Volkswagen Buys Controlling Stake in Volvo's 'WirelessCar' Unit
【Summary】German automaker Volkswagen is buying a controlling stake in Volvo’s WirelessCar, a digital service developer specializing in connected vehicle services.
BERLIN/STOCKHOLM — German automaker Volkswagen is buying a controlling stake in Volvo's WirelessCar, a digital service developer specializing in connected vehicle services, for 1.1 billion Swedish crowns ($122 million), the companies said on Wednesday.
Volkswagen said WirelessCar's technology would further its goal of developing value-added services for customers by enabling safe and stable data connection between the operating systems in its vehicles and a secure cloud platform it is developing with Microsoft.
Volkswagen is buying 75.1 percent of WirelessCar in the deal.
WirelessCar provides a connected vehicles services platform to automotive OEMs as well as vehicle owners. The company has been working with Volvo since 2001, and operates the automaker's "Volvo on Call" service. WirelessCar offers Volvo owners remote diagnostics, subscription management and payment services.
These types connected services will be common in connected cars of the future once faster 5G networks are available, allowing passengers make in-car payments and connect to third party business and entertainment services.
For vehicle owners, WirelessCar offers services such as automatic crash notification, theft notification, stolen vehicle tracking, remote immobilization, geofence alerts and electric vehicle charging services.
WirelessCar customers including Jaguar Land Rover, Daimler, Nissan and Volvo Cars.
The company has more than 3 million active connected cars across the globe and is expected to report revenues of about 500 million crowns in 2018, Volvo said in its statement.
Volkswagen has said it aims to invest more than 11 billion euros in electric vehicles, digitalization, autonomous driving and mobility services by 2023. The automaker plans to introduce more that 20 new electric models by 2022, and many of these models will be fully connected.
Volkswagen said it targets sales of more than 1 billion euros from 2025 through the WirelessCar platform, excluding possible vehicle sales via the digital platform, which will be accessible on mobile phones or on in-car devices in some models starting next April.
Volkswagen's digital shop will offer services such as its parking app We Park and its delivery service We Deliver, allowing packages shipped from Amazon and other companies to be delivered to a vehicle instead of a home mailbox.
Customers will also be able to book functions on demand, such as map data for specific countries or auxiliary heating in winter months, VW said.
The WirelessCar platform for registered Volkswagen customers will also be open for third-party vendors, such as music streaming services, movies and other infotainment, delivered right to the vehicle.
The WirelessCar deal still needs to be approved by authorities and is expected to close during the first half of 2019.
Volkswagen has an option to buy the remaining share in WirelessCar, it said, adding that it can also imagine keeping Volvo as a shareholder.
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