Samsung appears to be looking to diversify its electronics business, and is preparing to put more effort into cars. The company has created a new team within the Samsung Group that will l0ok into building products for the automotive industry; this initial focus will centre on in-car entertainment, satellite navigation and autonomous driving technologies. The move comes as Samsung faces a second year of falling smartphone profits and a forecast that does not look all that bright.
Samsung Electronics has been facing falling profits over the last two years, although it appears have managed to arrest the falling numbers with a series of price adjustments and a wider portfolio of midrange phones. The company has seen profits improve slightly in Q3 2015 year on year, although that has not stopped investors from calling on the company to better leverage its technology to cater to increasing demand from the automotive industry.
This new group will take advantage of the fact that Samsung is already capable of supplying electronic components to car manufacturers, although it may take several years before we see results. The automotive industry moves a lot slower than consumer electronics; mostly due to having more stringent requirements and a longer approval process. Still, this is Samsung looking forward to a future that may see its smartphone market share further eroded by Chinese manufacturers.
Samsung is no stranger to the automotive industry, as it once had its own car manufacturing group. Samsung Motors did not fare so well, and has been a subsidiary of Renault since 2000. However, Samsung is still a minority shareholder and could potentially use connection to further its vehicular electronics aspirations. That being said, it is extremely unlikely that Samsung will start making its own cars again.
[Source: Reuters]
