Japan Missing the Connectivity-Defined Car24 Aug 2023 15:31
Toyota's struggles to come to terms with the emerging electrification of motor vehicles globally contributed to the company's appointment of a new CEO earlier this year. The move highlighted a broader concern impacting all Japan-based auto makers - the ongoing struggle to come to terms with electrification, connectivity, and autonomous vehicle technology.
The connectivity deficit is particularly worrisome as 5G sees steady adoption throughout the world. The wireless industry is asking auto makers to step up to 5G value propositions even though many of these auto makers have been unable to convince their customers to pay.
The disconnect in the auto industry has become so bad that last year General Motors simply started charging $1,500 up front for three years of premium OnStar connectivity on many of its new cars. In fact, GM, like Mercedes and Volkswagen, is shifting its strategy to a connectivity-defined value proposition in its cars - eschewing smartphone projection solutions such as Apple's Carplay and Alphabet's Android Auto.
Of course, for GM, connectivity also defines its Super Cruise semi-autonomous driving system.
For Toyota, Honda, and Nissan, though, it is as if they failed to book a ticket on an automotive technology cruise ship that is leaving the harbor without them. Toyota is, by far, the most prominent of the three with its world leading vehicle sales volumes. In spite of that outward success, the company continues to fail to define a coherent strategy for connectivity generally and, now, for 5G adoption (beyond China).
Last year, contrary to GM's plans, Toyota announced that buyers of new Toyota's would be given 10 free years of access to connectivity. The announcement, while ambitious, was a capitulation to the reality that the company was unable to create a value proposition sufficiently interesting to consumers to attract paying customers.
Toyota is not alone in its struggle with connectivity. Many other auto makers face this same challenge including the likes of Honda, Nissan, and Volkswagen, among others.
Of course, overcoming this challenge is essential to competing effectively in a market dominated by the "software-defined car" mantra. A software-defined car is dependent upon wireless connectivity for software updates and a range of customer relationship management propositions including service scheduling, diagnostics, and contextual driving alerts and map updates.
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