NAGOYA, Dec 25 (Reuters) - Denso Corp forecast that revenue for its safety and automated driving systems will rise by 60 percent by 2020 as the auto parts supplier plans to focus more on driver-assist functions, increasingly becoming a common feature on cars.
The world’s second-largest parts maker, which generates roughly half its revenue from Toyota Motor Co, on Friday said that it expected revenue for active safety systems to hit 1 trillion yen ($8.30 billion) in 2020, from around 630 billion yen in the year ended March.
Safety functions generated roughly 15 percent of the company’s total revenue during the year ended March.
Global automakers and technology giants are competing to get ahead in a race to develop self-driving cars, with Toyota, Nissan Motor Co, Google and other companies aiming to have cars with varying levels of self-driving functions on the roads by 2020.
Google and Ford Motor Co are in talks about forming a partnership to develop autonomous car technology, Reuters reported this week.
Growing demand for driver-assist functions has raised the role of technology and software in auto manufacturing, an area which had long been dominated by mechanical engineering.
“We’re not expecting self-driving functions to be a big area for revenue growth in 2020,” Denso executive vice president Yasushi Yamanaka told reporters at a briefing in Nagoya, western Japan.
“But we anticipate that safety features like automatic braking, lane keeping and other safety features like the ones we developed for the new Toyota Prius will drive big growth through 2020.”
Denso’s push further into software development comes as the company faces increased overseas competition from suppliers including Germany’s Robert Bosch and Continental AG , the latter of which also supplies automated driving technology to Toyota.
To compete more effectively with global parts suppliers and a growing number of venture technology firms, Denso said it was establishing a section within the company specialising in advanced driver assistance systems, based in Tokyo. ($1 = 120.4200 yen) (Reporting by Naomi Tajitsu. Editing by Jane Merriman)