Huawei will move its core smart car technologies to a new joint company owned up to 40% by Changan Auto.
China’s Huawei (HWT.UL) announced on Sunday that it will transfer key technologies and resources from its smart car division, which has had strong sales for many new models, to a new joint venture that Changan Auto, a carmaker, will control up to 40% of.
According to a statement from Huawei, the new business will work on the creation, manufacturing, marketing, and servicing of intelligent automotive systems and component solutions.
“The new company will work with partners to promote innovation and leadership in smart car technology and promote the prosperity and development of the automotive industry,” stated the press.
The parties will negotiate the equity ratio and capital contribution amount, according to a filing made on Sunday by Chongqing Changan Automobile (000625.SZ) with the Shenzhen Stock Exchange.
“The two parties will jointly support the target company to become an industry leader in automotive intelligent systems and component solutions based in China,” according to the filing.
Huawei managing director and chairman of the smart car solutions unit, Yu Chengdong, said at a signing ceremony in Shenzhen that the smartphone manufacturer would work with more auto firms to “seize the opportunities of the electrification and intelligent transformation of the auto industry,” the press release said.
Huawei has repeatedly said it does not make cars on its own but only helps other automakers make better vehicles.
It has an existing partnership with Changan as well as other companies, including Seres Group (601127.SS). Huawei and Seres jointly produce Aito-branded cars, including the M7 model.
Huawei has also built the S7 sedan with Chinese automaker Chery under a new marquee, Luxeed, that it intends to position as a competitor to Tesla’s Model S.
Huawei said in October it had received more than 50,000 orders for its revamped M7 model during the first 25 days of sales, which would put Aito among China’s five top-selling new energy vehicle manufacturers based on August data.
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