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Latest opportunities in Japan’s CASE industry

Latest opportunities in Japan’s CASE industry

In the year 2000, a Swiss foundation launched an international campaign to select the New Seven Wonders of the World amongst existing monuments - each a technological feat for its time. The winners were the Pyramids of Giza, the Great Wall of China, Chichen Itza, Petra, Machu Pichu, Christ the Redeemer, the Colosseum and the Taj Mahal.

Compared with these ancient monuments, today’s technological achievements connect the world and are practically weightless. Toyota’s Woven City stands as a great example - an innovation revolution and a cultural icon of the 21st century. It also presents huge opportunities for international tech firms to get involved.

The birth of Woven City

On 6 January 2020, at CES in Las Vegas, Toyota announced its plans for a prototype ‘city’ of the future - on a 175-acre site at the base of Mount Fuji - slated for completion in 2024.

The city’s purpose is to provide researchers and residents with an ecosystem to develop and test the next generation of technologies - including autonomous vehicles, personal mobility, robotics and AI - and to accelerate their time to market.

To meet these goals, Toyota has opened its doors to international partnerships – especially for CASE (Connected, Autonomous, Shared, and Electric) automotive technologies. And, as of this June, Toyota had received nearly 5,000 applications from companies and individuals seeking to get involved.

But Toyota’s Woven City is just one example of Japan’s insatiable consumption for CASE technologies.

Japanese automakers and their robust ecosystem of tier-1 suppliers continue to innovate. And Japan’s Ministry of Land, Infrastructure, Transport & Tourism (MLIT) has amended laws to promote new CASE technologies.

Furthermore, the Japanese government continues to promote foreign partnerships and investments to accelerate innovation, most notably through a framework announced earlier this year supporting cooperation between mid-size companies in rural Japan and foreign startups.

Let’s look more closely at the opportunities in Japan for western startups in the four CASE fields.

1. Connected cars

Many technologies play a vital role in connecting cars, and Japan is investing heavily. One of the most common is V2X, the system that links vehicles with other vehicles, infrastructure and pedestrians.

NEC has opened a mobility test center in Gotemba in central Japan to develop V2X innovations including private 5G and camera-AI to accelerate autonomous driving and intelligent transportation systems. The center will promote the use of 5G-connected traffic lights and pedestrian crossings, 5G-connected edge terminals and C-V2X roadside units.

NEC General Manager, Yuji Onoda, explained: “NEC aims to contribute to the creation of safe, secure and people-friendly cities by utilizing this NEC Mobility Center as a place for co-creation with partner companies.” This has included investment in startups such as SkyDrive (flying cars) and Halio (AV AI processor), among others.

And it’s not just NEC. There is a robust ecosystem of Japanese OEMs and tiers eager to implement V2X technologies. Nissan is aiming for 100% connectivity for all new cars sold next year, while Toyota, Mazda, Suzuki and Subaru are all co-developing specs for next-gen communication devices.

But with increased connectivity comes growing cybersecurity threats. This is why Toyota, Nissan, Denso, Panasonic and others have joined forces to protect cars from cyberattack.

And, in addition to cybersecurity risks, Japan is concerned about data privacy, presenting opportunities for companies that specialize in this field as well.

2. Autonomous vehicles

Within CASE, the public tends to be most excited about autonomous vehicles. Just about every OEM and tier-1 in Japan - as elsewhere around the world - is investing in technologies that enable next-generation AVs.

Japan is eager to be the global leader in autonomous technologies and is making major investments both in the public sector (for example, Sakai City is working with Softbank subsidiary BOLDLY), and the private sector, most notably with Woven City’s purchase of Lyft’s Level 5 Autonomous division.

In April 2020, Japan amended road and traffic regulations to allow on-road Level 3 autonomous driving, and there have been trials of autonomous buses on rural roads since 2017. Japan has also implemented a Road to L4 initiative to get L4+ services operational as quickly as possible. This is part of a JPY 6 billion (US$55 million) government fund for developing autonomous-driving services across the country.

