• Toyota and Nissan pair up with Tencent and Baidu. The companies will offer services through Tencent’s strengths in big data, AI and cloud computing.
  • More recently, they have been left flatfooted as local manufacturers led by BYD have snatched market share with software-laden electric vehicles aimed at younger drivers.
  • Foreign automakers are fighting to show they can remain relevant in China, amid the pressure from the shift to EVs, the rise of domestic brands and a price war.

Toyota Motor of Japan and Tencent of China will collaborate while Nissan and Baidu will team up, the companies announced on Thursday, April 25. These cross-border alliances demonstrate how crucial artificial intelligence is to the auto industry.

Reasons for cooperation

The distinct declarations made by two of the largest Japanese automakers at the Beijing auto show further highlighted their efforts to adapt to the significant technological changes that have upended their previously advantageous positions in the Chinese market.

Japanese automakers were among the most well-known international brands in China only a few years ago. More recently, local manufacturers led by BYD have taken market share with software-laden electric vehicles targeted at younger drivers, leaving them completely caught off guard.

Amidst pressure from the switch to electric vehicles (EVs), the emergence of local brands, and a pricing war, foreign automakers are battling to demonstrate that they can stay relevant in China.

Although it has escaped the severe blows suffered by Honda Motor and Nissan, Toyota has seen a decline in sales.

In 2023, the company witnessed a 1.7% decrease in sales to 1.9 million vehicles in China, marking the second consecutive year of decline.

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Details

According to Yiming Xu, director of brand and communications for China at Toyota, the largest carmaker in the world by volume, a China-made passenger vehicle that will go on sale this year will feature technology from tech giant Tencent. According to Xu, the businesses will provide services by leveraging Tencent’s advantages in cloud computing, AI, and big data.

According to Nissan, it and Baidu have inked a memorandum of understanding to research artificial intelligence and self-driving cars. Nissan said that it will investigate the viability of upcoming technological advancements using Baidu’s generative AI on its platform. It added that Baidu’s AI products will be installed in its Chinese automobiles.