswagen.

Hyundai is shrewdly enlisting outside help.

It recently announced a US$1.6-billion investment - the group's biggest one overseas - into a joint venture with Aptiv, a parts supplier and pioneer in self-driving cars.

Closer to home, there is potential to cooperate with local peers.

Only Japan boasts more driverless tech patents per capita, according to KPMG.

One possibility might be Samsung, which is also developing next-generation wireless communications and software.

National champion status should help Hyundai too.

President Moon Jae-in's government has vowed to provide systems and infrastructure to support completely driverless cars by 2024.

It is offering an entire city for test drives and the country's mobile network is among the most robust in the world: 4G coverage reaches 96 per cent of the population.

What is more, Hyundai has time on its side. Driverless technology is new enough that no one can claim a decisive lead. There is room yet for a dark horse.

A version of this article appeared in the print edition of The Straits Times on October 26, 2019, with the headline 'Hyundai a dark horse in driverless car race'. Print Edition | Subscribe