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.
Like many auto companies, Volvo is keen to develop autonomous vehicles. This week, the automaker unveiled Concept 26, a model of a driverless car's interior.
"Autonomous driving is at the center of Volvo' strategy and future," Annwall said.
"The Concept 26 is a concept of what we view the interior will look like quite soon as we have made the design compatible with our cars."
But the marketing executive could not say how Microsoft and Volvo would work together in this area.
Data and so-called machine learning – where a computer can learn to adapt and make decisions based on vast amounts of data – is another area the two firms are hoping to collaborate on. Anwall said that modern cars are equipped with vast amounts of sensors which could be used to detect road conditions, such as an icy patch, and send that information to drivers who are behind to warn them, for example.
While details were scarce on many areas, one feature outlines by the firms was how HoloLens -- Microsoft's augmented reality headset which projects 3-D images on to real objects -- could be used to help customers buy cars.
Annwall explained that customers who come into a Volvo showroom can use HoloLens to view the car in 3D, change colors and see how features work. A customer could overlay new colors over a Volvo car in a showroom, for example.
"Here you will get full scale and can look up to it can touch it, get into it and get that mix of digital and feel and touch of physical world that we know customers will appreciate," Anwall told CNBC.