Saito: The shift towards information-intensive motor vehicles started with the control of “cruising, turning and stopping.” A typical example would be the engine’s injection control technology. This was an essential technology of the 1970s, when Toyota moved into the digital technology field. The early evolution of digital electronics intensified the dependence of vehicles on information, but this fact remained hidden under the hood. The advent of telematics and ITS brought the growing dependence on information into view in the passenger compartment, and we are now seeing all sorts of linked developments.

Kamio: The information-intensive technologies under the hood and inside the vehicle are now connecting to services on the outside for increased convenience and safety.

Saito: Yes. In the 1990s, the vision drawn up in Japan for ITS was mainly three formats for connecting road vehicles to the outside: dedicated short-range communication (DSRC), wideband wireless and vehicle-to-vehicle communications. Even today, this vision is more or less the same.

Kamio: ETC, the forerunner of DSRC, is now in full stride on Japanese roads, and wideband wireless is expanding worldwide in the form of mobile phone networks. The only part of the vision yet to take off is vehicle-to-vehicle communications.

Saito: Wideband wireless includes the use of TV and radio broadcasting waves. These are also switching to digital technologies. However, even though DSRC and similar technologies were considered from the outset of ITS, they face a fundamental problem. Users cannot be increased until the infrastructure is built, yet that infrastructure cannot be built without users to pay for it. When we move beyond the vehicle’s interior and try to connect occupants with the outside world, we are faced with the "chicken-and-the-egg" quandary of the number of users and the construction of the infrastructure. This problem must be solved to set the stage for the spread and utilization of ITS.

Elsewhere, the GPS and real-time traffic information system — Vehicle Information and Communication System (VICS) — was set up. This enabled Car Navi to avoid the problem I just mentioned. Thus, VICS is now the ITS trendsetter, seeing enormous growth over the past decade, to the extent that it's the principal force behind the shift toward information-intensive automobiles in Japan.

Kamio: When you look at the Japanese market, the spread of Car Navi is truly epoch-making, isn’t it? In 1987 the Toyota Crown was fitted with a standalone Car Navi device that displayed map and vehicle position information. Then in the 1990s the GPS Car Navi came on the scene, with VICS being used for the first time in 1994. In a mere 15 years, the amount of information drivers had at their fingertips shot up dramatically. Today, large LCDs show high-resolution digital maps and can display real-time information. And now we are about to offer telematics information. Automotive manufacturers and the semiconductor industry are keenly watching just how far Japan’s Car Navi can pursue high added value and high performance.

However, this raises an extremely interesting question in terms of the global market. Can the Japanese Car Navi become the global standard? Will it be a hit overseas, or end up as an automotive feature unique to Japan? What are your thoughts?

Saito: There are two issues here. First, the Japanese Car Navi is expensive. This might be a major stumbling block for average consumers in the United States and elsewhere. If we plan to expand overseas, we will have to reduce the price by 50 percent, at least.

The other issue is the very diverse ways in which people in different areas use and relate to their motor vehicles. In America, automobiles are necessities — like legs for getting around on a daily basis — and most owners tend to be satisfied as long as their vehicles are inexpensive and reliable. In Japan, motor cars are often viewed as important status symbols or lifestyle statements, rather than transportation essentials. By contrast, in Europe, cars are rated for their high-tech image and sales there are affected by reputations in Formula 1 races and so forth. In fact, European sales rise for a car model just because it offers a telematics option, even if that option is not installed.

Currently, Car Navi is starting to become popular in the United States and Europe, mainly for deluxe cars. The prevailing opinion in the automotive industry is that Car Navi will spread out from Japan. I think it has good prospects to steadily expand in popularity to become a mainstream car feature. Its growth rate will vary in different countries, depending on various factors.

Kamio: Looking at the European telematics products, they use the simple OnStar configuration rather than the Car Navi format we have here in Japan.

Saito: In Japan, Car Navi became popular before telematics, so it was natural that in our country telematics was enabled via Car Navi equipment.

