Through fitness-tracking smartphone apps, such as Strava, Volvo's cloud infrastructure is constantly updated about the location of the cyclist. Similarly compatible internet-connected Volvos will also keep the cloud informed about their coordinates.
If the system detects a high possibility of an accident, it will alert the cyclist via a light built into the helmet, with the driver of the Volvo is alerted via the car's head-up display.
Volvo believes that this technology is particularly well suited to alerting drivers and cyclists who can't see each other due to blind spots caused by bends in the road, other road vehicles or poor visibility at night.
The three Swedish companies hope that the technology, which they will demonstrate in Las Vegas in January, will eventually help to cut down the number of collisions between cyclists and cars.
According to Volvo, nearly 50,000 cyclists are injured or killed annually in the USA, and 50 per cent of cyclists killed in the EU were involved in a collision with a car. British statistics also indicate the number of serious injuries suffered by cyclists has increased by 31 per cent between 2009 and 2013.