Volvo Cars and Autoliv have signed a final agreement to set up a new joint venture (JV) for the development of software for autonomous driving and driver assistance systems.
The deal is based on the letter of intent announced during fall 2016.
As part of the deal, Autoliv will contribute about SEK1.1bn ($120m) into the JV, dubbed Zenuity.
On the other hand, Volvo Cars will contribute certain intellectual property rights and human resources to the JV. The company will not provide any cash.
The two companies will each own 50% share in the JV, which will have its headquarters in Gothenburg, Sweden.
Zenuity will operate from other international locations including Munich in Germany and Detroit in the US. Initially, the company will have a human resource of about 200, coming in from Volvo and Autoliv.
Zenuity’s CEO will be Dennis Nobelius and the new JV will be governed by a separate board of directors and shall operate independently with its own facilities.
The workforce is expected to grow to more than 600 in the medium term. Operations of the new company are expected to begin in the first half of this year, after obtaining approvals from competition authorities in the respective countries of operations.
Volvo Cars and Autoliv will license and transfer their respective intellectual property rights for their Advanced Driver Assistant Systems (ADAS) and Autonomous Driving (AD) technologies.
Volvo stated that Zenuity will work on ADAS and AD technologies from bottoms up and will develop an entirely new technology.
Zenuity expects to have its first driver assistance system available for sale by 2019. Autonomous driving technologies are expected to follow shortly thereafter.
Autoliv will be the sole supplier and distribution channel for Zenuity’s products sold to third parties, with no exceptions. Only Volvo can source the products directly from the JV.
