The Japanese government intends to promote the manufacturing of cars that are heavily controlled by software rather than hardware.
Plans for "software defined vehicles," or SDVs, are contained in a draft strategy seen by NHK.
The proposed target is for domestic manufacturers to hold 30 percent of the SDV global market by 2030.
Owners of such cars can extensively upgrade and customize them through remote software updates. This includes driving performance and safety functions.
The technology can extend a vehicle's lifespan.
The government wants to encourage cooperation among domestic manufacturers in research and development of sophisticated semiconductors for cars, as well as software standardization.
Officials also aim to assist in the development of self-driving trucks and taxis.
The global auto industry is experiencing rapid changes shaped by advancements in electric vehicles and self-driving technologies.
Japanese carmakers are trailing Tesla and other new rivals in the SDV field.
The industry ministry plans to announce the draft strategy as early as Monday.