Samsung to spin-off new car division in drive for profits

10 Dec 20158 Shares

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Korean manufacturer Samsung has said it is to create a separate division for automotive tech, like infotainment and autonomous driving, to help the company overcome its poor smartphone sales.

The need for a new profitable venture is paramount for Samsung Electronics, which is expected to see its profits made from phones drop for the second consecutive year this year, with shareholders encouraging the company to find ways to best use its internal hardware, such as its microprocessors.

This move, the company feels, will allow it to focus on the growing autotech market with a newly-established team expected to work independently of other divisions to become one of the world leaders in providing the hardware to power future connected cars, according to Reuters.

Along with future autonomous driving capabilities and infotainment systems, this new Samsung division will work on developing satellite navigation technology, with some help from its technology arms within the Samsung group.

Investors in the Samsung Groups say that, along with the company’s battery production division and its electronic components division, the company can attempt to dominate a market that is valued somewhere in the region of $500bn.

However, Samsung does not foresee an instant return on this decision, with investor expectations saying that it will take several years before it becomes a worthy, profitable venture due to the increased safety regulations required when working with autotech.

Autotech manufacturing image via Shutterstock

Colm Gorey is a journalist with Siliconrepublic.com

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