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IBM and French car maker Peugeot SA are working together to develop an Internet-based vehicle diagnostic system, the companies announced in a joint statement Tuesday.

When a car is taken to a Peugeot technician, it will be linked up via the Internet to a central diagnostics server that has knowledge of each vehicle's history.

The server will either be able to identify the problem automatically, or will lead the technician through a series of tests, the companies said. A record will then be kept of the faults and the steps taken to repair them. The system is 'self learning' and will reuse the information when a similar problem arises anywhere else in the world, according to the statement.

The system is expected to reduce warranty costs, labor costs, and the time taken to repair vehicles, the companies said.

About 1.5 million Peugeot cars worldwide will be covered by the service initially, with another 8,000 suitable Peugeot cars being produced every day, the statement said.

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