China's Huawei said it will move core technologies and resources from its smart car unit, which has chalked up robust sales of new vehicles, to a new joint company owned up to 40% by automaker Changan Auto.
Huawei said in a press release that the new company will engage in the research, development, production, sales and service 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,” the release said.
The equity ratio and the amount of the capital contributed will be negotiated by the two parties, Chongqing Changan Automobile Company said in a filing with the Shenzhen Stock Exchange on Sunday.
“The two parties will jointly support the target company to become a leader in automotive intelligent automotive systems and component solutions based in China,” the filing said.
Huawei managing director and chairman of the smart car solutions unit, Yu Chengdong, said at the signing ceremony in Shenzhen that the smartphone manufacturer would work with more auto firms to "seize the opportunities of electrification and intelligent transformation" in the auto industry, according to the press release.
Huawei has repeatedly said that it does not make cars on its own, but only helps other car automakers make better vehicles.
It has existing partnerships with Changan and other companies including Seres Group. Huawei and Seres jointly produce Aito brand cars, including the M7 model.
Huawei has also built an S7 sedan with Chinese automaker Chery under a new marquee, Luxeed, that it intends to position as a competitor to the Tesla Model S.
Huawei said in October that 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 the top five best-selling new energy vehicle makers in China based on August data.