VW purchases 75.1% stake in Volvo’s WirelessCar platform

The forward-looking purchase of the stake is of strategic significance as it revolves around the future of mobility.

In a strategic move, Volkswagen has purchased a controlling stake in Volvo’s WirelessCar, a digital service developer which specializes in connected driving, for $122 million (1.1 billion Swedish crowns).

In a statement Volkswagen stated, WirelessCar’s 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.

Significantly, the deal, which sees Volkswagen buying a 75.1% stake in WirelessCar, will allow Volvo to focus on commercial vehicles, its core business since it sold Volvo Cars in 1999.

VW has said, it plans on investing more than 11 billion euros in digitalization, electric vehicles, mobility services and autonomous driving by 2023; the bulk of the fund has been earmarked for electric cars.

WirelessCar uses its own platform which includes digital services such as safety, emergency breakdown services and billing for customers.

Volvo Cars, Jaguar Land Rover, Nissan and Daimler are its customers.

In a statement, Volvo stated, it has more than 3 million active connected cars across the globe; by the end of 2018, it expects to report 500 million crowns in revenues.

Volkswagen stated, it has forecast sales of more than 1 billion euros from 2025 through WirelessCar’s platform; this excludes potential vehicle sales via the digital platform, which will be accessible on mobile phones or on in-car devices in some models starting in April 2019.

Volkswagen’s digital shop will offer services such as its parking app We park, its car trunk delivery service We deliver and its car sharing services We Share or Moia.

VW stated, customers will be able to book functions on demand, including map data for specific countries or auxiliary heating in winter months.

The platform for registered Volkswagen customers will also be open for third-party vendors, such as suppliers of music, movies and other infotainment.

The WirelessCar deal still has to be approved by cartel 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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