Volvo Group, Daimler look to technology joint venture in bid to save costs
FILE PHOTO: President and CEO of AB Volvo Martin Lundstedt stands in front of a Volvo truck, on the occasion of the publication of an interim report, in Gothenburg, Sweden, April 20, 2023. TT News Agency/Adam Ihse/File Photo
GOTHENBURG (Reuters) -European truckmaking rivals AB Volvo and Daimler Truck hope to cut costs and reduce reliance on suppliers by jointly developing a software-defined vehicle program, they said on Tuesday.
Fleets and truck manufacturers, like automakers, have been racing to produce technology-packed vehicles while also grappling with the need to reduce costs.
Truckmakers are currently heavily reliant on suppliers because their software is closely tied to hardware, but Daimler and Volvo's new business - called Coretura - aims to develop a software-defined vehicle platform and reduce that dependence.
The companies are looking to create an "industry standard", Daimler Trucks CEO Karin Radstrom told reporters.
"We're looking at how we can move from our current reality where we are very much dependent on our suppliers - which drives both cost and sometimes timelines - and instead looking at what's the next generation of software that we need to bring to the vehicle", Radstrom said.
The Gothenburg-based venture will employ 50 employees to start, with the hope of first deliveries of its connectivity platform in 2027 and further deliveries towards the end of the decade.
"Everything in the vehicle industry is very much oriented around software and controlled by software", said Johan Lunden, a Volvo veteran and the newly appointed CEO of Coretura.
Software will play an increasingly vital role in achieving sustainability, productivity, and safety targets in the future, he added.
While rivals, Volvo Group and Daimler have collaborated on various businesses in recent years, such as within charging and hydrogen fuel cell development.
(Reporting by Marie Mannes in Gothenburg and Jesus Calero in Gdansk; Editing by Matt Scuffham)
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