January 3, 2018 12:25 am JST

Honda to team up with Alibaba in connected cars

Online conglomerates vow to lead the future of China's auto market

Nikkei staff writers

Alibaba's internet-connected cars are introduced at a launch event in Hangzhou, China, in July 2016. © China Daily/Reuters

TOKYO -- Honda Motor will partner with Alibaba Group Holding on developing services for connected cars as more automakers start working with Chinese internet conglomerates in hopes of making further inroads into the world's largest auto market.

The Japanese automaker will work with the Chinese e-retailing titan's AutoNavi business. They plan to develop a service that lets drivers make reservations using AutoNavi maps and make payments via Alibaba's online platform Alipay. Decisions will be made soon on when to make the service available on which vehicles.

Alipay has over 500 million users and is a commonly used payment method in China. The planned service would also let drivers pay for parking and gas more conveniently.

Honda and AutoNavi have partnered since 2015 on multipurpose car-navigation systems that exploit big data. They are looking to extend their collaboration to cover services for connected cars, tapping Alibaba's array of services.

China vows to be a leader in promoting electric vehicles, car-sharing and other next-generation automobile technologies. Honda has been pursuing a number of partnerships with local enterprises, like jointly developing an electric vehicle due out in 2018 with leading information technology company Neusoft.

Internet companies have been playing a bigger role in the Chinese automotive sector, thanks to self-driving tech and other cutting-edge developments. Baidu, which operates China's largest search engine, announced its Apollo open-source autonomous-driving platform in July. Apollo uses artificial intelligence technology that Baidu is jointly developing with the Chinese government and has attracted over 1,700 domestic and international partners, including Daimler, Ford Motor and Intel.

Tencent Holdings, with a market capitalization of 3.968 trillion Hong Kong dollars ($508 billion) as of Tuesday, has invested $1.77 billion in Tesla. It is investing in Chinese electric-vehicle startups as well. Chairman and CEO Pony Ma Huateng has said the future of automobiles lies in connected cars, and he has expressed plans to integrate Tencent cloud technology into such vehicles.

Alibaba also provides Chinese automakers with systems for voice control of GPS and other in-car devices. The company is looking to make further inroads into the field and has announced that it is providing a similar system to Ford as well.

Chinese President Xi Jinping wishes the nation's auto industry to be not only big, but also competitive. He has backed the development of such next-generation technologies as self-driving cars and electric vehicles.

Connected cars require much of the same tech as smartphones, such as payment platforms and artificial intelligence.

Honda Motor Co., Ltd.

Japan

Market(Ticker): TKS(7267)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 65,062.55M
Shares: 1,811.42M
Asia300

Alibaba Group Holding Ltd.

China

Market(Ticker): NYS(BABA)
Sector:
Industry:
Retail Trade
Internet Retail
Market cap(USD): 469,849.57M
Shares: 2,555.89M
Asia300

Baidu, Inc.

China

Market(Ticker): NAS(BIDU)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 88,712.55M
Shares: 34.72M
Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 544,018.12M
Shares: 9,499.05M

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