Self-driving vehicles could be the future and are expected to bring a transformation in the auto industry. Tradition automakers, who have banked on their ability to make economical vehicles on a large-scale for making profits, struggle to adjust to this new tech-driven, autonomous vehicle era. While, tech giants like Apple and Google have an upper hand due to their expertise in software.
Given the scenario, traditional automakers are finding ways to guard their place in the auto market. Fiat and BMW have resorted to one such strategy –
It was announced on Wednesday that Fiat Chrysler would cooperate with BMW to develop autonomous cars.
Fiat has been rather slow in the autonomous car race. It has been dealing with the problem of merger profits in the technology lead new world. The long-term peril for Fiat was that in the long run it would be downgraded to making cars for Silicon Valley’s Tech giants, who would supply the technology and make most of the profit. Waymo, Google’s autonomous vehicles unit , has already been using That’s minivans to test its self-driving tech.
But the traditional carmaker decided to join the alliance of BMW, Intel and Intel’s newly acquired self-driving technology unit, Mobileye. The company admitted to be open to new partners. This is a sign that the company wants to play a more active role in the future.
In the alliance, BMW has been working for a year now with chip maker Intel and Mobileye, an Israel company that makes sensors, cameras, software used in autonomous vehicles. Fiat will not bring any major technical know-how but it will bring it’s expertise in making mass market, economical vehicles that will compliment BMW’s strong hold in the upper end of the car market.
The chief executive of Fiat said that for traditional automakers to advance the autonomous technology, it is vital to form partnership between automaker, technology providers and suppliers.
In addition to the technology giants having an expertise in the software area, they also have a huge financial resources that dwarf those of the car manufactures. They are using those to invest intensely in the research and development, testing, and production of autonomous vehicles.
The traditional car makers have huge challenges to face in the near future to stay relevant in the new technology era.