Kamio: Here I think we need to be clear about the positioning of Japan’s Car Navi. The G-BOOK and similar services launched telematics technology in Japan beginning in 2002. Now that those services are well established, we can focus on how they can be integrated in the vehicle. Car Navi functions will be combined with the user interface and this will develop to include telematics capabilities. Then there will be an information service using the Japanese Car Navi platform. Overseas, there has been no need for a sophisticated device like the Japanese Car Navi. Instead, the OnStar format I mentioned earlier is the dominant form of telematics. Which one will dominate the field in the future?

Saito: Before that question can be addressed, we must clearly understand the fact that Japan has an extremely advanced traffic control system because our roads are very congested. Our trunk expressways and other expressways are outfitted with a huge number of roadside sensors, and the enormous task of installing them began way back in the 1970s. Now sensors are being installed along our ordinary roads. Nowhere else in the world is there a traffic information-collecting system of this magnitude. The data gathered from the pervasive network of sensors provides the basis for the information disseminated via VICS. And, as we mentioned, VICS is the key to the popularity of Car Navi in Japan because it gives drivers a lot of very useful information about traffic congestion, and does so in a timely manner.

Kamio: Certainly when I interview Car Navi users, they seem to benefit more from the VICS data display function than from the route guidance function. Also, the introduction of large color LCDs, displays that can show maps big enough to see real-time traffic congestion information, has helped raise the utility of Car Navi. Another factor that has facilitated the evolution of Car Navi — and telematics, too — is the political element. Politicians have used funds from expressway tolls, as well as road taxes and other taxes, to set up the sensor infrastructure in Japan. The more sensors there are, the more data that can be collected, and the more helpful that data can be to drivers.

Saito: The first step was collecting traffic information for highway administration. Later, that data became the output for Car Navi terminals in vehicles. I think this relationship is important. Even if we tried to apply this model to overseas countries to globalize the format, it would be impossible to do so because the cost of building the infrastructure would be prohibitively high. The circumstances for Car Navi in Japan differ vastly from those in other countries. Thus, currently the trend overseas is an evolution from telematics to Car Navi equipment that employs simple maps.

Saito: This issue isn't limited just to Japan. I think the principal factor affecting the adoption of telematics is its level of dependence on cellphone networks. In this country, our third-generation mobile phone services have largely shifted to broadband, and we are seeing more and more fixed-fee services that enable constant connections. However, when you consider the fact that the average Japanese person spends very little time in a motor vehicle, it seems to me that the connection fees are a little steep. If we are going to bring about the ubiquitous networking society that includes automobiles, we must set up the wireless infrastructure to enable affordable, constant connections for high-speed mobile communications with capabilities exceeding 10 Mbps.

Recent developments indicate that the much-fanfared fourth-generation cellphones will be viable here by about 2012, and I’m looking forward to the advent of an infrastructure that allows communications between devices other than mobile phones. There are plenty of wireless technologies to choose from, such as DSRC and WiMAX (Worldwide Interoperability for Microwave Access), but all of these will take time to gain support.

Kamio: Then we can’t expect a very rapid shift to those enhanced capabilities.

Saito: We must remember that replacement purchases of motor vehicles play a large role in the evolution of in-vehicle systems technology. Whereas mobile phones have a replacement purchase cycle of one to two years, motor vehicles are often kept for seven to ten years. Even more frequent purchasers of new cars tend to own them for around four or five years. Hence, the life cycle of automobiles is fundamentally different from the life cycle of general information devices. What’s more, automobiles are essentially all-in-one products. Thus, if Car Navi becomes standard equipment, then that system will remain installed in used cars, so it will be quite normal for it to have to provide more than 10 years of service.

Kamio: According to data announced by one of the Car Navi manufacturers, sales of pre-installed Car Navi systems in Japan in 2003 were up by 159 percent over the previous year, but sales of Car Navi products purchased separately were up by just 112 percent. Recently, more than 90 percent of the motor vehicles in our country have been sold with pre-installed Car Navi, although this figure varies by model. This clearly indicates that Car Navi is rapidly becoming a standard automobile component.

