Digital is disrupting the auto industry on multiple fronts. Smart factories are upending manufacturing processes, ecommerce is changing the way cars are sold, ride sharing is inspiring new business models and emerging automotive technologies such as electrification and autonomy are making their way into mass produced vehicles.
To survive in this new era, incumbents in the auto industry are reconsidering who their competitors are and who they should partner with.
Speaking at Hitachi Next in San Diego today, Jayadev Gopinath, GM advanced technology and data analytics Toyota Motor North America, outlined the changing competitive and partner landscape from the Japanese auto giant’s perspective.
“Typically Toyota competed with other auto makers, but today we compete not just with them but also with technology companies such as Google and Apple,” Gopinath said.
“It seems that the technology companies want to become auto companies and the auto companies want to become technology companies.”
The challenge for incumbents is adapting to the pace of change, Gopinath said.
“The pace of innovation in a technology company is very different from an auto company. Therefore for us to be competitive we need to partner and co-create… so we can innovate and succeed.”
For its part, Toyota has chosen to partner with Uber, investing $500 million in the company last month. As part of the partnership to advance the autonomous transportation, technology from both companies will be integrated into purpose-built Toyota vehicles to be deployed on Uber’s ride-sharing network.
“Our investment in Uber is to co-create and partner to bring that [autonomous driving] to market much sooner. We believe that while a fully autonomous vehicle may be some way off, some of the technology we are developing will start appearing in cars today,” Gopinath explained.
The investment in Uber and research into autonomous driving is part of a wider strategic plan. Gopinath said Toyota is on the cusp of a major transformation from auto company to mobility company.
“We are talking about bringing mobility to consumers and wheels are optional,” he said.
In a similar vein, executives from Ford have noted they are preparing for a future where its business isn’t solely reliant on selling cars. Instead car makers are keen to capitalise on new business models underpinned by technological-driven disruption.
For example Toyota Connected is a division exploring new business models, such as its Hui car sharing program which launched in in Hawaii this year. Toyota is also examining how the data collected from its connected cars can provide more value to consumers such as improving the quality of vehicles or predicting when a car needs to be serviced.
In sales and marketing, as well as manufacturing, the company is becoming trying to become more data-driven, Gopinath said.
Gopinath was speaking at Hitachi Next, the annual user conference for Hitachi Vantara. The two Japanese companies have a long history of working together, including the past 20 years in North America.
More recently Toyota selected Hitachi Vantara to build its industrial IoT platform and ecosystem for its manufacturing plants.
Gopinath said Toyota considered more than 17 partners and vendors before deciding on Hitachi.
“Industrial IoT is an emerging space, there are many, many vendors and partners and players in that space,” Gopinath explained.
“We have software and IT companies who are playing in that space. We have OT (operational technology) companies and we have system integrators. All have their points of strength and what they are trying to do is expand from that point of strength to provide end-to-end industrial IoT capabilities.”
Gopinath said selected Hitachi based on its combined capabilities in IT and software, operational technology and examples of solving similar problems with other companies.