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75% Of Its Connected Car Unit To Be Sold To VW By Volvo


12/19/2018


75% Of Its Connected Car Unit To Be Sold To VW By Volvo
The Swedish truckmaker Volvo would sell off to the German auto maker Volkswagen (VW) 75.1 percent of its WirelessCar division which is a digital service developer that specialises in connected driving. The Swedish truckmaker announced on Wednesday that the deal would be made for 1.1 billion Swedish crowns (US$121.5 million).
 
It is expected that Volvo would be able to now focus on its core business of commercial vehicles because of the deal. The Commercial vehicles division has turned out to be the core business of the company after it had sold out its car business in 1999.
 
The entire auto industry across the world is facing a new trend that is changing the focus of a number of truck and carmakers. This trend is the growing popularity and future prospect of electric and autonomous vehicles and a number of automakers – including truck makers and other auto makers, are selling off assets to generate revenues for investment for the expensive research and development processes of electrical and driverless vehicles with their eyes on the future in this industry segment where many tech companies are also entering thereby increasing the competition of the industry segment.
 
The aim of creation of the WirelessCar for Volvo was to develop a technology platform of the company that it can own and the development of digital services such as billing and safety and emergency breakdown services for customers. These services are being already provided by the this business unit for companies such as  Jaguar Land Rover , Daimler , Nissan and Volvo Cars .
 
Volvo said in a statement that currently, there are more than 3 million active connected cars throughout the globe on the platform of the company and it is expected that for 2018, this business unit would report revenues of about 500 million crowns.
 
The purchasing of WirelessCar technology would enable VW to be help it partially to achieve its goal of developing and offering more value-added services for customers. this would be ensured through establishing a safe and stable data exchange between the operating systems in the cars that it manufactures and a cloud platform that the company is developing in partnership with Microsoft .
 
Cartel authorities still has to approve of the deal, said the German carmaker. It also added that the company expected the deal to get over by the first half of 2019.
 
Volvo on the other hand said that following the closure of the deal, the money that would be generated from it would have a positive impact on the operating income of the company by about 1.5 billion crowns as well on its cash flow by about 1.1 billion crowns.
 
(Source:www.channelnewsasia.com)