Japanese multinational Toyota and Panasonic announced plans to create a joint company that would focus on advanced technology in urban development, especially to link connected cars and homes. The new entity will ‘connect’ cars and homes, the two companies said.

Their latest venture will be established early next year with a focus to offer personalised services to homes. Both companies plan to hold 50 percent equity each and will boost cooperation at their ‘respective housing operations’ in Japan, Reuters reported. 

Toyota has already been developing a network of connected cars that can share insights on vehicle usage which is helpful for on-demand ride-sharing, insurance, and maintenance. According to Reuters, Toyota said that it will further explore its partner network and operations such as manufacturing and selling of cars and robotic technology to expand into new home energy services.

President Akio Toyota said, “If we are able to use this network going forward not only to manufacture and sell vehicles but to also provide new services, our future possibilities will greatly expand.”

The tie-up will reinforce the partnership between Toyota and Panasonic. In January, they announced a joint venture to build electric vehicle batteries, research and development, and manufacturing.

Panasonic President Kazuhiro Tsuga in a joint statement on Thursday, said, “We will put our respective strengths together to offer new value in everyday life.”

The plan comes at an opportune moment when lower-emission vehicles and ride-sharing services have gained momentum in the marketplace. This in turn has left the traditional automakers and their suppliers stuck between a hard and a rock place.