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Volkswagen buys Volvo's connected car service

VW now owns a controlling stake in WirelessCar.

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altrendo images via Getty Images

Volkswagen has made clear its ambition for unified internet services for its vehicles -- earlier this year it announced its partnership with Microsoft to build the Volkswagen Automotive Cloud. Now, it's pushing its agenda further, having acquired a controlling stake in Volvo's WirelessCar service.

The $122 million deal, which gives the German carmaker 75.1 percent of the connected driving developer, helps boost VW's plans in two main ways. Firstly, access to WirelessCar's tech, which will provide safe and stable data exchange between operating systems in cars and the cloud platform it's developing with Microsoft.

Secondly, it reduces future competition. VW wants to get its OS on the road by 2020, but it's not the only carmaker with this agenda. Audi, for example, is working with Huawei to develop intelligent connected vehicles, while BMW, Ford and GM have joined forces to bring blockchain to vehicles.

As for Volvo, the deal -- expected to close during the first half of 2019 -- will give it a hefty cash flow boost, and the opportunity to focus on commercial vehicles, which has formed its core business since 1999.

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