The global automotive industry is in the midst of a wave of automotive IoTization that began with GAFA and Tesla.

This major wave, called Software Defined Vehicle (SDV), is changing the entire automotive and auto parts industry, including not only the world’s major automakers but also Tier 1 and 2 suppliers and below. The automotive industry, which has traditionally grown around “hardware,” or manufacturing, is now shifting its focus to “software,” which is expressed in various functions, services, and related effects that users can see.

The IT industry, as well as the automotive industry, will play a central role in this shift, and IT companies in the United States, which is strong in IT, and technology-based IT companies in China, which want to catch up with the United States, are increasing their presence by proposing and implementing a wide variety of software for automobiles. The IT industry is taking the lead in this field, and the competitive map for automobiles is about to change.
In addition to its software development capabilities, the IT industry is pursuing a strategy of adding more value based on AI, which is undergoing technological innovation, and is proposing a multifunctional automobile that will change the car from being merely a means of transportation to a living space.

The SDV movement is not a new one; there was a time around 2015 when GAFA attempted to enter the automotive industry. The goal was to drive change in the automotive industry in the four areas of connected, automated driving, sharing, and electrification, then known as “CASE” from the English acronym, and to participate in the software and service areas where the IT industry has strengths and turn them into profitable businesses.
Although this movement slowed down around 2020, it has been gaining momentum since 2023 compared to the CASE era, and the IT industry, armed with SDV, is now encroaching on the automotive industry.

On the other hand, major European and U.S. automakers have been working on SDV development from an early stage, and are trying to compete with IT companies by leveraging their own software development and strength in the manufacturing field.
In response, Tier 1 and 2 suppliers are also focusing on SDV development, and the more the shift to SDV progresses, the clearer the competition will become across industry boundaries in the development and manufacturing fields.