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Sony President and CEO Kazuo Hirai talks about the use of Sony imaging sensors in autonomous driving applications at the CES electronics show Jan. 8 in Las Vegas.   © Reuters
Business trends

CES electronics expo blurs lines between auto and tech

Sony stuns with first car sensor while Toyota unveils mobile restaurant

HISASHI IWATO and MASAAKI KUDO, Nikkei staff writers | South Korea

LAS VEGAS, U.S. -- The CES electronics show, the largest of its kind on the planet, is shaping up as a venue wedding big-name automakers with high-technology companies looking to capitalize on a rapidly transforming industry.

Sony and Panasonic's new frontiers

Before the expo opened to the public here Tuesday, Sony shocked industry rivals with the revelation that it will feature its first sensor designed for vehicles. Just last year, the Japanese technology group focused strictly on organic light-emitting diode televisions and other household electronics.

"Image sensors have more visual capabilities than human eyes," Sony President and CEO Kazuo Hirai said Monday. "We believe that Sony's image sensors will contribute to the evolution of vehicle transportation."

Sony has established tie-ups with Japanese auto giants Toyota Motor and Nissan Motor, looking to commercialize the sensor, Hirai revealed. That builds upon the partnerships already forged with auto components suppliers Denso of Japan and Robert Bosch in Germany.

When it comes to smartphone image sensors, Sony sits atop the global heap. The company's sensors can take 360-degree footage even in the dark or when there is a glare, a strength Sony will apply to ensuring dependable autonomous driving.

Sony faces an increasingly commoditized home electronics market, which is a boon to Chinese and South Korean rivals and their low-cost products. Self-driving vehicles offer the Japanese group a unique chance to diversify its profile.

Since switching to a business strategy not driven by volume, Sony now projects a record operating profit for the full year ending in March -- a feat two decades in the making. Semiconductors have led those earnings, but competitors in that segment are catching up fast, driving Sony toward the auto industry as the next growth sector.

Panasonic, which bled red ink in fiscal 2011 and fiscal 2012 due to the slumping TV market, has committed to a similar growth strategy. The Japanese manufacturer positions automobiles and their progressing electrification as an indispensable market.

The weapon of choice will be lithium-ion batteries for passenger vehicles, an area Panasonic leads with a roughly 40% global share. The company will also promote the spreading of electric cars by creating a platform for development of compact electric vehicles that can be used by combining core systems.

For self-driving cars to become marketable, they must be proficient in finding their way on the open road, and their interior must contain the trappings of home. Since housing construction is part of Panasonic's portfolio along with home electronics, the company sees itself positioned to deliver on interior convenience and comfort -- especially if the boundaries between home and the workplace vanish.

Mobile businesses in a $10 trillion industry

On Monday, Toyota President Akio Toyoda unveiled the e-Palette, a box-shaped electric vehicle ranging from 4 meters to 7 meters long that can be used as a shop, hotel room or even a mini-restaurant.

"The automobile industry is clearly amidst its most dramatic period of change as technologies like electrification, connected and automated driving are making significant progress," Toyoda said.

Toyota shows off a self-driving electric concept vehicle for the services industry at the CES trade show in Las Vegas on Jan. 8.

South Korea's Hyundai Motor said it is teaming with Silicon Valley tech company Aurora to bring self-driving Hyundai vehicles to market by 2021. The partners will start by focusing on development of hardware and software for automated and autonomous driving. They also will work on back-end services required for Level 4 self-driving cars, which is one step below fully autonomous vehicles.

"Combining our advanced vehicle technology that embeds the latest safety features with Aurora's leading suite of Level 4 autonomous technology will advance this revolution in mobility with Hyundai in a leadership position," Yang Woong-chul, vice chairman of Hyundai, told reporters Monday.

"Aurora is excited to partner with Hyundai Motor to make the social benefits of self-driving available globally," Aurora CEO Chris Urmson said.

The Nexo, Hyundai's next-generation fuel cell vehicle, will be the first model used in testing this year.

U.S. chipmaker Nvidia announced a line of high-speed processors that will power various artificial intelligence applications, such as Volkswagen's electric vehicle and Uber Technology's ride-hailing fleet. Nvidia also revealed that it is working with more than 320 companies on autonomous vehicles, positioning itself as a key supplier of systems at the heart of next-generation autos.

The ground mobility industry "represents $10 trillion, the single largest and most impactful ... industry on the planet," CEO Jensen Huang said. "We now have an opportunity to revolutionize it."

Paradigm shift

Major automakers have traditionally competed on driving performance, fuel efficiency and cost of their various models with full redesigns every five years. But now, rapid realignment is taking place involving new technologies that could determine the value of autos in the future, such as AI and autonomous driving. The industry is entering the era of "CASE" -- connected, autonomous, shared and electric -- vehicles.

Heads of major automakers are unanimous in calling this moment a once-in-a-century revolutionary period. With no clear winners in view, they are freely engaging in trial-and-error development.

This cast also faces a new world where 54% of the population lived in urban areas in 2016, World Bank data shows. The United Nations estimates the ratio will climb to 66-67% in 2050. Many of these individuals owning vehicles will contribute to increased traffic congestion and pollution, while local governments will be forced to spend a king's ransom on rail lines, bus routes and extra parking spaces.

This problem may find a solution in the rise of the shared mobility-as-a-service market, or MaaS, which offers a comprehensive alternative to private car ownership. Demand in that area will climb to $1.5 trillion by 2030 in the U.S., Europe and China alone, PricewaterhouseCoopers Consulting estimates. The market is expected to grow by 24% a year.

Nikkei staff writers Kim Jaewon and Toyoki Nakanishi in Las Vegas contributed to this story.

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