Mitsubishi Motors enlists Israel startup as Japan plays catch up on connected cars

[TOKYO] Mitsubishi Motors Corp has signed on to Israeli startup Otonomo's car-data marketplace as Japanese carmakers race to make up ground on US and European rivals to provide in-vehicle connected services.

The first Japanese car manufacturer to join a platform like Otonomo's, Mitsubishi Motors will get access to a network of some 100 retailers, insurers and others who will pay for the data and provide revenue-generating services such as parking apps, on-demand car washing and subscription-based refueling.

The initiative will roll out this year in the US and Europe, with Japan following later, the companies said. They did not disclose the financial terms of the deal.

The Japanese have lagged in providing connected-car services, with just 30 per cent of vehicles sold last year equipped with embedded connectivity, compared with more than half in the US and Europe, according to consultancy SBD Automotive.

It could be a costly missed opportunity. McKinsey & Co predicts the market for in-vehicle data will swell to as much as US$750 billion by 2030.

In addition, the Japanese brands risk losing touch with an increasingly connected consumer globally.

"It is about understanding customer behaviours: how they use their cars and how they maintain them," said Mo Al-Bodour, a Detroit-based analyst at SBD.

"This has implications that range from current customer relationships to how future products should be designed."

Other Japanese manufacturers have so far focused on building their own platforms.

Toyota has a subscription-based service called T-Connect, which offers things like real-time traffic information and links to a human operator for help with restaurant booking or getting assistance in the event of an accident.

Honda has developed a similar offering called Honda Connected, but it has partnered Alibaba in China to develop connected services specific to that market.

What Otonomo offers is a way to scrub and standardise the data coming out of the vehicles and ensure its use conforms to the privacy laws of each region.

The four-year-old, Tel Aviv-based startup also has partnerships with Daimler and BMW. It expects to announce more tie-ups with carmakers later this year, co-founder and CEO Ben Volkow said.

REUTERS