Toyota Is Becoming a Software Company

Toyota announced the creation of a new holding company that will oversee its software development initiatives this week. While our default response is to gripe about the nebulous concept of “mobility companies” and the industry’s obnoxious emphasis on shifting data, we also understand that it pays to have someone on hand who knows their way around a line of code.

It wasn’t all that long go that Volkswagen was bragging about taking software seriously, only to be publicly shamed by the media when bunk programming screwed up the launch of numerous physical products. The cynical side of the brain knows this could have been avoided by ignoring unnecessary connectivity features and a potentially ill-conceived attempt to digitize the entire cabin.

We’re sympathetic to the nature of competition and the appeal “newness” has on customers. The automotive industry has seen the sea of riches amassed by tech companies harvesting data and knows which way the wind is blowing. No brand wants to be seen as technologically inferior, even if many of the newer features in modern cars aren’t really in service of anything other than marketing. Yet the “software first” mentality that has started presiding over vehicle development seems somewhat counterproductive, and Toyota may have just bought into it hook, line and sinker.

Then again, maybe it’s a great play and we’re just not seeing the big picture. So let’s dive in and see what we find.

Toyota Research Institute — Advanced Development, Inc. (TRI-AD) announced Tuesday that it will expand into a holding company divided into two operating companies. Effective January of 2021, a new entity called Woven Planet Holdings will split into Woven Core — focused on developing automated driving — and Woven Alpha — which will revolve around vehicular connectivity, navigation, and in-car applications. Likely to be the bigger money maker, at least in the short term, Alpha will also serve as the place where Toyota can test and build upon new concepts that might open the door to new sources of revenue.

It’s also tasked with handling Woven City, Toyota’s concept town that merges basically every green/connected idea you’ve ever heard of at the base of Mount Fuji. That includes “mobility as a service” in lieu of traditional vehicle ownership, smart-home devices connected to the local infrastructure, artificial intelligence wherever possible, and sustainability projects using hydrogen power.

TRI-AD CEO James Kuffner will continue leading all three companies from the institute’s home office in Tokyo. He was added to Toyota’s management board last month to showcase how serious the brand was about breaking new technological ground and evolving the company. Kuffner spoke with Automotive News in June to explain TRI-AD’s growing role at Toyota and how important software would be moving ahead.

From AN:

“Toyota has a long history of building an excellent, reliable products and hardware, but building software is something that is a new capability for many traditional automakers,” Kuffner said.

“My mission is really to create a strong software center of excellence within the Toyota group at Toyota Research Institute — Advanced Development and, working with our other partners, and create products that have both good hardware and good software together,” he said. Toyota said one goal is to create a more agile “software-first” development process for cars.

Toyota’s push to strengthen its software firepower comes as rivals make similar moves in an attempt to streamline the complicated computer systems that run their cars and have them interact more seamlessly with the vehicles’ mechanical and electronic architectures.

Volkswagen Group, for instance, said all its new models will run on a new vw.os operating system by 2025 and last year unified its fragmented information technology units into a $8 billion subsidiary called Car.Software that is tasked with developing such computer systems in-house.

We could consider some of the issues VW now faces as growing pains and hope that Toyota doesn’t find itself in a similar boat, despite intentionally walking a very familiar path. Officially, Woven is basically a rejiggering of TRI-AD with more room for investors to climb aboard various projects as they emerge. However, its overall goal remains the same — build up Toyota’s software in order to influence future hardware.

“Reorganized under the name ‘Woven,’ TRI-AD will endeavor to become the type of organization that will allow those involved to step on the accelerator in helping realize a future where people can be more happy,” Akio Toyoda, president of Toyota Motor Corporation, explained in a statement. “To make it more open and collaborative, the one thing that will purposefully be missing from these 3 new companies, Woven Planet, Woven CORE, and Woven Alpha is the ‘Toyota’ branding.”

“Regardless, these companies will clear the path for the future of Toyota, as they carry on the legacy of ‘for the happiness of others’ that Toyota has so carefully woven into its own DNA,” he concluded.

Among some of the projects outsiders can glom onto is Arene — a new automotive operating system that will allow for “programmable cars” Toyota would like to see shared throughout the industry. It’s supposed to be easily adaptable for various automotive applications, launch synced to its own cloud, and capable of frequent updates that will (hopefully) stop it from becoming stodgy and dated as the years roll on. It’s basically trying to become the macOS or Windows 10 of automotive software, but it’s still in its infancy — and this will have to be embraced by the industry at large for Toyota to achieve its ultimate goal.

[Image: Toyota]