With a focus on catching up with rival companies in the area of self driving vehicle technologies, its largest overseas investment will be made by the South Korean carmaker Hyundai Motor Group. The company said that it would invest $1.6 billion in a joint venture with Aptiv for development of technology for self driving vehicles.
One of the major reasons that global auto majors are choosing to go for joint ventures for the development of self driving vehicles is sharing of the huge financial and technological burden for the same.
While most of its rival global auto companies have already struck strategic partnerships and invested heavily in development of technologies for electric and autonomous vehicles, Hyundai has lagged behind. For example, a joint venture for automated driving technology was announced earlier this year by BMW and Daimler.
Hyundai Group and Aptiv said in a joint statement that $1.6 billion in cash and $400 million in research and development resources and others would be contributed jointly by Hyundai Motor, Kia Motors and Hyundai Mobis. That would take the valuation of the joint venture to about $4 billion, the companies added.
Its own autonomous driving technology, intellectual property, and about 700 employees dedicated completely on the development of scaleable autonomous driving solutions would be provided as its contribution by the Dublin-headquarterd Aptiv and the company will own 50 per cent of the joint venture.
Fully driverless systems will be tested first by the joint venture in 2020. Further the joint venture will also have a autonomous driving platform ready for manufacturing by 2022 which will be able to cater to such vehicles for the robotaxi providers, fleet operators and automakers.
Aptiv manufactures vehicle components and provides technology for self-driving cars.
In the world of automated driving system companies, Aptiv at No.4, after Waymo, General Motors and Ford, by market research firm Navigant Research. According to Navigant Research, Hyundai is not among the top 10 vendors.
In the area of advanced safety and user experience segment, Hyundai Mobis was one of its rivals, Aptiv said in its 2018 annual report. The company mentioned the Bosch Group and Denso Corporation as the other close competitors. According to the annual report, GM, Volkswagen and Fiat are the major customers of the company.
A Hyundai spokesman said that Hyundai Motor is also one of the customers of Aptiv.
Analysts said that this latest joint venture also indicates clearly that the earlier stated strategy of Hyundai trying to develop its in-house technology has been abandoned by it. The previous strategy had caused concerns among investors that the company would be lagging behind in electric and automated technologies while rivals surge ahead.
In terms of worldwide sales, Hyundai and its affiliate Kia Motors together ranks fifth and the company had earlier partnered with rivals for a series of investments in technology firms which included making an investment in the self-driving car tech startup Aurora.
By 2023, investments of 14.7 trillion won ($12.3 billion) in future technologies such as self-driving, connectivity and car sharing would be made by it, Hyundai Motor had announced in February this year.
(Adapted from Reuters.com)