BMW says self-driving car alliance is making sense to rivals now

self-driving cars BMW
The logo of BMW spotted during the first press day of the Paris auto show, in Paris, France, October 2, 2018. REUTERS/Benoit Tessier

FRANKFURT (Reuters) – BMW rivals and ride-hailing companies are considering joining its consortium for developing self-driving cars as auto industry profits come under increasing pressure, board member Klaus Froehlich said on Tuesday.

Carmakers and ride-hailing companies have sought to build self-driving cars as a way to enter the business of smartphone-hailed robotaxis. However, they are entering a crowded field where the likes of Apple and Alphabet have been pouring billions of dollars into cars that can drive themselves.

“Unfortunately, everybody thought they would be the winner and would have an enormous ride-sharing business,” BMW board member Klaus Froehlich told Reuters on the sidelines of the Paris Motor Show.

BMW, however, wanted to spread the cost of investment and started a consortium that now includes Mobileye, Magna, Fiat Chrysler and auto suppliers Delphi Automotive and Continental.

The technology is proving complex and the returns on investment are taking longer to materialize, causing investors to scrutinize whether go-it-alone strategies make sense.

“I have had another German carmaker saying, ‘it sounds like we wasted a lot of money’. I also have had contact from tier one suppliers who say ‘lets do a common platform’,” Froehlich said.

“Some ride-hailing companies have also expressed interest in joining the consortium.”

Froehlich would not be drawn on who might join the consortium beyond saying “there may be some news on this next year”.

(Reporting by Edward Taylor; Editing by David Goodman)

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