FURUNO ITS Journal

Articles for ITS market The Automobile industry is shifting from a manufacturing industry to a service industry.

 TOYOTA’s new model, "Prius PHV" brings connecting to “another dimension”

On February 15 Toyota released a new model, the "Prius PHV" which will be a full model change for the first time in five years. At the press conference TOYOTA emphasized the five evolutions of the "different dimensions".
The five evolutions are EV traveling, charging system enhancements, safety technology, design and power supply functions.
To explain step by step, the running in EV mode achieves 68.2 km / L which is more than twice the first Prius PHV. The lithium-ion secondary battery which can be installed has been expanded to 8.8 kwh.
With the enhancement of the charging system, it also supports rapid charge using direct current.
In safety technology, Toyota Safety Sense P is installed. It will improve the function of the collision damage mitigation braking system which is also called automatic brake. It will also automatically correct steering when approaching a lane departure situation.
Regarding the design when compared to the previous "Prius", the design of the front and rear of the car body was changed significantly, emphasizing the advanced product image.
For the power supply function, 100 V power supply can be used with a maximum output of 1500 W.

Toyota explains that these five different dimensions of evolution will be connected.
"Connected" refers to the connection between the onboard device and the cloud. It is a system that transmits information as needed to the car based on collecting and analyzing big data results. This includes sharing such data as operating condition of car, operating history, etc. with the "Toyota Smart Center".
"How to connect" between the car and the outside? There are two ways.
First by using smartphones. In this case the basic usage fee is free, with the customer being responsible for smartphone packet communication charges. The second is a dedicated in-vehicle communication device called “DCM” (Data Communication Module). In the new "Prius PHV case", it is equipped with a large 11.6 inch HMI (human machine interface). Packet communication is unlimited in the basic usage fee for 3 years, afterward the charge is 12,260 Japanese yen per year.

Today, the information and communication service TOYOTA offers to the general public is called "T Connect".
Major functions include "map on demand" by OTA (over the air) which automatically communicates navigation map information updates. "T route search" performs optimum route searching, taking into consideration information from other mobile Toyota vehicles, traffic information such as VICS (Vehicle Information and Communication System) and statistical data. "Agent" performs advanced speech recognition via an on-vehicle device or by using the cloud, "My car security" tracks vehicle theft and also provides other features.

 Discussion on overall "monetizing (billing)" plan by utilizing big data

TOYOTA has revealed that DCM would be installed in all new cars. Including gasoline-powered vehicles such as compact cars and minivans and also electric vehicles such as the "Prius PHV".
Big data will play a leading role in all future automotive business.
Nonetheless the discussion of how "big data" can be "monetized (billed)" is not just at TOYOTA. All automobile manufacturers are developing similar plans.
By constantly monitoring vehicle operations and travel all automobile manufacturers are able to respond quickly to repair an event or failure. By sharing data with insurance companies it will be possible to optimize automobile insurance. There are also many other applications possible.

On the other hand, adding the DCM hardware and associated communication cost (for first 3 years) squeezes new car profits.
In the discussion car manufactures are starting to understand the difficulty of transitioning from the current business model of automobile manufacturing and sales.
In other words, it is necessary to significantly change the structure of the automobile industry, and as a result automotive companies must reorganize many aspects of their business.

 Big data creates a new service industry within the automobile industry

So, what kind of organizational changes will be required? A shift from only manufacturing to now include service. The automobile industry has been a product-out type industry, mainly concentrating on manufacturing. In a slightly pessimistic view it was a business concentrating on "promote selling, without considering services after the sale".
Automobile manufacturers plan and manufacture new cars. Although they are sold by dealers, sharing of customer information has not normally been shared between dealers and manufacturers.
In addition dealers often have contact points with customers only during periodic inspections, vehicle inspections, etc. And so the cycle of "promote selling, without considering services after the sale continues." In a study, data shows that new car customers of one manufacturer’s dealer had reduced their dealer service/repair interval to only 10% by the eight year of ownership.

This type of situation changes greatly with the introduction of big data. This is because automobile manufacturers can now access information directly from the customer’s automobile and collect personal information such as driving behavior, type of travel, food and drink, music preference, etc.
In other words the dealer has the risk of becoming "Just a repair shop", and it is also thought that the existence of many dealers will be threatened. Therefore in promoting the utilization of big data, automobile manufacturers will inevitably need to "reconstruct the relationship" by providing new contracts to dealers. Naturally some negative feedback is expected from the dealer network.
In addition it is an opportunity for enterprises entering the core big data business including major IT companies to enter the automobile industry during this reorganization period.

Kenji Momota

Mr. Kenji Momota   Automotive journalist

His major is the world automotive industry and he is also familiar with the energy industry, IT and the aging society problem as the related fields. He acts around the world based in Japan and USA and writes for the general magazines, the technology journals and the automotive related media etc.
He is also commentator of motor race and world's motor show on TV program based on his career of the driver of Indy Racing League and NASCAR. In recent years, he has been covering about a paradigm shift from developed countries to developing countries, the motorized vehicle like EV and the telematics.

 

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