An increasing number of South Korean companies are making a direct investment in overseas autonomous driving technology companies.
ESMO Co., a South Korean wiring harness producer, made a 26.30 billion won (US$22.32 million) investment in France-based self-driving car developer Navya on July 1, according to industry sources on July 16. Founded in 2014 and listed on the Euronext, Navya has succeeded in commercializing autonomous shuttle buses for the first time in the world. Until now, the firm has sold 150 units of self-driving shuttle bus to 20 countries around the world.
Navya is known to be testing the Level 5 autonomous driving technology, which is the highest level. A Level 5 driverless driving system is fully computer controlled in all circumstances with no human intervention. ESMO is planning to secure an exclusive right to sell Navya buses in Northeast Asia. The company is also planning to set up a production base in South Korea to directly assemble and sell products.
Conglomerates and investment companies are also paying more attention to investment in autonomous cars. Hyundai Motor Co. and its sister company Kia Motors Corp. announced on June 13 that they carried out a strategic investment in U.S.-based self-driving technology company Aurora Innovation Inc. This is their third investment in autonomous driving technology firms after Israel’s Opsys Technology Co. and U.S.’ Metawave Corp. They aim to start the pilot Level 4 robot taxi project in a smart city using eco-friendly cars in 2021.
Samsung Venture Investment Corp., a venture capital subsidiary specializing in investments under Samsung Electronics Co., also participated in a US$24 million (28.50 billion won) funding round for Sense Photonics Inc., a U.S. startup which builds LiDAR and 3D sensors for autonomous vehicles, on June 12. LiDAR is a type of scanners that measure distance to a target by illuminating the target with laser light and measuring the reflected light with a sensor. It is used to accurately identify objects and measure distances for driverless driving.
The increasing investment in autonomous driving technology companies is attributable to the rapid growth of the self-driving vehicle market. Global market research firm IHS Markit said that the global self-driving car market will grow from 51,000 units in 2021 to 33.70 million units in 2040. The size of the market is also expected to expand from 221 trillion won (US$187.53 billion) in 2020 to 1,348 trillion won (US$1.14 trillion) in 2035. In particular, South Korea has excellent communication infrastructure which is essential to autonomous driving but it has a relatively slower pace of self-driving car development. This is why domestic companies are joining hands with foreign firms to rapidly commercialize driverless cars.