As part of its full-fledged initiative of new growth engines, Samsung has recently quickened steps toward connected car technologies that are expected to play a major part in the conglomerate’s future pillars of electronics, bio and finance.
After setting up an automotive electronics team in December, Samsung Electronics recently announced a deal to buy the US car infotainment provider Harman International Industries for $8 billion. This is the latest in a series of the company’s push into the connected car business, including the investment in Chinese electric carmaker BYD and partnerships with global firms such as BMW and AT&T.
On Monday, Samsung Electronics’ Vice Chairman Lee Jae-yong met with Harman’s CEO Dinesh Paliwal in Seoul and pledged full support for Harman to play a key role in Samsung’s automobile business.
Early in the day, Paliwal said at the press briefing, “The marriage between Samsung and Harman can create a great synergy as Harman holds strong audio portfolios in auto parts while Samsung has chip, display and 5G technologies.”
Harman is currently supplying its infotainment and car audio technologies to global automakers including Mercedes-Benz, BMW, Audi, Toyota, Volkswagen and Hyundai.
From left: Samsung Electronics’ Chief Strategy Officer Sohn Young-kwon, Harman’s CEO Dinesh Paliwal and Samsung’s automotive division chief Park Jong-hwan hold hands at a press briefing Monday at the company’s Seocho office building. Samsung Electronics
Also, in July, Samsung acquired a 2 percent stake in Chinese electric carmaker BYD for $455 million, becoming the ninth-largest shareholder of the company. A month later, Samsung was reported to have been considering a deal with auto supplier Magneti Marelli, a subsidiary of Fiat Chrysler.
“M&A deals are the right choice for Samsung to save time as the automobile business has a different character from Samsung’s existing business portfolios,” said Lee Seung-woo, an analyst at IBK Investment & Securities.
Alongside merger and acquisition deals, Samsung has also been developing its own car solution, Samsung Connected Auto, which provides a similar service to Apple’s CarPlay and Google’s Android Auto.
The connected car solution, which was unveiled at the Mobile World Congress in February, has been supplied to the US mobile carrier AT&T.
Samsung is expected to continue to accelerate its efforts to move further into the growing connected car market, analysts said.
“Samsung’s ultimate direction in its automotive business is to become a parts and solution provider instead of carmaking,” said Kim Dong-won, an analyst at Hyundai Securities.
“Samsung may have an edge over its rivals such as Bosch or Continental AG when the company’s automotive chip and display technologies are combined with Harman’s global client network of infotainment systems,” Kim added.
The global automotive parts market is expected to grow to $303 billion by 2020 from $239 billion this year, according to research firm Strategy Analytics.
By Shin Ji-hye (shinjh@heraldcorp.com)
