Race of car technology: Japan is behind the US and Europe

For various reasons, Japanese automakers are lagging behind big American and European automakers in the race of car technology.

Unlike the United States and European countries, the technology of connecting cars directly is not popular with Japanese consumers. According to SBD Automotive statistics, only 10% of traffic is on Japanese roads that incorporate this feature. This is an impressive figure compared to 49% in the US, 31% in Europe and 20% in China. 


In the context of growing demand for car connectivity, Japan's "big bosses" are at a disadvantage, even in the domestic market, where they have a large market share. Meanwhile, competitors are increasingly promoting this feature, even General Motors considers this as a source of their own revenue. Because in China, the US and European countries, consumers are very interested in shopping,  they can pay quickly in the car right. 


Instead of choosing the services integrated on the dashboard, the Japanese prefer to connect the smartphone to the car system, such as online music. This mechanism requires data to be passed on to smartphone service providers, typically Apple or Google. That will take away the great opportunity for independent car manufacturers to develop in this area. According to McKinsey & Co. estimates, direct car services could create a market worth $ 750 billion by 2030. 

SBD Automotive predicts that two-thirds of all cars in the US and Europe will use direct connections by 2020. Meanwhile, the rate in the Japanese market is less than  one third, according to analysts' estimates. 


In the connection service, GM was the pioneer of the OnStar system on the Cadillac in 1996. Originally used for emergency and vehicle safety, OnStar today brings users to the service that the user can book a table at a restaurant and offer discounted rates at nearby gas stations, all through an integrated dashboard. GM didn’t disclose financial results from the offer. However, this feature has brought a large revenue to the US car group for a long time. 


Under the new EU law, eCall is expected to be available in Europe starting in April. In the event of a serious accident, eCall will immediately notify the emergency center, in case the driver is not able to make the call. In Japan, there is no urgent need from the government to equip similar emergency systems. Domestic automakers have failed to attract customers, according to Matsushara in an interview with IHS Markit. 


Toyota has started the race with T-Connect service, providing drivers with current traffic conditions, and helping them book the restaurant quickly in their vehicle. However, this service has not yet satisfied most customers. In 2016, Toyota "shook hands" with Microsoft in developing a car- connecting service, aiming for 70% of its vehicles equipped with the technology by 2020. Nissan is planning to provide smart connectivity for Nissan, Infinity and Datsun vehicles for sale in key markets by 2022. About Honda, the company has not yet announced specific targets, but there have been certain moves when cooperating with SoftBank to develop new connectivity technology. 

By: Scarlet Johnson

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