VW sets up cybersecurity firm with ex-Israeli spy chief

The new company, CyMotive Technologies, will be 40 percent owned by the German automaker and 60 percent by Yuval Diskin and two former colleagues who also had senior posts in the Shin Bet.

The statement did not say how much Volkswagen would invest in the venture, which has an office in a suburb of Tel Aviv and will also open one in Wolfsburg, Germany.

Building on its expertise in technology, Israel has emerged as a leader in the race to keep cars secure and prevent the nightmare scenario of a hacker commandeering your vehicle.

International groups including Harman International Industries and IBM have already bought local companies or invested in research centers.

"To enable us to tackle the enormous challenges of the next decade, we need to expand our know-how in cybersecurity in order to systematically advance vehicle cyber security for our customers," said Volkmar Tanneberger, head of electrical and electronic development at Volkswagen.

Diskin has been consulting on cybersecurity in the private sector since retiring from the Shin Bet in 2011 and will serve as CyMotive's chairman.