Volvo has struck a deal with Microsoft that will see the two companies work together in developing driverless vehicle and giving potential car buyers an interactive shopping experience using the U.S. technology giant's HoloLens headset.
The two firms announced on Friday that the main focus of the partnership will be to develop autonomous cars, the use of data to create "meaningful services", machine learning and how to modernize the car buying process.
"Technology will transform when it comes to autonomous cars, connectivity and the car buying process. We believe this will happen it's naturally the tech and automotive industry comes closer to explore this together," Björn Annwall, senior vice president of marketing, sales and service at Volvo, which is owned by Zhejiang Geely Holding Group, told CNBC by phone.
"We are exploring a number of different collaborations," Annwall added saying that exact details of what the partnership would entail would not be released yet.
The move highlights the trend for technology companies to jump into the autos space. Last month, South Korea electronics giant LG announced that it would be providing key components for General Motors' upcoming Chevrolet Bolt electric car. At the same time, Google is testing driverless cars while speculation is rife that Apple will also come to market with its own vehicle.