High development costs and threats from Silicon Valley have pushed rival German carmakers BMW and Daimler to cooperate on driverless technology.
The companies, which compete hard in the lucrative luxury car market, on Thursday announced a strategic partnership focused on highly-automated and autonomous driving.
“Combining the key expertise of our two companies will boost our innovative strength and speed up the spread of this technology,” BMW (BMWYY) board member Klaus Fröhlich said in a statement.
It’s not the only way BMW and Mercedes-Benz owner Daimler (DDAIF) are starting to work more closely together.
Last week they said they would invest $1 billion in a new venture to develop mobility services including ride-sharing and charging systems for electric cars.
Michael Hafner, an executive who works on autonomous driving at Mercedes-Benz, said the two projects are complimentary.
“The field of activity is completely different, but the partner is the same and the motivations at least similar,” he wrote in a blog post about Thursday’s announcement.
Deeper cooperation between the German companies is the latest example of established automakers forming partnerships to share the costs of developing new technologies including autonomous driving systems.
Hafner said the alliance makes sense because automated driving “will radically transform our industry — and because in the long run we will be not only stronger but also more successful as partners than we would be alone.”
The companies said they would initially focus on driver assistance systems, automated driving on highways and parking features. They have signed a memorandum of understanding.
Other global automakers have also paired off.
Ford (F) and Volkswagen (VLKAF) announced a plan in January to build vehicles together. The companies also agreed to “investigate” how they can work together to develop next generation vehicles.
The trend toward cooperation has accelerated as carmakers come under increased pressure from tech companies including Uber and Google (GOOGL) parent Alphabet.
Upstarts like Tesla (TSLA) and new combinations, such as the joint effort by General Motors (GM), SoftBank (SFTBF) and Honda (HMC) to develop fully autonomous vehicles, are also shaking up the industry’s future.
