In an increasingly competitive automotive market in China, global car manufacturers like Toyota, Hyundai, and Mercedes-Benz are intensifying their collaboration with Chinese tech giants to regain market shares. These alliances focus on the development of technologies for autonomous driving and vehicle software, areas where Chinese brands are technologically leading.

For example, Hyundai Motor and Kia recently announced that they will be collaborating with Chinese internet giant Baidu on mapping technologies and artificial intelligence for autonomous driving. Nissan Motor is planning a partnership with Baidu in the field of AI, while Toyota is enlisting gaming giant Tencent for assistance with AI models, cloud services, and big data.

Mercedes-Benz, which recorded declining sales figures in China, its most important single market, aims to offer models with an entertainment system that includes a popular mobile racing game from Tencent, to transform its cars into "personal arcades."

These collaborations, which were mostly announced at the recently concluded Beijing Auto Show, reflect the intensified competition in the Chinese market. This competition manifests itself both in a months-long price war and in the development of automotive software systems that make Chinese brands some of the most technologically advanced worldwide.

The innovations of Chinese car manufacturers have enabled them, for the first time last year, to sell more vehicles domestically than their foreign rivals. Moreover, the increasing shift towards electric vehicles has reduced the once advantage of global manufacturers of internal combustion engines.

For foreign companies looking to offer autonomous driving technologies, collaboration with Chinese tech giants makes sense, say analysts. The Chinese government has so far expressed concerns about the data collected by Tesla's leading system for full self-driving, which has hindered its introduction.

This year, the supply of 'smart driving functions' is likely to penetrate the mass market in China, and foreign car manufacturers must catch up. Interactive control systems that enable functions such as the analysis of drivers' health data and stress levels to provide driving suggestions require access to local data such as user driving preferences and traffic and road conditions in China.

These Developments Pose a Challenge to Global Automakers Who Are Losing Market Share, and Emphasize the Need to Adapt to the Rapidly Advancing Technological and Consumer-Oriented Innovations in China.