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Business Trends

Toyota's 'connected' Corolla and Crown signal shift to mobility

Automaker envisions collecting and selling data as part of transformation

Toyota President Akio Toyoda introduces the "connected" Crown sedan and Corolla compact. The automaker chose two of its signature models to symbolize the company's push toward a broad array of mobility services. (Photo by Keiichiro Sato)

TOKYO -- The latest Crown luxury sedan and Corolla compact released Tuesday highlight Toyota Motor's grand strategy of morphing into a comprehensive mobility service company as technological advances reshape the auto industry.

The Japanese automaker held a "connected day" event at a Tokyo showroom to debut the two vehicles, with more than 100 invited guests. President Akio Toyoda made a rare appearance at such an occasion, looking to explain the automaker's connected-car strategy as it requires heavy upfront investment.

Toyota plans to include on-board communication equipment as standard for almost all new vehicles sold in Japan and the U.S. by 2020. The automaker picked the Crown, the first sedan it produced back in 1955, and the best-selling model Corolla as the first to employ the connected-car technologies in order to emphasize the company's long-term business shift ahead. The latest Corolla is a sport hatchback with advanced communication features.

"We will redesign ourselves, from an automaker to a mobility company that provides various services related to mobility around the world," Toyoda said.

Toyota envisions automobiles becoming somewhat like a moving smartphone -- alerting riders of a malfunction in advance, driving themselves and thus affording riders an opportunity to enjoy entertainment in the car.

The vehicles connected to the outside network respond to voice commands using artificial intelligence and offer remote monitoring of safety. Users can register destinations using the Line message app. In case of an accident, the car contacts the fire department and other authorities automatically. The Crown sedan comes with a feature to lower insurance premiums based on driving records.

The connected-car market is estimated to triple by 2022, reaching roughly $154 billion, as the auto industry undergoes an upheaval much like those seen in the personal computer and mobile phone industries over the past decades. Competition involving information technology companies is heating up in data-based services as well.

General Motors and BMW have increased sales of connected cars, while Google and Apple focus on linking smartphones to autos in order to make various mobile app features available in vehicles. Sweden's Volvo Cars works with Google on connected-car technologies, and Chinese e-commerce company Alibaba Group Holding teams with Ford Motor in the same area.

Toyota positions the new Crown and Corolla as channels to collect users' data -- a foundation for various mobility services. The automaker, which formed a U.S. venture with Microsoft in 2016 to collect and manage data, seeks to create its own data platform by tapping the group's annual sales of 10 million vehicles and offer anonymized big data to other companies that provide insurance, taxi and sharing services.

The Crown and Corolla debut also represented an opportunity to court startup partnerships, a Toyota executive said.

Toyota last year found five partners as it solicited startups to collaborate on connected-car services. The company also has invested $1 billion in Southeast Asian ride-hailer Grab, in which Japanese company SoftBank Group has a stake.

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