Volkswagen's flagship luxury brand said on Friday it will jointly develop navigation map data, positioning algorithms and point-of-interest functions with China's web services provider Baidu.
Chinese Internet companies and auto makers have been quick to team up to start developing partly self-driving and Internet-connected cars, following a path already trodden by U.S. tech giants Google Inc and Apple Inc.
"We are now taking our next big step in China," Chief Executive Rupert Stadler said at the carmaker's annual shareholder meeting in Neckarsulm, Germany. "The virtual and real worlds are merging."
The greater use of electronics and software in vehicles, and the ability of cars to connect to smartphones and other devices, is providing automakers, suppliers and technology firms with new business opportunities.
Audi and Baidu agreed a memorandum of understanding in January and will sign a contract on their partnership at the May 25-27 international Consumer Electronics Show (CES) in Shanghai.
Ingolstadt-based Audi also said it will develop a China-specific LTE module with Huawei to deliver fast-data transmission for use in China, Japan and Korea.
Germany's premium carmakers Mercedes, Audi and BMW have teamed up with private equity firm General Atlantic to increase their firepower as they're jointly bidding for Nokia's mapping unit Here, two sources told Reuters on Thursday.
Separately, Audi reaffirmed it aims to increase sales significantly this year beyond the record 1.74 million cars achieved in 2014. This translates into growth of between five and 9.9 percent, a spokesman said.
Stadler said the planned Q8 flagship sport-utility vehicle (SUV) will be launched in 2019, a year after a new electric SUV will come to market.
© Thomson Reuters 2015