January 12, 2017 1:30 pm JST

Technology stars expand links with auto industry

Such collaborations seen as crucial to building next-generation cars

Honda Motor now looks beyond its strength in mechanical engineering for developing new cars.

LAS VEGAS, U.S. -- Automakers must collaborate with others to develop the increasingly complex vehicles needed for the future, and many promising technology companies are eager to capture opportunities in the 200 trillion yen ($1.72 trillion) auto industry.

That message of cooperation was one lesson offered here at the 2017 International Consumer Electronics Show, which ended Sunday.

No one can do it all

"It is becoming impossible for any company to develop broad arrays of technologies all on its own," Yoshiyuki Matsumoto, Honda Motor's research and development chief, asserted Thursday at the show. "Because of this, we will actively seek strategic collaboration."

Matsumoto, who shined as an R&D engineer at Honda, oversaw the development of the widely popular first-generation Fit compact. He has been particularly passionate about creating technologies in-house. But as software and services grow increasingly important in automobile development, Matsumoto has realized that Honda cannot continue relying solely on the company's strength in mechanical engineering.

Matsumoto visited Silicon Valley last summer to meet secretly with Google's autonomous-driving project chief John Krafcik, now the CEO of recently spun off Waymo. The two traded views and test-rode a Toyota Motor Lexus vehicle modified with self-driving features. An impressed Matsumoto lauded the level of accomplishment. About four months later, Honda and Google agreed to pursue collaboration in autonomous-driving research.

As Honda negotiated with Google around autumn, rival Toyota sent officials to group companies Denso, Aisin Seiki and Toyota Industries. With Toyota seeking cooperation to accelerate work on electric vehicles, the group members sent one midlevel staffer each to participate in the EV planning department created last month.

"Toyota used to lead development, but from now on parts companies will collaborate from the initial stages," said Senior Managing Officer Toshiyuki Mizushima, who hailed from Aisin Seiki. He now oversees development and production of engines and other parts at Toyota.

The leading Japanese automaker demonstrated its eagerness to boost collaboration during a November meeting of group company managers, as President Akio Toyoda told participants: "We who gathered here are comrades from old times, and it won't change going forward."

Rising stars

At the consumer electronics show on the morning of Jan. 4, Mobileye Chairman Amnon Shashua was showered with camera flashes as the company announced plans to conduct public-road testing of fully automated automobiles this year with Germany's BMW and Intel of the U.S. The Israeli provider of advanced drive-assist systems will contribute image processing and other expertise.

Shashua, an example of technology entrepreneurs seizing new demand in the auto market, called on other companies to collaborate, too. He is drawing many interested automakers, having cultivated his company over two decades into one boasting market capitalization topping $8 billion.

Quanergy Systems aims to be the Mobileye of LIDAR -- light detection and ranging, CEO Louay Eldada said in between attending to visitors at the company booth. Quanergy, founded in 2012, set up an exhibition near automakers.

LIDAR, which detects surrounding objects using lasers, is an essential technology for autonomous driving. Sizing, costs and other challenges abound, but Quanergy is nearing solutions by minimizing movable parts.

Eldada has been an entrepreneur who created and sold off numerous companies in fields such as optical fiber communications. Seemingly an outsider to the auto industry, he was drawn to the size of the market.

Civil Maps, which provides 3-D maps, was among the many Silicon Valley startups that gathered to crack open the seemingly closed networks of group companies within the auto industry. Portable Head-Up Display provider Navdy is another example.

In the information technology industry, IBM's vertical integration model offering everything from processors to operating systems fell apart as personal computers replaced mainframe computers as mainstay products. And companies strong in specific products and services -- like Intel and Microsoft -- have gained steam, creating an ecosystem of horizontal specializations.

Seasoned auto analyst Takaki Nakanishi says automakers may walk the same path, even though changes may be less revolutionary than in IT.

Honda Motor Co., Ltd.

Japan

Market(Ticker): TKS(7267)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 56,401.05M
Shares: 1,811.42M

Toyota Motor Corp.

Japan

Market(Ticker): TKS(7203)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 186,058.67M
Shares: 3,262.99M

DENSO Corp.

Japan

Market(Ticker): TKS(6902)
Sector:
Industry:
Producer Manufacturing
Auto Parts: OEM
Market cap(USD): 35,397.17M
Shares: 794.06M

Aisin Seiki Co., Ltd.

Japan

Market(Ticker): TKS(7259)
Sector:
Industry:
Producer Manufacturing
Auto Parts: OEM
Market cap(USD): 14,609.79M
Shares: 294.67M

Toyota Industries Corp.

Japan

Market(Ticker): TKS(6201)
Sector:
Industry:
Producer Manufacturing
Auto Parts: OEM
Market cap(USD): 15,835.95M
Shares: 325.84M

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