Japan could lose its position as a major car producer if it fails to compete against driverless vehicles from the likes of Google and Apple according to Ferrari designer Ken Okuyama.
Okuyama, who was responsible for designing vehicles such as the Ferrari F60 Enzo and the Porsche Boxster, said the game-changing technology could relegate the Japanese automotive industry to a supplier of parts if it does not embrace it.
Taking on Google and Apple will be the ultimate test for Toyota and the country’s other mainstream automakers, he said.
"If they don't watch out, they risk becoming just suppliers to those [tech] companies."
"Automakers have used existing technology and road infrastructure to create cars which have an emotional connection with drivers. This is how they have been adding value to their products."
"But cars have become commodity products, and, as such, they have to become more functional and even more affordable."
Google's fleet of self-driving cars include a modified version of Toyota's Lexus sport utility vehicles, in addition to the pod-like, driverless Google Car prototype (pictured), both of which are being road-tested in the United States.
In addition, although nothing has been officially announced, Apple is rumoured to be developing a self-driving vehicle that could see release in 2019.
Honda, which is currently developing a new automatic setting to be used in congested traffic and technology to pre-programme cars to drive automatically, acknowledged the potential threat from tech firms in the future.
"At this point, whether Google or Apple can come up with a car is unclear," said Koichi Fukuo, Honda’s R&D president.
"But they are spending aggressively to recruit people to achieve that and in that sense ... we can't rule out the possibility they may eventually become a competitor."
Okuyama says Japanese automakers must focus even more on finding ways for cars to benefit from advanced technologies - an area where he says they have lagged for years.
"Self-driving cars will eventually become commonplace ... as a result, carmakers will have to sell not only the hardware, but also the overall system to run the cars," he said. "Companies like Mercedes and Toyota are looking at this, but Google is ahead in this game."
Earlier this year, the UK government gave the go-ahead for driverless cars to be tested on public roads in a bid to encourage companies developing the technology to invest in the country.