The Chinese technology giants Tencent and Alibaba are on track to build the cars of the future, vehicles linked seamlessly to the Internet, to shopping platforms and navigation aids on the road. The E-commerce giant Alibaba and WeChat, the famous instant messaging application, provided by the company Tencent, have both announced plans for cars last month, with the platform of video streaming, LeTV.

A revolutionary mix

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These actions could shake the traditional industry in the world’s biggest car market, but the details of their visions of the automobile are still vague, analysts said. At the Shanghai Motor Show, the booth of LeTV partner, BAIC Motor, shows the concept for a vehicle having two front seats with a steering wheel and a futuristic control panel screen.

LeTV’s CEO Jia Yueting believes in the mobile Internet era, the automotive industry is facing an unprecedented revolution. “The Chinese automotive industry has the potential to surpass the traditional giants, the American, Japanese, Koreans and Europeans manufacturers.

A promotional film broadcasted during the motor show explains that the LeTV car would have features such as gesture recognition, automatic parking and a locking device that works with fingerprint recognition. All this is currently at the conceptual stage. These advances reminds us of Google who has already made headlines with his plans for a “self-driving car.” Rumor has it that Apple is also intending to develop an electric car.

Alibaba, which the US-listing was the greatest in history last year (25 Billion US-Dollars) plans a “car of the Internet” that would use technology to provide a quite innovative driving experience comprising of e-commerce functions, digital entertainment, GPS and communication services.

Strategic Partnerships

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Somewhere, Alibaba is already in the car business. Its B2C platform Tmall.com is now selling more than 30 new cars, including a Ford Mustang that was launched in limited edition at the Shanghai Motor Show. The rival Tencent also has plans for a car connected to the Internet, while LeTV plans an electric vehicle.

The China market for hybrid vehicles and fully electric cars is narrow, but the government provides some support for the emerging industry.

Both Alibaba and LeTV companies have selected powerful state-owned companies as partners for their projects, a strange combination for such private companies. Alibaba is currently working with China’s largest automaker, based in Shanghai, SAIC Motors. The Chief Engineer of SAIC Motors is planning and indispensability of Internet for cars of the future.

When Industry and Technology meet…

Last week, Alibaba also announced that it had formed a strategic partnership with Shanghai General Motors, a General Motors and SAIC Motors joint venture to finance, Big Data Marketing, the after-sales service and O2O Commerce.

The LeTV partner, BAIC Motor is the listed unit of Beijing Automotive Group, which reports directly to the central government. An official of BAIC Motor said that production of such vehicles would depend on the demand but could be on the market within two years.

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These moves are brilliant, because a partnership with an established automotive company allows actors of technology to develop a car with a conventional combustion engine, since electric vehicles are currently the only market segment open to companies outside the industry, under government rules of course. Tencent sourced much less traditional partners, such as the Apple supplier Foxconn of Taiwan and a luxury car dealership in China, Auto Harmony for his vehicle. Speaking of true partnership is still very early, cooperation is being developed.

Should you want to know about Chinese high tech market and cars, go take a look here, here.

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