Microsoft and Siemens will join forces to develop in-car entertainment and navigation products that should make it easier for consumers to connect devices such mobile phones and music players.
The two companies said on Friday the first Siemens products based on Microsoft software should go into production in 2009.
Siemens automotive unit VDO said using the Microsoft Auto platform would give it more room to concentrate on its core competencies.
Siemens VDO also makes driver-assistance and safety systems.
"In addition, Siemens VDO will also be able to actively help shape Microsoft Auto and license platform-compliant applications, such as navigation functions, for third-party suppliers," a joint statement from the two companies said.
The companies said their first milestone would be a multimedia platform that would make it possible to integrate consumer-electronic functions and portable devices.