Germany's Daimler AG plans to start selling a self-driving car by 2020 as part of its campaign to regain the top spot among premium carmakers, its development chief said.
Carmakers and suppliers across the world are working on ways to make driving safer and more comfortable through automation, and the race is on to bring the technology to the mass market.
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"We want to be the first to launch autonomous functions in production vehicles. You can be sure: we will accomplish that in this decade," Daimler head of development Thomas Weber said.
Daimler, battling to regain the top stop in the luxury car market from German rival BMW, is focusing on so-called highly automated driving, in which cars master situations such as cruising the motorway or manoeuvring through traffic jams while the driver relaxes.
The car would recognise difficult situations such as dealing with traffic lights or urban driving among pedestrians and cyclists, and hand control back to the human behind the wheel.
Daimler, the maker of Mercedes-Benz and Smart cars, is not alone in its ambitions. Japan's Nissan, for example, has also announced plans to launch a car completely guided by computers this decade.
Testing is already under way in many countries. U.S. internet search and advertising group Google has fitted out several cars with radar-like equipment that lets them navigate roads in California and Nevada.
The technology will feature at this week's Frankfurt car show, the world's biggest, although experts say the move from dream to reality will likely take 10 to 15 years.
German auto supplier Continental aims to enable cars to drive themselves at speeds of up to 30 km per hour (18 miles per hour) by 2016, and at up to 60 km/h by 2020.
Google is reportedly discussing an alliance with Continental on self-driving cars that could be announced as soon as this week.
Daimler's Weber said it was hard to forecast exactly when drivers would turn into passengers in their own cars. "Autonomous driving will not come overnight, but will be realised in stages," he said.
One obstacle to overcome is making it legal for cars to steer themselves. European Union laws currently call for drivers to be in control of cars at all times, so test vehicles at Daimler and BMW need special approval in Germany.
There's also the challenge of convincing drivers of the technology, although Georgeric Legros, a Paris-based management consultant with AlixPartners, believes attitudes are changing.
"The slightly macho aspect of cars is gradually disappearing in favour of a more functional, safety-minded image," he said.
"People prefer to be comfortably installed in a leather seat, reading the paper or catching up on email, rather than stuck behind the wheel in a traffic jam or on a monotonous motorway."
Technology already on the market allows partly automated driving in which motorists stay in control but get a hand from the vehicle.
Daimler for instance offers traffic jam assistance, which can maintain distance to other cars in stop-go situations, in its top-line S-Class Mercedes, and BMW will roll this out in its new i3 electric car before the end of the year.
Rivals including Audi and Volvo Cars are moving in the same direction.
Daimler sees itself ahead in the race to develop robot cars because it says its technology can handle city driving as well as motorways. It uses readily available sensors rather than specially designed technologies for research vehicles.
A Mercedes test vehicle recently travelled the same 100-km stretch between the German cities of Mannheim and Pforzheim that Bertha Benz drove 125 years ago to demonstrate the practicality of the automobile. (Additional reporting by Laurence Frost; Writing by Michael Shields; Editing by Mark Potter)