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Volkswagen announced on Thursday that its software unit Cariad will establish a joint venture with Chinese technology firm Horizon Robotics, as the German car giant aims to accelerate its introduction of automatic driving customized solutions and strengthen its tech presence in China, its biggest market.

The new unit will develop an advanced, full-stack driving assistance system and automatic driving solution by integrating multiple functions on a single chip to improve system stability, save costs and reduce energy consumption, Volkswagen said in a statement sent to the Global Times on Thursday.

This technology will help create differentiated innovation and provide the company's electric vehicles in China with scalable, cost-effective, advanced driving assistance systems and automatic driving solutions, the statement noted.

In total, Volkswagen is planning to invest about 2.4 billion euros ($2.33 billion) in the joint venture. The deal is expected to be completed in the first half of 2023.

Ralf Brandstaetter, the carmaker's China chief, said that the Chinese market is full of vitality and is the group's "most important" business region in the world.

"The joint venture will enable us to provide customized products and services to Chinese consumers at a faster speed," said Brandstaetter, adding that local research and development will give the company more autonomy and further consolidate its leading position in the Chinese automobile market.

Brandstaetter also noted that through the cooperation, the company will accelerate development in the field of automatic driving and further drive the business transformation in China.

Volkswagen's move to strengthen autonomous driving research is the latest example of foreign car firms' efforts to upgrade their self-driving technologies by cooperating with high-tech firms, as the world's automobile industry is undergoing rapid technological revolutions and cars are becoming more high-tech.

Japan's Sony Group Corp and Honda Motor recently set up a joint venture that aims to deliver electric vehicles by 2026, according to a Reuters report on Thursday. In the partnership, Sony will provide sensors and other technology for a Level 3 autonomous driving system.

Daimler Greater China, a subsidiary of Mercedes-Benz Group, also signed a memorandum of cooperation with Tencent Cloud Computing Beijing in the field of high-level autonomous driving in July. The cooperation will strengthen research resources and support Mercedes-Benz and Nvidia to jointly develop self-driving car technology in China.

Global Times