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In one of many new alliances, Volvo will also develop driverless cars with Uber (Photo: Volvo)

Volvo Cars and automotive supplier Autoliv plan to jointly develop next-generation autonomous driving software.

The two Swedish companies said the planned new venture, which will be headquartered in Gothenburg, will develop advanced driver assistance systems (ADAS) and autonomous drive technologies. Volvo will be able to use these systems in its cars and Autoliv can make them available to its customers worldwide.

Volvo CEO Hakan Samuelsson said the cooperation will speed up the introduction of new autonomous-driving technologies.

Volvo, like many of its competitors, has been increasing its activities in software development to be ready to manage ever more complex driver assistance systems. The software push is also seen as essential in preparation for the manufacturing of fully autonomous vehicles.

Volvo announced last month that it will be hiring 400 new engineers over the next 12 months. Most of these will be software developers.

In addition, the carmaker, which is owned by China's Geely Group, is opening a new software development center in Lund in southern Sweden. It is staffing the facility in part with software engineers taken over from chipmaker Intel.

And, in a move that underlines the importance of driverless cars and new-mobility business areas, Volvo recently signed an agreement to jointly develop driverless cars with ride-hailing company Uber.

In the venture with Autoliv, the two companies plan to share revenue. The new unit will initially employ 200 people when it starts in 2017. That total is expected to grow to more than 600 in the medium term.

The new company will be headed by Dennis Nobelius, managing director of Volvo Switzerland.