Microsoft and Toyota Motor Corp. (TMC) have finalized an agreement to infuse digital capabilities into the Japanese auto maker's cars hosted in the Internet "cloud."

The agreement is aimed at developing cars with advanced technologies, including, navigation, energy management, and other "smart" features for Toyota's next generation vehicles. The software will be developed on Microsoft cloud-computing platform Windows Azure, the two companies said.

Initially, Microsoft and Toyota will inject $12 million (one billion yen) in a Toyota subsidiary devoted to automotive digital information services.

Microsoft Chief Executive Steve Balmer said in a statement, "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. 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 said it expects its cars with "complete global cloud platform" to be commercially available by 2015.

But starting next year, the next generation cars with Internet "cloud" technology will be available as early as next year but limited to electric and plug-in hybrid models.

Currently, the Japanese car maker is conducting tests of a Smart Center which is designed to connect people, homes, and cars in an energy management system using the Internet.

Toyota President Akio Toyoda said in a separate statement, "Creating these more efficient, more environmentally advanced products will be our contribution to society. To achieve this, it is important to develop a new link between vehicles, people and smart center energy-management systems."