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China tech

Baidu sees profit in curing Chinese drivers' parking headache

Self-parking poised to generate cash sooner than full autonomous vehicles

Chinese internet search leader Baidu is banking on autonomous vehicles, as with this self-driving bus.   © Reuters

BEIJING -- China's top search engine group Baidu looks to start reaping income on early stage autonomous-driving technologies, as its bread-and-butter online advertising business suffers from tighter regulations.

During an annual conference of the tech giant on Wednesday, CEO Robin Li demonstrated a "valet parking" service that lets a car find a parking spot on its own after dropping off the driver.

The self-parking service is expected to generate near-term revenue for Baidu before fully autonomous cars hit the road, which analysts do not expect to occur for at least a decade.

"Self-driving vehicles are the automotive equivalent of going to the moon," said Bill Russo, founder and CEO of advisory company Automobility, in Shanghai. "To get there, you first needed to orbit the Earth in Project Mercury and master multi-person space travel in Project Gemini."

Russo considers self-parking a "logical step" in the technology's development.

While companies are pouring money into technologies such as artificial intelligence that are intended to allow fully autonomous driving someday, investors are pushing for faster commercialization of solutions as fundraising has grown more difficult this year.

For the three months ending in March, Baidu recorded the first quarterly net loss since its listing in 2005, due to heavy investment in new businesses and lackluster growth in online marketing.

Baidu's demonstration showed that drivers can summon their vehicle with the "valet parking" system instead of walking to the parking lots themselves. The feature tackles the "pain spot" of urban drivers in China, Li said. They spend 30% of their time behind the wheel on parking, while 44% of parking spaces in China have a low utilization rate, according to company research.

"We hope our AI can help save the least pleasant [parking] time for drivers," he said.

The company already has secured orders from automakers, Li said. It also is partnering with WM Motors, an electric vehicle startup in which Baidu invested, in applying the autonomous-parking system.

The first car model with such functionality is expected to enter mass production in 2021, WM Motors founder and CEO Shen Hui said during Wednesday's conference in Beijing.

Bob O'Donnell, president and chief analyst at TECHnalysis Research, was among the audience members "impressed" by the capabilities of Baidu's parking system. The California-based analyst said the system addressed a common problem for drivers in big Asian cities, and he thinks "many consumers would find the feature very appealing."

But O'Donnell has concerns about how well the system would work in real life.

"It's easy to stage a demo that likely uses Baidu's own parking lots, but real-world variations could be much more challenging," he told Nikkei Asian Review in an email. "Can you imagine the chaos that would be created if someone left a car in a long line and it stopped working properly? It could potentially cause huge problems and yet no one would be there to 'fix it' without calling the driver back down."

Indeed, the journey to develop more advanced autonomous-driving applications has been challenging for Baidu -- as shown during the conference when the billionaire CEO literally had cold water poured on his head.

The surprising incident occurred when a man rushed to the stage as Li introduced the self-parking function to an audience of 7,000 people. The man quickly spilled a bottle of liquid over Li's head. It took a second for Li to calm down, as he shouted at the attacker in English: "What's your problem?"

The man's identity and motive were unclear.

"There will be many unexpected events on the road of advancing AI technologies, but these won't affect our determination," the CEO told the audience, continuing his speech for another 35 minutes in wet clothes.

Baidu looks to commercialize its "Apollo Go" robotaxi project as well, with plans to expand the road tests to a second Chinese city -- the Hebei Province city of Cangzhou, said Shang Guobin of Baidu's Intelligent Driving Group.

The company is testing its driverless taxi fleet in Hunan Province's Changsha, having secured 45 licenses from the local government. Baidu aims to offer commercial ride-hailing services to residents there by the end of the year, Shang said.

Baidu also has signed a strategic partnership with Zhejiang Geely Holding Group, China's largest private automaker, to develop AI applications for automotive ecosystems.

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