China automotive – 2 voice race.

China likely to be first with a fully digitised vehicle. 

• Alibaba’s partnership with foreign car makers to offer its voice assistant in the vehicles transforms the Chinese market into a two-voice race between Alibaba and Baidu.
• Alibaba has already released its assistant Tmall Genie for a smart speaker but it has now extended this domain into vehicles with the release of Tmall Genie Auto.
• So far, Audi, Renault and Honda have signed up to offer the assistant in the vehicles they sell in China.
• I suspect that SAIC which has already signed up for Alibaba software in its vehicle will also use the digital assistant.
• The main competitor in China is Baidu’s Duer OS which has been available for the vehicle for some time and is rated by RFM as the best AI in China and 2^nd globally.
• Putting Tmall Genie Auto into one’s vehicle is very similar to what many vehicle makers in Western markets are doing with Amazon Alexa.
• With the exception of Byton, Alexa in the vehicle is the equivalent of an Amazon Echo dot embedded in the dashboard with its audio output connected to the speaker system of the vehicle.
• This means that it is completely isolated from the systems of the vehicle and so “Alexa, wind down the windows” is likely to be met with Alexa’s typical lack of comprehension.
• Tmall Genie Auto is very similar as in Audi, Renault and Honda, drivers and passengers can do the usual sorts of things as well as check in on smart devices at home but not much more.
• The one exception is likely to be SAIC which has taken Alibaba’s software in its infotainment unit (like Android Automotive) and Tmall Genie Auto will be resident there.
• This will give SAIC the option to enable Tmall Genie Auto to integrate with the vehicle systems and provide a much better voice-based vehicle experience.
• From a Western OEM perspective, there is very little point in trying to offer digital vehicle and Digital Life services to vehicle users in China.
• This is because China is completely different to every other market when it comes to digital services and it is already dominated by a few big companies whose services are already prevalent.
• Furthermore, the Chinese market is dominated by state-owned vehicle makers making foreign OEMs also-rans in China.
• Consequently, there is no reason why foreign OEMs should not do a full integration with Baidu Duer OS or Tmall Genie Auto as they will lose very little by relinquishing control of the data the vehicle generates in China.
• However, in developed markets, the opposite is true as RFM research has found the digital services based on sensor data are likely to vital to their long-term survival as demand for vehicles starts to decline due to electrification and autonomy (see here).
• This is why Google’s Android Automotive offering is viewed with such suspicion.
• Given that there is much less friction to the deep integration of 3^rd parties into vehicles in China, it is likely that China will lead the way in terms of innovation for the digital vehicle user experience.
• This will be the place to look for ideas just as it was for Instant Messaging.