Toyota will establish a new company in Tokyo later this month for automated driving R&D.

Toyota Research Institute-Advanced Development (TRI-AD) would "accelerate its efforts in advanced development for automated driving", the automaker said in a statement.

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Toyota Motor Corporation (TMC), Aisin Seiki (Aisin), and Denso Corporation (Denso) have concluded a memorandum of understanding on joint development of fully integrated, productionquality software for automated driving. The three companies will now hold further discussions, aiming to conclude a concrete joint development contract.

TMC, Aisin and Denso plan jointly to spend around JPY300bn (US$2.84bn) on TRI-AD. The new company will have about 1,000 employees recruited both from outside and from TMC, TRI, and group companies Aisin and Denso. Toyota is considering locations in Tokyo that are "competitive in terms of accessibility and recruitment".

James Kuffner, currently TRI chief technology officer, will be TRI-AD CEO.

"Building production quality software is a critical success factor for Toyota's automated driving programme," said Kuffner. "This company's mission is to accelerate software development in a more effective and disruptive way, by augmenting the group's capability through the hiring of world class software engineers. We will recruit globally, and I am thrilled to lead this effort."

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TMC said the automotive industry is "now in an era of profound transformation. High quality software development and big data from connected vehicles will be crucial to success".

The automaker established Toyota Research Institute (TRI) in North America in 2016 to conduct research in the areas of artificial intelligence, automated driving, and robotics.

TRI, TRI-AD and TMC will have a streamlined relationship, resulting in a fast track, truly integrated development model. The key objectives of the new company include:

  • Create a smooth software pipeline from research-to-commercialisation, leveraging data-handling capabilities.
  • Strengthen coordination with TRI and efficiently link research results to product development.
  • Strengthen the collaboration within the Toyota group in the domains of research and advanced development.
  • Recruit and employ top level engineers globally, while cultivating and coordinating the strong talent within the group.

"Toyota is known for the quality and efficiency of the Toyota Production System (TPS). I have no doubt that we can translate the fundamental ideas of TPS from the production of hardware to the production of software and dramatically enhance [our] software capabilities," said Gill Pratt, TMC Fellow, TRI CEO and chairman of the new TRI-AD board of directors.

"That's what TRI has been working for, and that's what the new company will push even further."

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