TM Toyota Motor Corporation

General Motors Co. on Friday said it is buying Cruise Automation Inc., a Silicon Valley startup that could help the auto maker speed its development of autonomous technology and give it an edge over companies looking to introduce driverless cars.

The venture-backed Cruise, founded in 2013, is one of a handful of companies with a permit from the California Department of Motor Vehicles to test autonomous vehicles on the road. The company is testing near its home base in San Francisco and has raised about $20 million in venture capital.

Bolstered by record U.S. auto sales and looking to broaden its business beyond producing and selling conventional car and trucks, GM has acquired or invested in a handful of new technologies. It invested $500 million to partner with Lyft Inc., a ride-sharing service, and purchased assets from Sidecar Technologies Inc. to help an effort to create its own car-sharing service.

The auto giant's efforts follow a broader industry push to prepare for shifts in consumer behavior. As cars become more automated and younger people delay getting licenses or move to urban centers, car companies expect car sharing, ride-hailing services and autonomous cars to be in greater demand.

Separately, Ford Motor Co. on Friday said it would establish a new unit focused on autonomous-car development and other mobility solutions, such as car-sharing and on-demand rides.

Jim Hackett, a longtime chief executive at furniture maker Steelcase Inc. and recent Ford board member, will head up the new unit as chairman. The subsidiary, Ford Smart Mobility LLC, will have operations in Silicon Valley and Ford's headquarters in Dearborn, Mich., ​and will report profits and losses independently from other business lines.

Terms of GM's purchase of Cruise weren't disclosed. GM gradually has been introducing semiautonomous features on vehicles, such as lane-keeping assist and adaptive cruise control. A new hands-free driving system, dubbed Super Cruise, debuts on Cadillac models next year.

Cruise has developed systems that take autonomous vehicles further. It initially made a product called RP-1, a retrofit that enabled late-model Audi vehicles to run on autopilot at highway speeds capability. Cruise planned to sell a limited number of systems for $10,000.

In an interview, GM President Dan Ammann said the Cruise acquisition provides the talent needed to develop vehicles with fully autonomous capability. He said further major acquisitions are less likely now that GM owns Cruise.

GM is planning to make Cruise an independent unit within in its autonomous vehicles development team and will recruit people to expand the team.

"We think this capability is critical to where we want to be in the future," Mr. Ammann said. "The Cruise team has demonstrated a very deep capability in this area…which should significantly accelerate our overall deployment of autonomous vehicles."

Cruise founder Kyle Vogt said he started the company in 2013 with a goal of using autonomous technology to make transportation safer and more accessible. By tying up with the manufacturing experience and resources of GM, his company's software should allow Cruise to achieve its goal sooner, he said.

The Cruise unit will remain in San Francisco so it can continue to develop its autonomous driving software as quickly as possible. He said the entire Cruise team, about 40 people, will join GM, but he wouldn't comment on whether he has made a commitment to stay with GM for a specific time period.

"It's very clear to people in this space that a company like Cruise with resources of company like GM presents a very compelling opportunity and clear statement that we intend to move quickly and want to win this space," Mr. Vogt said.

While autonomous vehicles have long been under development, plenty of kinks remain. The Obama administration is considering allocating $4 billion to advance driverless-car development over a decade, and several auto makers and companies not traditionally associated with the industry are investing big portions of research budget to speed the technology.

Alphabet Inc.'s Google plans to sell fully autonomous cars in coming years through its Google X project. The software maker has had a series of near-miss accidents and has reported crashes on public roads in testing. It has been fighting to clarify regulations for driverless technologies and prevent states from erecting roadblocks.

In January, a driver working for Cruise got in an accident in an autonomous Nissan Leaf Cruise had retrofitted with its own technology. The accident, caused by the driver, happened on a San Francisco street and occurred after the driver took control of the autonomous car and hit a parked car.

GM's announcement comes two days after Toyota Motor Corp. disclosed hiring the entire staff of Cambridge, Mass.-based Jaybridge Robotics Inc., a company providing technology for autonomous tractors and mining equipment. The so-called "acqui-hire" has become an expedient way for auto companies to gain hard-to-get talent.

Christina Rogers contributed to this article.

Write to Gautham Nagesh at gautham.nagesh@wsj.com and Mike Ramsey at michael.ramsey@wsj.com

(END) Dow Jones Newswires

March 11, 2016 12:55 ET (17:55 GMT)

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