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Customer LoginsVolvo, Autoliv to form autonomous driving software JV
Volvo Cars has announced that it is to form an autonomous driving software JV with Swedish safety technology component supplier, Autoliv.
- Significance : Volvo Cars has announced that it is to form an autonomous driving software JV with Swedish safety technology component supplier, Autoliv.
- Implications: The pair have already established a developmental presence in this area.
- Outlook: This will support both companies in making further progress in this area.
Volvo Cars and Autoliv have announced that they have signed a letter of intent (LoI) with regards to setting up a new joint venture (JV) to develop "next generation autonomous driving software". The new JV company will have its headquarters in Gothenburg (Sweden) when operations are expected to begin at the start of 2017. Initially it is anticipated to have 200 employees, taken from the two shareholders, and this figure is intended to grow to 600 employees in the medium term, with chairman, chief executive and president of Autoliv, Jan Carlson adding at a press conference reported on by Reuters that the JV will also have sites in Germany and in Southfield, Michigan (United States).
The role of the new company, which has yet to be named, will be to develop "advanced driver assistance systems (ADAS) and autonomous drive [AD] systems." These will be used by Volvo's passenger cars as well as for sale through Autoliv to other automakers globally, with revenues shared by both companies. However, while Autoliv will be the exclusive supplier and distribution channel for the new company's products to third parties, Volvo will source the technology directly from the JV.
Volvo and Autoliv will license and transfer the existing intellectual property for their ADAS systems to the JV, and this will form the basis of the technology developed by the new business. It expects to have its first ADAS products available for sale by 2019 with AD technologies available by 2021.
Its management will comprise representatives from Autoliv and Volvo Cars. The chief executive of the new JV will be Dennis Nobelius, who is currently managing director of Volvo Switzerland and was formerly vice-president of the development of 90-series model line-up.
However, the companies warned that the LoI is non-binding, and will be subject to further negotiations and the parties reaching a final definitive agreement. They added that there is no guarantee that a definitive agreement will be reached, or that the JV would be established.
On the announcement, Carlson said, "There are no two companies that can claim to have done more for automotive safety worldwide than Autoliv and Volvo. This new company is a recognition of the fact that autonomous driving is the next step to transform road safety."
President and chief executive of Volvo Håkan Samuelsson also said, "By combining our know how and resources we will create a world leader in AD software development. This means we can introduce this exciting technology to our customers faster."
Outlook and implications
The aim of this new partnership seems to be to expedite the pace of development in this new technology area, compared to how it would be done alone or as part of traditional OEM-supplier relationship. Both had been already working hard in making developments in this area. Volvo, for example, has announced a partnership with ride-hailing company Uber on to develop a basis for autonomous vehicle development. Prior to this, Volvo had announced a test programme for autonomous driving that will take place in various markets around the world including Sweden, China and the United States, known as "Drive Me" in which Autoliv is also involved. As for Autoliv, as well as being involved in Volvo's existing test programme, the supplier is also heavily investing in active safety systems using radar and vision sensors.
Indeed, the pair will pull together their strengths in these area, with Samuelsson telling Automotive News Europe (ANE) in a telephone interview following the announcement that Volvo will contribute the decision-making software that determines how a car will react in different driving situations, while Autoliv will put forward its sensor technology and computer vision systems. He adds that the key to success is to create an completely open, transparent environment for collaboration, noting that a normal relationship would not work in this case: "This has to be done in a faster, more dynamic way."
By offering the technology of the JV for sale through Autoliv, the pair should see some return on the costs of this development programme. However, there are many OEMs who are pursuing their own initiatives in this area including BMW Group and Ford, while component suppliers are also making their own efforts to get ahead. With this in mind, the field could be complicated, even given IHS Automotive's forecast that sales of autonomous vehicles will reach around 21 million units by 2035.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.