Honda and Nissan agreed to collaborate on the development of in-vehicle software last week, and at least one academic says the duo should be joined by heavyweight Toyota in order to better compete with foreign rivals.
“Only two or three operating system makers for cars will survive — globally,” said Hiroaki Takada, an information science professor at Nagoya University, who also chaired the Japanese government’s committee on software-defined vehicles.
Japan has set a goal of having Japanese companies account for 30% of the software-defined vehicle market worldwide by 2030.
Automakers or technology firms responsible for the operating systems behind the software to make cars smarter and more autonomous will become just as crucial to advances in passenger transport as those making engines or batteries.
Currently, the leaders in that field are Chinese automakers and Tesla.
However, in the same way the smartphone sector is ruled by Google and Apple with their Android and iOS for iPhone operating systems, so too will the car industry ultimately be delineated, Takada said.
Were Toyota to join Honda and Nissan — and likely also Mitsubishi — in the development of an operating system for cars, that would be one possible way for Japan to become a world leader, Takada said.
Google and Huawei are likely to emerge as strong operating system developers in the automotive industry, Takada said, adding that even Tesla would find it difficult to do so independently.
Honda, Nissan, and Mitsubishi combined sold about 8.5 million units globally in the fiscal year that ended in March, lower than the some 11 million units sold by Toyota group companies.
When sales from carmakers that Toyota has a shareholding in are added, including Mazda, Subaru, and Suzuki, that number balloons to around 16.5 million units.
Japan’s Ministry of Economy, Trade, and Industry estimates that software-defined vehicle sales worldwide will reach between 35 million and 41 million units in 2030, while global revenue from robotaxi services will touch ¥80 trillion (R10 trillion) by 2035.
The opportunity this presents became apparent to Japan and its automakers at last year’s Shanghai auto show, said Takeru Ito, a director in the ministry’s mobility digital transformation office.
“We realize Japan lags behind in this field,” hence cooperating becomes crucial to survive, he said in an interview.
Last week, Honda Chief Executive Officer Toshihiro Mibe said the automaker will “naturally” collaborate with Nissan on operating systems.
It’s working on one that it plans to install in electric vehicles (EVs) in North America next year.
Toyota, meanwhile, is set to launch its own operating system, called Arene, next year. If that happens, Japan will be divided into two software-building camps.
Legacy automakers are already feeling the cost burden of developing EVs, and now with software-defined vehicles, their businesses will be “difficult to sustain if they continue their old practices,” said Nobuhito Abe, a partner and the Asia Pacific lead of automotive at Kearney.
Join the discussion