(Bloomberg) -- A simulated city opened Monday on the north campus of the University of Michigan to test how self-driving cars will travel in the future without mowing down pedestrians or causing colossal crashes.

"We had the faculty here at the university design the fully evolved future," Peter Sweatman, head of the Transportation Research Institute, which oversaw the creation of the M City test facility, said in an interview. "After all, we're replacing humans with machines and those machines need to be able to operate in a full, rich environment."

Automakers are racing to develop self-driving cars and overhaul their business models for a world where mobility is being redefined as most of the global population crowds into large megacities during the next two decades. Driverless cars that move in harmony may become essential to keep people and goods flowing safely and efficiently.

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