Volvo Cars said in a statement it was forming the joint venture with Autoliv, a Swedish pioneer of the safety belt in the 1950s, to “develop next generation autonomous driving software.”
Last month, Volvo announced another joint venture with ride-sharing service Uber which will offer trips in driverless cars, beginning in Pittsburgh in the United States.
The Swedish company is one of the world leaders in developing cars of the future, which will take passengers to their destinations of choice without human intervention.
Volvo engineers have been testing the company's first autonomous car model on the streets of the southwestern town of Gothenburg since 2014. The cars are scheduled to be made available to consumers in Gothenburg and London in 2017.
“The new company, which has yet to be named, will develop advanced driver assistance systems (ADAS) and autonomous drive (AD) systems for use in Volvo cars and for sale exclusively by Autoliv to all car makers globally, with revenues shared by both companies,” Volvo said.
The company expects to have its first ADAS products available for sale by 2019 with AD technologies available by 2021.
“By combining our know how and resources … we can introduce this exciting technology to our customers faster,” Volvo chief executive Håkan Samuelsson said.