Volvo Cars, the premium car maker, and Autoliv, the worldwide leader in automotive safety systems, have signed a final agreement to establish a new joint venture called Zenuity to develop software for autonomous driving and driver assistance systems, based on the letter of intent announced during fall 2016.
Zenuity will create a new entrant in the fast 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 advanced driver assist systems (ADAS) and autonomous driving (AD) technologies.
As part of the agreement announced today, at the time of closing 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.
Headquartered in Gothenburg, Sweden and with additional operations in Munich, Germany, and Detroit, USA, the initial workforce of around 200 people will come from Volvo Cars and Autoliv. The company is expected to grow to over 600 employees in the medium term. Operations are expected to start during the first half of 2017 after approvals from relevant competition authorities in several countries have been obtained and other customary closing conditions have been satisfied.
Both Volvo Cars and Autoliv will license and transfer the intellectual property for their ADAS systems to the joint venture. From this base, the company will develop new ADAS products and AD technologies. 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.
As previously announced, Dennis Nobelius will be the Chief Executive Officer of the joint venture. The joint venture will be governed by a separate board of directors, and independently operate within its own facilities.
Volvo Car Group in 2015
For the 2015 financial year, Volvo Car Group recorded an operating profit of 6,620 MSEK (2,128 MSEK in 2014). Revenue over the period amounted to 164,043 MSEK (137,590 MSEK). For the full year 2015, global sales reached a record 503,127 cars, an increase of 8 per cent versus 2014. The record sales and operating profit cleared the way for Volvo Car Group to continue investing in its global transformation plan.
About Volvo Car Group
Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 503,127 in 2015 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.
As of December 2015, Volvo Cars had almost 29,000 employees worldwide. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).