As China considers new rules, global automakers move to store car data locally

By Yilei Sun and Tony Munroe

BEIJING (Reuters) – BMW, Daimler and Ford have set up facilities in China to store data generated by their cars locally, they told Reuters, as automakers come under increasing pressure in the largest auto market world on how they handle information from vehicles.

Cars are equipped with an ever-growing range of sensors and cameras to help drivers.

But the data they generate can also be used by manufacturers to help develop new technologies, such as autonomous driving systems, raising privacy and security concerns, especially when the information can be sent to the computer. foreign.

U.S. automaker Tesla is under public scrutiny in China for its storage and processing of customer data in the country.

Last week, Reuters reported that staff at some Chinese government offices were told not to park their Tesla cars on government premises due to security concerns with vehicle cameras, according to two people with knowledge of the issue. .

Tesla said Tuesday it has set up a site in China to store data generated by all the vehicles it sells in the country.

Other automakers told Reuters they had done the same.

Ford Motor said it established a data center in China during the first half of last year and stores all vehicle data locally.

BMW said it operated “local data centers in China for the Chinese car fleet,” without specifying when they opened.

Daimler said it operates “a dedicated vehicle backend in China, where vehicle data is stored.”

General Motors and Toyota Motor Corp have declined to discuss how they handle their data in China, while France’s Renault said it does not yet have an automotive data center in China.

Nissan Motor and Stellantis said they would follow the rules in China, but gave no further details.

Volkswagen said compliance with data protection rules was crucial for a successful digital transformation, but “as the regulatory environment is still rapidly developing, it is too early for us to comment on the details.”

None of the automakers have indicated whether they will share China’s data with their overseas offices.

Honda Motor Co and Hyundai Motor Co did not respond to requests for comment.

China introduced a cybersecurity law in 2017 that required all companies to store key locally generated data on land in China, but that was before ‘smart’ cars made this issue a major concern for automakers. automobiles.

This month, China’s cyberspace regulator released a draft rule requiring automakers to seek customer approval to collect driving data. The rule, in the public consultation phase, would also require automakers to store data locally and obtain regulatory clearance when they wish to send that data to foreign entities.

In the wake of the 2017 cybersecurity law, the new proposals should come as no surprise to any automaker, said Tu Le, an analyst with Chinese research firm Sino Auto Insights, who criticized manufacturers who were slow to adapt.

“The lack of a ‘data’ strategy tells me that decision making is still centralized in their home offices and that they are still struggling to scale to the first ‘digital’ businesses,” Le said.

The European Union’s General Data Protection Regulation also sets strict rules on how companies process and store data.

It’s unclear what impact China’s requirements will have on the way global automakers research and develop new models or technologies. It’s not unusual for companies to currently share data from China with their headquarters to develop models, executives from various manufacturers said.

“Data will ultimately be the difference factor for businesses because it’s what they will use to create products and services that will help them differentiate themselves from their competition,” Le said.

(Reporting by Yilei Sun and Tony Munroe in Beijing; additional reporting by Eimi Yamamitsu in Tokyo and Heekyong Yang in Seoul. Editing by Joe White and Mark Potter)

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