In the next five years Russian internet major Yandex will install its multi-media system Yandex.Avto in two million Ladas, the best-selling car models of domestic carmaker AvtoVaz, as well as Renault and Nissan models assembled in Russia, Vedomosti daily said on May 21 citing the representatives of the companies.
Yandex has been active in transportation and mobility solutions, with a major merger of Yandex.Taxi service and Uber, and cooperation deal on driverless technologies with South Korean car major Hyundai, as well as other services in carsharing and carpooling markets.
With the help of $1bn recapitalisation from its main shareholder Renault Nissan, Avtovaz managed to emerge intact from the car market plunge of 2015-2016, strengthened its position as a top seller of the still bumpy market, and in 2018 turned in the first profit in a decade.
Now, the companies will join forces in pre-installing Yandex.Avto, multi-media content system with voice recognition and controls, analogous to Androd Auto and Apple CarPlay. Currently Yandex sells the software for RUB29,900 ($463) that can be installed on models such as Lada, Mitsubishi, Volkswagen, Nissan, Renault, Toyota, Kia, Hyundai and Skoda.
Yandex also provides mobile data package to access its services, such as Yandex.Navigation, Yandex.Music, and AI-driven personal assistant Alisa. As of 2016 about 50,000 cars with Yandex services pre-installed were sold, with the total number of vehicles estimated at 100,000.
The market would soar for Yandex after the Avtovaz-Renault-Nissan deal, as the carmaker is the largest in Russia with 603,404 vehicles sold in 2018, with market share of over 33%.
Reportedly the business model for Yandex would be based on copyright and subscription payments for each vehicle, while the carmakers would benefit from expanding the service proposal available to the car owners and maintaining a communication channel with them.
"The contract should further enhance the distribution of Yandex' services, expand monetization opportunities based on collected data and bring in extra revenue from licensing fees," BCS Global Markets commented on May 21, seeing news as positive for Yandex shares and maintaining a Buy recommendation.
"We have come a long way from dashboard navigation to a full-scale built-in multimedia system and are in a point of a new value proposal - cars that are connected to the internet, making cars a device with which one can easily and comfortably interact," Yandex representative told Vedomosti.
The availability of smart platform on board would enable other services, such as smart insurance taking into account individual driving styles, autonomous payments for parking and gas, etc. However, an option of passing to other multi-media service providers, such as Google or Apple, will be reportedly reserved.