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Government aims for 30% global market share of Japanese next-generation vehicles; Collaboration between companies, cooperation key


The Yomiuri Shimbun
The government’s digitalization strategy for the automotive sector

The government will aim to increase Japanese automakers’ global market share in software-defined vehicles (SDV) to 30% by 2030, according to a draft strategy for digitalization of the auto industry that the government will soon release.

The government will help domestic automakers grow and encourage them to collaborate and collaborate beyond corporate boundaries, with the aim of increasing the competitiveness of the auto industry, the bread and butter of Japan’s economy, while Chinese and American companies are taking the lead in the digitalization of vehicles.

The Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism will announce the strategy today. It will be the first time that the government has set a sales share target for the auto sector.

With the rise of companies in China and other countries in mind, the strategy warns of increasing competition globally in the auto industry, where Japan has long excelled. “Japanese automakers are encouraged to collaborate and collaborate with each other, beyond competition,” the strategy says, citing three specific areas of cooperation and collaboration: (1) software development, (2) self-driving services and (3 ) use of data. .

An SDV is a vehicle equipped with communications functions and can be updated via an Internet connection, adding new features and improving performance. The definition of SDV varies depending on the automaker, but the strategy defines them as vehicles with updatable control systems, including driving.

The strategy estimates that 41 million SDVs will be in use worldwide by 2030 and aims to have 12 million Japanese SDVs on the road worldwide by the same year.

The strategy expects 64 million SDVs to be sold worldwide by 2035 and aims to keep the combined share of Japanese automakers at 30%.

Currently, Japanese automakers collectively have a 30% share of the global auto market, including gasoline vehicles, while their market share in electric vehicles (EVs) is reportedly only a few percentage points. Since the majority of SDVs will be electric-powered, the strategy also aims to increase production of hybrid SDVs, as hybrid vehicles are a specialty of Japanese automakers.

Collaboration in software development is the key to realizing the strategy. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. consider entering into a partnership in fiscal year 2025 to standardize the base platform, which serves as a link between the software and the systems. By updating the strategy, parts and software from different car manufacturers can be installed in companies, leading to greater development efficiency. These companies will also accelerate the joint development of advanced automotive semiconductors and other products.

As for self-driving services, the government is considering setting up a new joint company to operate self-driving trucks. The measure aims to tackle the so-called ‘2024 logistics problem’, which refers to an expected shortage of truck drivers – assuming the new company’s self-driving vehicles will be used for transport between major trade hubs. The government plans to use a dedicated self-driving lane on parts of the Shin-Tomei Expressway in the 2024 budget year.

To promote the use of data between companies, the government will establish a system for sharing data on the production, use and disposal of cars in the 2025 financial year. The government also plans to share information on disaster-hit areas and supply chains of semiconductors and other auto parts. The strategy also includes a plan to create a new organization to nurture cutting-edge talent, initiated by the Ministry of Economy.

The automotive industry’s shipping value, including parts, is 70 trillion yen per year, accounting for 20% of Japan’s total manufacturing shipments. The industry is said to generate a trade surplus of ¥15 trillion annually and has created about 5.5 million jobs.

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