Microsoft and Toyota Motor Corp. announced they will work together to infuse the Japanese auto maker’s cars with digital capabilities hosted in the internet “cloud”.

Microsoft and Toyota planned to jointly invest $12 million in a Toyota subsidiary devoted to automotive digital information services.

Navigation, energy management, and other “smart” features in the next generation of Toyota vehicles were to be built on Microsoft cloud-computing platform Windows Azure.

“Today’s announcement... is a great example of how we continue to invest in the automotive industry and of our commitment to power the services that are important to consumers,” said Microsoft chief executive officer Steve Ballmer.

“It further validates the power of the cloud, as the Windows Azure platform will provide the enterprise-grade, scalable platform that TMC needs to deliver telematics in its automobiles worldwide.”

Toyota cars tapping into computer services hosted by Microsoft in the internet “cloud” were to be electric and plug-in hybrid models to hit roads next year.

Toyota expected to have a “complete global cloud platform” in place by 2015.

The company is conducting tests in Japan of a Smart Centre intended to connect people, homes and cars in an energy management system using internet technologies.

“Creating these more efficient, more environmentally advanced products will be our contribution to society,” TMC president Akio Toyoda said in a release.

“To achieve this, it is important to develop a new link between vehicles, people and smart centre energy-management systems.”