Volvo Cars is teaming up with automotive safety systems specialist Autoliv to establish a new joint venture to develop software for autonomous driving and driver assistance systems.

Jan Carlson, chairman, chief executive and president of Autoliv with Håkan Samuelsson, president and chief executive of Volvo Cars.

The new business, called Zenuity, follows a letter of intent signed last autumn and marks the first time a leading premium car maker has joined forces with a tier one supplier to develop new advanced driver assist systems (ADAS) and autonomous driving (AD) technologies.

Autoliv will make a total investment of around 1.1 billion SEK into the joint venture, the large majority of which is an initial cash contribution, and which also includes certain assets. Volvo Cars will also contribute certain intellectual property assets and human resources to the joint venture, but no cash. As previously announced, Autoliv and Volvo Cars will own the joint venture 50/50.

The business will be headquartered in Gothenburg, Sweden, with additional operations in Munich, Germany, and Detroit, USA. Operations are expected to start during the first half of 2017 following approvals from relevant competition authorities in several countries and other customary closing conditions.

The new company is expected to have its first driver assistance products available for sale by 2019 with autonomous driving technologies following shortly thereafter.

Autoliv will be the exclusive supplier and distribution channel for all the new company’s products sold to third parties, and there will be no exclusivity toward any customer or the owners. Volvo Cars will source such products directly from the new joint venture.