Truck maker Volvo sells 75% of connected car unit to VW
Berlin/Stockholm — Volvo has agreed to sell 75.1% of WirelessCar, a digital service developer specialising in connected driving, to Volkswagen for 1.1-billion Swedish krona ($121.5m), the Swedish truck maker says.
The deal will allow Volvo to focus on commercial vehicles, its core business since it sold Volvo Cars in 1999.
Several truck and car makers have been shedding assets to pool money into developing expensive electrical and driverless vehicles, markets where they face competition from new entrants such as Tesla.
WirelessCar has its own technology platform and develops digital services like billing and safety and emergency breakdown services for customers including Jaguar Land Rover, Daimler, Nissan and Volvo.
The company has more than 3-million active connected cars across the globe and is expected to report revenues of about 500-million krona in 2018, Volvo said.
VW said WirelessCar technology would further its goal of developing value-added services for customers by enabling safe and stable data exchange between operating systems in its cars and a cloud platform it is developing with Microsoft.
The German car maker said the deal still had to be approved by cartel authorities and that it expected the transaction to close during the first half of 2019.
On closing, the divestment would result in a positive impact on Volvo's operating income of about 1.5-billion krona and on cash flow of 1.1-billion krona, Volvo said.