Carmakers look to spread risk

BMW and Daimler, the world’s top luxury carmakers, have announced alliances with suppliers, talking up the virtues of having a bigger pool of engineers to develop a selfdriving car.

But another motive behind these deals, executives and industry experts said, was a concern that robocars might not live up to initial profit expectations.

Carmakers are increasingly looking to forgo outright ownership of future autonomous driving systems in favour of spreading the investment burden and risk.

The trend represents a clear shift in strategy from just over a year ago when most firms were pursuing standalone strategies focused on the engineering challenge of developing a self-driving car.

“Although it is a substantial market, it may not be worth the scale of investments currently being sunk into it,” a board member at one of the German carmakers, who declined to be identified, said.

Dozens of companies are vying for a market which, according to consulting firm Frost & Sullivan, will only make up about 10 to 15% of vehicles in Europe by 2030.

In July last year, BMW became the first major carmaker to abandon its solo development of self-driving cars in favour of teaming up with chipmaker Intel and software manufacturer Mobileye to build a platform for autonomous cars technology.