The jointly owned company, which has yet to be named, will have its headquarters in Gothenburg, Sweden and is expected to start operations in the beginning of 2017. 

The deal 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 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. 

It expects to have its first ADAS products available for sale by 2019, with AD technologies available by 2021. 

Håkan Samuelsson, president and chief executive of Volvo Cars, 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.” 

Jan Carlson, chairman, chief executive and president of Autoliv, added: “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.”