Confluence of IT, autos tipped as growth engine

Your smartphone vibrates. As you pull it out of your pocket, the following message flashes across the screen: Your vehicle is being broken into.

This futuristic scenario may soon become a reality for owners of Korean cars, according to Hyundai Motor, which rolled out a number of test models this week showing off its experiments with government-subsidized IT innovations by small companies.

Of the four models presented to the media on Wednesday, only one, the third and latest edition of Hyundai’s popular midsized crossover Sante Fe, a sport utility vehicle, is now available on the market.

It features two new breakthroughs that enable the owner to lock and unlock their vehicle from afar, such as inside their office. They can also gun the engine from a long-range just by pressing a few buttons on their phone - particularly useful on a cold winter’s day.

The other three models revealed at the research center of Korea’s leading carmaker in Uiwang, Gyeonggi, represented tweaked versions of existing Kia Motors cars that are in a development stage. Kia is an affiliate of Hyundai Motor under Hyundai Motor Group.

A Kia Sorento was used to showcase the break-in alert, while the newest Sonata and Pride were equipped with voice-activation technology allowing drivers to control their in-car entertainment systems via spoken instructions.

Hyundai Motor Group used the event to promote a number of high-tech IT software programs and future plans for its automobiles, including one that lets passengers upload whatever is on their smartphone onto the car’s GPS screen.

These innovations were aided by the Ministry of Knowledge Economy, which has invested 6.9 billion won ($6 million) in developing software for the auto industry over the last three years.

This has led to two smart technologies now in commercial use, in the Santa Fe, and four more destined to hit the market soon.

To keep the momentum going, the ministry signed an MOU with Hyundai, small software and IT companies on Wednesday.

“The center has successfully set the scene to bring out the best of small companies in the automotive IT industry and commercialize many innovative technologies,” said Knowledge Economy Minister Hong Suk-woo.

“We expect to see even better results in the wake of this MOU, and the government will assist more actively to promote shared cooperation and growth between big and small companies.”

The ministry’s investment is also expected to help small companies stay afloat in increasingly treacherous and competitive waters in line with President Lee Myung-bak’s recent calls for big and small business to scratch one another’s backs.

The ministry has been channeling its investment into an affiliated “innovation center.” Some 23 small companies supported by the center saw their combined sales jump 34.3 percent from 2009 to 290.7 billion won last year. They also secured a total of 36 patents.

Based on the center’s performance, the ministry said it will continue to provide 2 billion won in financial support each year. It did not specify the number of years. Carmakers like Hyundai contribute by providing the small companies with their vehicles to use as guinea pigs.

Minister Hong said he hopes to see the IT industry converted to automobiles become an engine for future economic growth.

The Electronics and Telecommunications Research Institute estimated that the global market will expand to $270 billion from $120 billion in 2010. The local market is expected to swell from $5 billion to $17 billion over the same period.

Meanwhile, at the research center in Uiwang on Wednesday, officials explained how they were developing the smart systems for backseat passengers and digitizing dashboard screens for a better aesthetic to lure younger consumers.

“More screens are set to be installed for passengers in the back so they can also control the systems,” said Jason Oh, director of business strategy at Obigo, a small IT company that is working on equipping cars with full Internet access.

By Lee Sun-min [summerlee@joongang.co.kr]