Car maker Toyota is to plough more than $2.8 billion into developing its own self-driving vehicle software in a project that will be led by a team of engineers from the company's international headquarters in Tokyo.
The company will hire 1,000 additional new employees to create the platform and team-up with its existing major suppliers, Denso and Aisin Seiki, to help with the development.
Toyota will take a 90 per cent stake in the project, while the partners will get five per cent each.
It is believed that Toyota wants to develop its own self-driving car technology in order to ensure that it is not dependent on other companies for autonomous vehicle technology if and when it moves from the labs to production.
Self-driving vehicle technology risks marginalising traditional car makers. With computer-controlled vehicles, car makers will be little more than providers of a safety cage and seats, while the software takes the lion's share of the car industry's profits.
Specialist factors like engine technology, road holding and handling, and how a car drives will become much less relevant to car buyers' decision-making.
Although the project will take place in Japan, Toyota said English will function as the main language for the business.
The company said that it will form a new company, called Toyota Research Institute-Advanced Development, to lead the project. James Kuffner, poached by the Toyota Research Institute from Google in 2016, will function as its CEO.
"Building production-quality software is a critical success factor for Toyota's automated driving program," he said in a statement to Reuters.
"This company's mission is to accelerate software development in a more effective and disruptive way, by augmenting the Toyota Group's capability through the hiring of world-class software engineers. We will recruit globally, and I am thrilled to lead this effort."
Dr. Gill Pratt, executive technical advisor and CEO of the Toyota Research Institute, will also join the company's board of directors. He claimed that the project will "dramatically enhance Toyota's software capabilities".
He said: "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.
"That's what TRI has been working for, and that's what the new company will push even further."
The news comes as the firm revealed that it is also investing $1 billion into new artificial intelligence projects.
These projects will be run from the Toyota Research Institute in the US.
In February, the company led a $11.5 million investment round for a company called May Mobility. Based in Michigan, the start-up is developing autonomous shuttles.
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