Daily Management Review

Global Auto Firms In China Rush To Store Car Data Locally As China Proposes New Rules


There is growing pressure on auto companies in the biggest car market of the world - China, over how these companies deal with information from vehicles and this has prompted foreign auto companies like BMW, Daimler and Ford to set up facilities in China for storing data generated by their cars locally in China.
An ever increasing range and types of sensors and cameras for helping drivers can now be fitted in cars.  The data that is generated from such additions of new technologies can also be used by auto companies to help develop new technologies, such as autonomous driving systems. Such usage has however raised privacy and security concerns especially when such information could be sent to a foreign country.
The storage and handling of customer data in China has put the United States based electric car maker Tesla under public scrutiny in the country.
There were reports last week of some employees of some Chinese government offices being asked not to park their Tesla cars inside government compounds because of security concerns related to the on board cameras fitted on the company’s cars that help in assisting drivers. Announcement of building a new server facility in China that will be used by Tesla to store data generated by all vehicles that the company sells in the country was announced last week by the US based company which considers China to be one of its most important markets.
There are other auto makers that have done the same, according to reports.
A data center in China in the first half of last year was constructed by Ford Motor and it is used for storing all vehicle data that the company sells in the country.
It operates "local data centers in China for the Chinese vehicle fleet," BMW said without saying when they opened.
It runs "a dedicated vehicle backend in China, where vehicle data is stored", Daimler said.
While no details of how they manage their data in China were provided by General Motors and Toyota Motor Corp, France's Renault said it does not yet have a car data center in China. Nissan Motor and Stellantis said they would comply with rules in China but provided no further details.
Compliance with data protection rules was crucial for a successful digital transformation, Volkswagen said, but added that "as the regulatory environment is still in rapid development, it is too early for us to comment on the specifics."
Under the cyber security law introduced in China in 2017, key locally generated data is required to be stored onshore in China. However that was prior to the advent of the "smart" cars.
According to a draft rule posted by China's cyberspace regulator this month, auto makers need to mandatorily get customer approval for collecting their driving data. The proposed law also will require auto companies to store data locally and will be able to send data to foreign entities only after obtaining regulatory permissions.
Tu Le, an analyst at China-based research firm Sino Auto Insights who was critical of manufacturers that have been slow to adapt, said on the wake of the 2017 cybersecurity law, the new proposals shouldn't be a surprise to any automakers.
"The lack of a 'data' strategy tells me that decision-making is still centralized at their home offices and that they're still struggling to evolve into 'digital' first companies," Le said.