Embattled German auto giant Volkswagen said Wednesday it is teaming up with South Korea's LG Electronics in the area of "connected cars".

"The Volkswagen group and LG Electronics have signed a memorandum of understanding on joint research and development of a next-generation connected car service platform," the German group said in a statement.

The two companies would work together to develop technologies that enable drivers to control internet-connected devices in their homes -— such as lights, security systems and domestic appliances -— from the driving seat.

The system will also forward context-sensitive notifications and advice to the driver.

VW said it also plans to incorporate LG technology into its in-car entertainment systems.

The German automaker is currently battling an unprecedented scandal after admitting to deliberately undermining emissions tests using software built into its diesel cars.