Volkswagen bets billions on car-share scheme and tech expansion

Volkswagen has announced it is investing €3.5 billion ($A5.5b) to fast-forward the development of the digital side of its business by expanding its cloud-based apps and connected-car technology.

The enormous spending spree has been touted by the industry as a bold move to transition it from being just a mass-manufacturer of cars to a provider of transport services.

As part of its billion-dollar cash injection, the German car-maker will launch its 'We Share' car-sharing scheme that's been designed to rival BMW's DriveNow and Daimler's Car2Go.

Addressing criticisms from analysts that the Volkswagen Group is "years behind" its rvials when it comes to car-sharing, VW says it will launch its We Share product in Berlin in the second quarter of 2019.

As well as the car-share schemes Volkswagen has begun new technology initiatives and purchases that recently included reportedly trying to buy US self-driving start-up Aurora in a bid to form new partnerships to help it introduce autonomous vehicles.

However, Aurora, which was founded by former Tesla and Google's Alphabet employees, resisted the Volkswagen takeover bid, reportedly preferring to remain independent.

In an interview with a German newspaper Handelsblatt, VW CEO Herbert Diess said the brand's new partnerships and acquisitions of software companies would lay the groundwork for the new era of self-driving and electric cars, and that the brand's digital transformation was even more important than the switch to electric cars.

Under the 'We' banner, in the future VW customers will be able to access both conventional cars and pure-electric vehicles. As part of the service, you will be able to use your app to electronically pay for parking, use your car to receive in-car packages and track fuel prices.

In future, Volkswagen owners will also use their app to rent out their own vehicles by passing digital keys to other users.

Once rolled out, the digital expansion is expected to net the car-maker €1 billion by 2025 and add more than 10 million users each year.

As part of the plan, the car-maker is creating a new software operating system called VW OS that will be first introduced on its pure-electric car range in 2020.

Instead of around 70 different sensors that are controlled and work independently, the new system will connect all the modules via the single proprietary software.

This would help information gathered to be more efficiently processed and allow some sensors to double up their functions. A parking sensor, for example, could communicate with the steering, brakes and high-definition maps to allow the car to park itself with far greater accuracy than current systems.