Does Magna International's Self-Driving System Have a Chance?

Magna International (NYSE: MGA), the giant auto-industry supplier, said that is has developed a new technology platform that will allow automakers to build self-driving capabilities into their vehicles.

Magna joins an already-long list of companies inside and outside of the traditional auto industry that have announced plans to supply parts or systems for self-driving vehicles.

Does it stand a chance of getting traction in this increasingly crowded market?

What Magna said about its new product

In a statement, Magna described its new MAX4 system as a "a fully integrated, customizable and scalable autonomous driving sensing and compute platform that can enable up to Level 4 autonomous driving capabilities in both urban and highway environments." (You can learn more about the "levels" of self-driving technology here.)

Its sensor suite is similar to those under development by rivals, incorporating cameras, radar, lidar units, and ultrasonic sensors. Those sensors feed signals to a dedicated computing platform.

The MAX4 platform is designed in such a way that it can be easily integrated into major automakers' own systems. Magna's chief technology officer, Swamy Kotagiri, emphasized that the system won't take up significant space in the vehicle's interior or cargo compartment and won't require automakers to compromise their designs:

Magna said the MAX4 system offers automakers the option of using a simple control interface, similar to that of a traditional cruise-control system. A lighted display indicates that the vehicle is in self-driving mode, and drivers can disengage it by pressing a button or touching the brake pedal.

Magna plans to share more details and will demonstrate the MAX4 system at the International Motor Show in Frankfurt, Germany, next month.

How will Magna fare in this crowded market?

A lot of companies are gearing up to sell full or partial self-driving systems to automakers. Magna's entry may have to compete with efforts from, among others:

• Rival auto supplier Delphi Automotive, which is working on a similar "turnkey" system in partnership with chip giant Intel (NASDAQ: INTC) and its Mobileye subsidiary.
• Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Waymo subsidiary, formed from the long-running Google Self-Driving Car Project.
• Ford Motor Company (NYSE: F), which may offer the self-driving system it's developing with start-up Argo AI to other automakers.
• Other big industry suppliers, including Continental AG, Robert Bosch GmbH, and Denso.
• Other tech giants, including Baidu (NASDAQ: BIDU) and possibly Apple.
• Other companies that are currently small or operating in "stealth" mode.

At least when it comes to selling systems to traditional automakers, Magna has substantial advantages over the tech-sector entrants: It knows how to create a system that can be integrated into mass-produced vehicles and will pass automakers' strict "validation" testing; it has existing relationships with most of the global automakers; those automakers will take Magna's offering seriously.

The upshot: The devil will be in the details

Of course, other big auto suppliers like Delphi and Continental have the same advantages. Whether Magna's entry will shine over theirs will depend on many factors, some of which we can't judge yet. (For starters, how does its software compare?)

But while Magna is hardly a tech-investor darling, it's a serious, credible player in the auto industry -- and it's a sure bet that automakers will give its system a serious look. Stay tuned.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Rosevear owns shares of Apple and Ford. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Baidu, and Ford. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.