Toyota Motor and EV battery supplier Panasonic plan to establish a joint company to develop connected services to be used in homes and urban development, a media report said.

Reuters noted the tie-up deepens the partnership between the companies which last January announced a joint venture to build electric vehicle (EV) batteries, combining R&D and manufacturing strengths of one of the world's largest automakers and battery makers to compete in the fast growing EV sector.

This latest venture will see Toyota and Panasonic set up a new company early in 2020 to focus on technology that could be used to offer personalised home services. The pair plan to be 50-50 partners in the new company and will increase cooperation at their respective housing operations in Japan.

Toyota has long produced kitset housing separately from its automotive operations.

"We will put our respective strengths together to offer new value in everyday life," Panasonic president Kazuhiro Tsuga said in a joint statement cited by the news agency.

The advent of lower emissions vehicles and ride sharing services have opened up the auto industry to new competitors, leaving traditional car makers and suppliers scrambling to find alternate revenue streams, Reuters noted.

Toyota has been developing connected cars that can share information on usage – data that could be leveraged for on demand ride sharing, insurance and maintenance.

The automaker has said it would use its partner network and operations which range from building and selling cars, homes and companion robots to expand into new transport and home energy services.

"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," president Akio Toyoda told Reuters.

"In addition to cars, I think that having our own housing business and connected business will be a big advantage for us."