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OSAKA, Japan—Panasonic Corp.'s automotive unit said Friday that it plans to invest up to $3.6 billion over the next two years in pursuit of new technologies as part of its drive to become a major supplier for cars of the future.

The Osaka-based company said it is considering acquiring or collaborating with companies that could help supplement its existing technologies in areas such as auto sensors and artificial intelligence. It said it could spend ¥ 300 billion to ¥ 400 billion.

The move comes as global technology companies race to capitalize on the computerization of the automobile, including through autonomous driving.

Yoshio Ito, president of Panasonic's automotive business, said the company will aim for ¥ 2 trillion in sales, a 16% increase from the 2015 financial year that ended in March, in the division by 2018. The division reported lower revenue and profit for the just-ended year.

"We want to make 2016 a comeback year," Mr. Ito said. "We will keep investing in growth areas."

The parent company sees the auto division as a significant driver of its future growth.

Panasonic provides nearly all of the batteries used to power Tesla Motors Inc.'s electric vehicles. It is also developing advanced driver-assistance systems that use sensors to gather information to help drivers identify obstacles, and an Internet-connected "e-cockpit" that will integrate functions ranging from navigation to air-conditioning.

Panasonic and Tesla are jointly building an advanced battery factory in Nevada that will cost up to $5 billion. Panasonic said in January that it would spend up to $1.6 billion to build the factory.

Tesla CEO Elon Musk this month said he would seek to reach annual production of 500,000 new cars by 2018, two years earlier than previously targeted. It plans to produce one million vehicles by 2020, bolstered by the coming Model 3 mass-market vehicle, Mr. Musk said.

About 400,000 preorders for the Model 3 have already been received, pressing Panasonic to speed up production.

(END) Dow Jones Newswires

May 20, 2016 08:05 ET (12:05 GMT)

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