Japan ranked 11th in KPMG’s 2020 Autonomous Vehicles Readiness Index, and that position is only likely to rise with the 2021 launch of Honda’s new model Legend, the first mass production L3 autonomous vehicle, alongside Toyota and Nissan targeting their own L3 mass production vehicles by 2022.

Japan is eager to get next-generation AVs on the road and to work with best-in-class international sensor, perception, and other AV technologies to make this happen quickly and safely.

3. Shared mobility

A quarter of Japan's population (and rising) is classed as elderly (65+) and less likely to drive or own a car. This means ride-hailing and autonomous buses are set to increase dramatically in the coming years.

Masashi Suehiro, Japan Head of Singapore-based smart mobility firm Swat Mobility, says: “Japan is facing issues in transportation due to a declining birth rate and an aging population. Local bus companies face operational losses due to low ridership, which eventually led to many of them halting operations altogether.”

Swat Mobility has seen this market opportunity in areas outside of Osaka and Tokyo and is offering high-precision route optimization to enable the pooling of passengers in large vehicles. The company has already secured four clients and investment from Global Brain.

Of course, shared mobility comes in many forms: micromobility, commute-based/ridesharing (carpooling, vanpooling), automobile-based (carsharing, rides on-demand, micro-transit), and public transit.

According to Japan’s MLIT, there are four important goals to be achieved through MaaS (Mobility as a Service):

1. To improve transportation and enhance mobility in rural areas and tourism spots

2. To use current public transportation systems effectively to address a shrinking population and hence declining demand

3. To increase opportunities for people to go out and ensure safety in an aging society

4. To contribute to the Smart City concept

The MLIT tested shared mobility services in five regions including Fukuoka City, Hitachi City, and Yokosuka. Some of the issues the cities faced included reliance on private cars, lack of secondary transportation in rural areas, transportation for tourists, and insufficient transport for the elderly and non-car owners. MLIT worked with the private sector to accelerate the problem-solving of the regional issues identified.

And today, we’re working with an Israeli company called Optibus to help improve mass transit operations in Japan.

4. Electric vehicles

Japan is a global leader in climate-friendly vehicles including EVs and FCEVs, and has been manufacturing EVs since the Mitsubishi i-MiEV in 2009. Models such as the e-Palette are also being used in the Olympic Village to test the efficiency and capabilities of electric and autonomous vehicles.

Honda and Mazda started selling small EVs in 2020, and Nissan plans to start selling the Ariya later this year. Meanwhile, the Japanese government announced in December 2020 that it would prohibit the sale of new gasoline-powered cars by the mid-2030s (but still allow the sale of hybrid gas-electric cars).

What does this mean? Japanese OEMs need to pivot to match domestic and international regulations for going green – with Hitachi announcing this July that it will complete a new EV parts plant next year.

But Japan is also looking abroad for help. The EV battery swapping startup Ample partnered with Japanese petrol and energy company Eneos to deploy and operate battery swapping infrastructure in Japan, focusing on ride-hailing, taxi, municipal, rental, and last-mile delivery companies.

Japan also lacks robust charging infrastructure, particularly in the countryside, for which it needs international help.

Important time

The next few years are an important time for the entire CASE industry.

And the tone is being set in Japan - both by Woven City and the public sector’s efforts to accelerate and implement CASE technologies.

The country represents compelling opportunities for western CASE technology firms that are willing to invest in building a market there.


If you’d like to discuss your plans to expand your products and services in Japan's automotive sector, contact Thomas Shiekman at

Daniel Mota
About the Author

Daniel Mota

Daniel Mota was born and raised in Sao Paulo, Brazil, before moving to California. He has a keen interest in technologies and startups and has been involved in launching William Jessup University’s Entrepreneurial Centre, as well as working with Amazon Web Services (AWS) to help empower and accelerate early-stage startups.

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