In its bid to become a mobility provider with fully connected vehicle fleet, German automobile group Volkswagen has entered into a strategic partnership with Microsoft to leverage the US software giant’s Cloud expertise.

As part of the partnership, the two companies will collaborate to develop the “Volkswagen Automotive Cloud”, a dedicated platform for all future Volkswagen digital services and mobility offerings.

In the future, Volkswagen’s fleet of cars will become mobile Internet of Things (IoT) hubs linked by Microsoft Azure, the German car maker said in a statement this week.

“The strategic partnership with Microsoft will turbocharge our digital transformation,” said Volkswagen CEO Herbert Diess.

Via the Volkswagen Automotive Cloud, the automobile group plans to optimise the interconnection of vehicle, Cloud-based platform and customer-centric services for all brands.

“Volkswagen is harnessing technology to digitally transform and deliver innovative new connected car services to its customers,” said Satya Nadella, CEO of Microsoft.

“The world’s leading companies run on Azure, and we are thrilled that Volkswagen has chosen Microsoft. Together we will reimagine the driving experience for people everywhere,” Nadella said.

From 2020 onwards, more than five million new Volkswagen-brand vehicles per year will be fully connected and will be part of the IoT in the Cloud, Volkswagen said.

In the future, all in-car services for vehicles of the core Volkswagen brand as well as the Group-wide Cloud-based platform will be built on Microsoft’s Azure cloud platform and services as well as Azure IoT Edge.

Volkswagen said it would also establish a new automotive Cloud development office in North America near Microsoft’s headquarters.