Saito: That may be true, but the trend toward pre-installed Car Navi equipment is actually extending the life cycle of Car Navi. That may not be desirable if it makes it more difficult to add and sell telematics capabilities or generally forge ahead with other advances for the information-intensive automobile. The life cycle of Car Navi will be extended because it is linked to the life cycle of the vehicle. In turn, that will extend the time it takes for products with new technologies to permeate the automotive market. Another thing: even if the communications service infrastructure is readied for Car Navi and telematics, the number of users will not rise sharply unless replacement purchases of cars speed up. I expect that it would take at least 10 years for the mass of consumers to switch from a popular communications format to a new one.

Given this situation, perhaps any future pre-installed Car Navi should be designed for introduction no sooner than five years in the future. That is a long time to wait in the electronics industry. Many things can change during that time period. One way to avoid such a delay would be to include in the initial system design sufficient CPU and memory capabilities to handle the inevitable future functional improvements and expansions, then distribute software updates over the Internet. This approach for evolving the in-vehicle system might overcome the wide disparity between the life cycles of cars and information devices.

Also, I think it will be important for the automobile industry and other industries to combine their strengths and promote the information-intensive automobile. This would boost the rate at which vehicle owners adopt and use new services.

Kamio: What directions do you see for the relationship between information-intensive automobiles and electronics such as semiconductors?

Saito: Recent advances in automobiles such as improved safety and cleaner exhausts have all been based on electronics. The latest air bags offer occupants more protection because they use microchips that can vary the way the bag deploys, depending on several factors at the instant an accident occurs. In this sense, electronics are contributing to a rapidly widening area of driver and passenger safety and convenience.

Nevertheless, automobiles remain virgin territory for the IT industry. There is almost no sign of IT businesses fighting it out for this market. Take communications technologies, for example. Automobiles have so much space and battery power that both cellphone networks and wireless LAN networks like WiMAX can coexist within a vehicle. This capability, among others, has not yet been exploited to any significant degree.

Kamio: Are there difficulties ahead for expanding the role of electronics in motor vehicles, or any other points that should be noted?

Saito: Comparing the markets for automobiles and cellphones, both have similar dissemination rates. However, before a new branch of the electronics industry can be established, we must overcome the major dilemma mentioned previously. The initial market is small and the rate of market expansion is slow because the pattern of "replacement purchase demand" translates into a long life cycle. This causes great difficulty for IT companies seeking opportunities for fast growth.

Another matter to be considered is the high priority given to stability in the automobile industry compared with the IT field. When creating hardware and software for motor vehicles, you need to have a sound understanding of the process automobile manufacturers use to develop, build and service their products. If the electronics industry gains this insight and joins forces with the automotive industry in this country, Japan could well become the world leader in information-intensive vehicles.

Kamio: Clearly, to enable information-intensive motor vehicles, it would be very beneficial if the issues raised by the differences between the cultures of the automotive and electronics industries can be overcome. Thank you very much for sharing your thoughts with us, Mr. Saito.

Interviewer: Hisashi Kamio
Communications and ITS journalist
Guest Researcher for IRI Commerce and Technology Inc.

Profile
A communications and ITS journalist, Mr. Kamio is a special reporter for the "Response" Web site. He worked as a special correspondent for IT magazines and as a communications business consultant, then became a freelance journalist in 1999, specializing in communications business and ITS. He authored “Automobile ITS Revolution” (Diamond Publishing), writes regular articles for the automobile Web site “Response” and the IT magazine “ITMedia Mobile,” and contributes articles to many business and specialist magazines. Mr. Kamio is also Guest Researcher for IRI Commerce and Technology Inc. and Technical Adviser for the New Energy and Industrial Technology Development Organization (NEDO), an incorporated administrative agency.