Japan's big three car makers will team up with electronics giants and the government to propel the country into the front ranks of self-driving car technology.
"We will set up a so-called self-navigation business conference so that we can discuss what measures we need to take," a land and transport ministry official said, adding that they have yet to set the agenda.
The Nikkei business daily said the government will invite Toyota, Nissan, and Honda as well as Panasonic and Hitachi to the meeting, which will look at jointly developing parts and technologies related to self-driving.
The project will also involve the University of Tokyo and Nagoya University, with their research institutes handling analyses of data, the newspaper said.
Prime Minister Shinzo Abe will include measures on the project in his growth strategy plan, expected to be announced around June, the report said.
As a first step, car parts makers will standardise software for self-control navigation and for sensors that detect obstacles while driving so that they can cut development and production costs, it said.
Common technology for communication links will also be targeted to guard against accidents caused by hacking, the paper reported.
Currently, Japanese car parts makers lag behind Bosch in sensors, with the German giant supplying Western as well as Japanese car makers, the Nikkei said.
The public sector will help in developing infrastructure, so that traffic and accident information can be communicated from on-road systems, it said.
The private and public sectors may invest 10 billion yen or so to build test courses, a focal point in international competition, it added.
European, Japanese, and US car makers are aiming to commercialise self-driving cars by around 2020, with global behemoths including Daimler and Google in play.
Japan is concerned that if US and European rivals lead in developing the industry standards, it could put Japanese counterparts at a disadvantage, the Nikkei added.