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Toyota-SoftBank tie-up shows car industry facing drastic structural changes

Softbank Group Corp. Chairman Masayoshi Son, left, and Toyota Motor Corp. President Akio Toyoda shake hands during a press conference in Tokyo's Chiyoda Ward on Oct. 4, 2018. (Mainichi/Akihiro Ogomori)

TOKYO -- A new partnership between Toyota Motor Corp. and SoftBank Corp. to develop services using self-drive vehicles and other advanced automotive technologies highlights drastic structural changes the automobile industry is facing.

Such changes, which could fundamentally overturn the concept of cars, are symbolized by the word, "CASE," which stands for "connected, autonomous, shared and electric."

Japanese automobile manufacturers have placed priority on selling large numbers of cars. But they are being forced to change their corporate strategies as they can expect increases in their sales only in limited growing markets such as those in China and India.

Under the circumstances, Japanese car makers are speeding up their efforts to secure increased profits by diversifying their services.

"We'll transform ourselves from a company that just produces cars into one that provides all kinds of services relating to mobility," Toyota President Akio Toyoda told a news conference on Oct. 4 in announcing the tie-up.

A key to such a move is how to gather necessary data. Self-driving vehicles use numerous sensors mounted on them to detect their surrounding environment and utilize artificial intelligence to analyze gathered data. Data obtained by such vehicles can also help create new business opportunities.

Therefore, not only automakers but also information technology giants such as Google and Apple have joined the market and international collaboration between companies in different fields is rapidly increasing.

Honda Motor Co. has joined hands with General Motors Co. and Waymo, an affiliate of Google, Inc., in developing self-driving cars, while the alliance between Nissan Motor Co, Renault S.A. and Mitsubishi Motors Corp. is pursuing a tie-up with Daimler AG in this field.

If self-driving technology is developed, it will likely increase the prices of automobiles, speeding up moves toward sharing cars between multiple people.

Megumu Komikado, head of the KPMG Mobility Institute of Japan, said the trends of international collaboration between automakers and those in other fields in providing mobility services will only grow.

"As the move toward CASE is progressing, the trends of automobile manufacturers joining hands with IT firms and other companies in providing mobility services such as ride-sharing will continue," he said.

(Japanese original by Naoya Matsumoto and Ryo Miyazawa, Business News Department)

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