Toyota Motor Corp (ADR) (NYSE:TM) has announced plans for a new unit called Toyota Connected that will focus on product development, data science, and user experience. The unit will be built in partnership with Microsoft Corporation (NASDAQ:MSFT).
Microsoft will offer its Azure platform on which Toyota Connected will operate. This means that the five-year-old partnership between the two firms will be expanded. The Automaker has revealed that the headquarters of the new unit will be located in Plano, Texas where the firm will bring together its connectivity services to form a data science hub. Microsoft will own 5% of the venture.
Zack Hicks, the chief information officer for Toyota in North America stated that the new organization will bring more convenience into people’s lives. Some of the things that Toyota Connected will work on include improving insurance rates and coverage based on how vehicle owners drive their vehicles. It will also work on a connected vehicle network which will allow the sharing of information including weather and traffic data. Microsoft Azure will host the wireless services.
The vehicle manufacturing company will incorporate Microsoft’s cloud technology in the development of contextual, intuitive and predictive services that will make the driving experience more realistic. Toyota’s decision to use Microsoft’s services is also a plus for Microsoft because it will encourage more automotive companies to take up a similar approach with the software and tech firm. It will also enhance Microsoft’s competitive strategy against its rivals including Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL). The latter two firms have also been making an effort to have some influence in the automotive industry.
The Toyota Connected unit will also deal with service development, analytics, and data management, especially for fleet customers and dealers. It will also provide support to the company’s research in artificial intelligence, robotics and the development of autonomous vehicles. Toyota’s partnership with Microsoft began in 2011. Microsoft is also involved with other automotive companies such as BMW and Nissan Motor Company.