Samsung Electronics sets up new team to target car market

9 Dec 2015 | Author: | No comments yet »

Samsung Electronics to form auto team in search of growth driver.

SEOUL— Samsung SSNHZ 0.00 % Electronics Co. said Wednesday it will establish a new team for developing next-generation auto parts, joining global technology heavyweights in betting on the automotive market to drive growth.

SEOUL: Samsung Electronics Co Ltd said it will create a team to develop automotive-related businesses, as it searches for a new profit driver while struggles at its smartphone division deepen. The new team will be separate from the company’s existing three business units and will focus on making components used in self-driving and Internet-connected cars, the South Korean company said.

Samsung, in a statement, said the team will work outside of existing divisions to grow sales of car components, with initial focus on in-car entertainment, satellite navigation and autonomous driving technologies. Samsung, the world’s largest maker of smartphones, currently has a mobile unit, a components unit that makes chips and displays, and a consumer-electronics unit for televisions and washing machines. Electronics makers from Apple Inc. to Panasonic Corp., LG and Samsung are vying for slices of an automobile industry that expects to put autonomous, or driverless, vehicles packed with electronic sensors and displays on the road in this decade.

The announcement is the company’s first official acknowledgment of its interest in the automotive business where information technology is expected to play an increasing role in the gradual shift toward next-generation cars including electric vehicles and self-driving cars. Meanwhile, market estimates suggest profit from smartphones – Samsung’s former cash cow – is set to fall in 2015 for the second consecutive year, putting pressure on the manufacturer to find new profit drivers. For Samsung, the effort is also a way to help make up for declining growth in televisions and a mainstay smartphone business that’s been battered by lower-cost rivals in China and India. “Samsung just can’t leave this huge market untapped,” said Greg Roh, an analyst at HMC Investment Securities Co. in Seoul. US patent filings data compiled by Thomson Reuters IP & Sciences showed increasing efforts by the world’s top smartphone maker and its affiliates to push into the rapidly growing market for automotive components, software and services that is worth around US$500bil (RM2.13tril).

Samsung Electronics and affiliates such as battery producer Samsung SDI Co Ltd and electronic components maker Samsung Electro-Mechanics Co Ltd can become major forces in automotive technology by combining offerings into a single platform, investors and analysts said. Samsung formed an alliance with Volkswagen AG’s Audi unit to provide memory chips for the company’s dashboard, infotainment and advanced driver assistance applications, the South Korea-based company said Nov. 23. LG is supplying 11 systems for the new Bolt, General Motors Co.’s electric car, including the electric-drive motor, charger, batteries, the companies said in October. SK Securities analyst Kim Young-woo said while Samsung Electronics is moving in the right direction, Samsung Group as a whole needs to combine key component-making operations under a single umbrella in order to succeed.

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