Volkswagen is investing 2.4 billion euros ($2.3 billion) in a joint venture with Chinese firm Horizon Robotics, the German auto giant said last week.

The partnership with VW's software arm, Cariad, is intended "to speed up customization of automated driving solutions for the Chinese market," the group said in a statement.

Cariad will hold a 60 percent stake in the new company, with the deal set to close in the first half of 2023.

Together, the companies will develop technology that can integrate numerous functions for autonomous driving onto a single chip that will be available only in China.

Cariad will play an active role in developing the chip technology with Horizon Robotics, and the know-how will be shared across the Volkswagen Group, the carmaker's China chief Ralf Brandstaetter said.

As part of its transition to electric vehicles, Volkswagen has long been investing in China and has already created several joint ventures there, particularly in the field of batteries.

Horizon Robotics, founded in Beijing in 2015, has supplied customers including BYD, Volkswagen's Audi, Continental, Li Auto and SAIC, according to its website.

Investors include carmakers like BYD and Great Wall Motors as well as Intel.

Read more: How China is pushing for autonomous driving

(With input from AFP, Reuters)