(September 10, 2016) Volvo Cars and Autoliv have signed a letter of intent to set up a new jointly owned company to develop next-generation autonomous driving software as automotive firms across the industry race to embrace the emerging technology.

The planned new company will have its headquarters in Gothenburg, Sweden, and an initial workforce taken from both companies of around 200, increasing to over 600 in the medium term. The company is expected to start operations in the beginning of 2017.

The joint venture will create a new entrant in the growing global market for autonomous driving software systems. It marks the first time a leading premium car maker has joined forces with a tier one supplier to develop new ADAS and AD technologies.

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.

The joint venture will bring together two global leaders in automotive safety, underlining the contribution ADAS and AD can make to road safety and speeding the development and introduction of fully autonomous cars.

Volvo Cars has an established reputation for making some of the world’s safest cars, having invented the three point safety belt and consistently developed and introduced world leading active and passive safety systems. It has a medium term vision that no one will be killed or seriously injured in a new Volvo by 2020.

Autoliv is the world’s leading supplier of safety systems to car makers worldwide and has led the way in the development and introduction of active and passive safety technologies to the world’s car makers for more than 60 years.