Business Headlines | 3 years ago

Toyota Motor Corp (ADR) (NYSE:TM) And Ford Motor Company (NYSE:F) Form Consortium In A Fight Against Tech Giants

Toyota Motor Corp (ADR) (NYSE:TM) and Ford Motor Company (NYSE:F) have joined hands with four other car makers to form a consortium that will speed up development of the standards for apps used in vehicles. The two auto manufacturing giants are also collaborating with medium-sized carmakers under the SmartDeviceLink consortium. This was announced in a joint statement.

Honda bows out

Also joining the consortium will be several suppliers to vehicle manufacturers. It had also been anticipated that Honda Motor Co Ltd (ADR) (NYSE:HMC) would be part of the consortium but the statement made no reference to the Japanese car and motorcycle maker. As a non-profit, the consortium will be charged with promoting a variety of choices with respect to how smartphones connect to technologies built into vehicles such as voice recognition and dashboard displays.

Analysts have interpreted the move as a defense ploy against the forays tech giants such as Alphabet Inc (NASDAQ:GOOGL) and Apple Inc. (NASDAQ:AAPL) are making in the auto industry with regards to how vehicle owners connect their smart mobile devices to their cars and trucks. The worry for the vehicle manufacturers is that if the two offerings from the Silicon Valley titans become ubiquitous in cars, Apple and Google’s influence over the auto industry will become too great.

CarPlay and Android Auto

Currently, Toyota has resisted making Android Auto from Google and CarPlay from Apple available in its cars on the basis that doing so would comprise the security and safety of drivers. Ford, on the other hand, has both CarPlay and Android Auto available in all the models set to be released in 2017. The Detroit-based carmaker is, however, determined to have a software platform that is open-source so that all developers of apps can use that in place of the offerings from Apple or Alphabet.

The Ford-Toyota consortium is, however, not the first in the auto industry. Some vehicle manufacturers are also partnering with not just other automakers but also technology companies. Peugeot SA (ADR) (OTCMKTS:PEUGY), for instance, is in a partnership with a mobile carrier and a manufacturer of communications equipment with a view to using the 5G wireless protocol to improve and enhance road safety and autonomous driving systems.

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