FRANKFURT - German car giants BMW and Mercedes-Benz maker Daimler are banding together to catch up with American and Chinese competitors, with new cooperation on multiple fronts including electric cars and self-driving technology.

Munich-based BMW and Stuttgart's Daimler have been locked for years in a close race to top sales charts in the global luxury car market.

But on Thursday, the groups said they would work together to develop automated driving and driver-assistance systems.

The plan will first focus on the so-called Level 3 and Level 4 systems in an internationally recognized scale for automated driving.

For now, they will stop short of Level 5 - which would see the computer take over completely from the driver.

Rather, the hoped-for technology will offer driving and parking assistance and limited autonomy on highways. "Instead of individual, standalone solutions, we want to develop a reliable overall system," said Daimler board member Ola Kallenius, who is set to take over from departing chief executive Dieter Zetsche in May.

Only a week before, the groups announced a 1 billion euro ($1.14 billion) investment in combining their carsharing and other apps into a joint scheme.

In the future, some 60 million users of 14 separate apps will be able to book short-term rentals, parking spots and electric charging points, taxi and chauffeur hailing and journey planning via the joint suite of services.

Such unprecedented partnerships "show how even one-time rivals see a pressing problem" in amassing the mammoth funds and expertise needed to meet challenges in the car industry, expert Stefan Bratzel of Germany's Center for Automotive Management told AFP.

"Different universes" are meeting as traditional carmakers find high-tech firms like Google or Alibaba, mobility services firms like Uber and Didi and even telecoms firms racing to set industry-wide standards.

In the new environment, companies "are forced to cooperate", Bratzel said.

"Otherwise you just can't tackle certain questions" that bind together different technologies, he added.

BMW works with Intel and Fiat on self-driving cars, while Daimler has linked up with components supplier Bosch, aiming to test highly autonomous vehicles this year in the United States. "Being open to alliances to share the burden of investments is an economic necessity," said Bosch chief executive Volkmar Denner last month.

On Thursday, BMW and Daimler said "other technology companies and automotive manufacturers" could be invited aboard their self-driving scheme in future, while existing schemes would not be affected.

Germany's biggest carmaker, Volkswagen, has been notable by its absence from the flurry of alliances on new technology within the country's car industry.

Rumors of a broader partnership taking in VW, BMW, Daimler, Bosch and components builder Continental have yet to materialize.

And this week, the Wall Street Journal reported Wolfsburg-based Volkswagen was close to a deal on autonomous driving with Ford, after the two groups agreed in January to build vans together.

For now the Wolfsburg-based behemoth has partnered with Aurora, a startup manned by former Google, Tesla and Uber executives.

It has secured financing from Amazon. The names of Silicon Valley tech titans are tied closely to autonomous driving as they look to challenge car companies on their own turf.

AFP