Shares of Changan Automobile rose by their daily trading limit after the Chinese carmaker confirmed it will establish a smart auto solution joint venture with telecom equipment giant Huawei Technologies.
Changan Auto [SHE: 000625] surged 10 percent to CNY19.56 (USD2.73) a share as of lunch break in Shenzhen today. The stock has soared 20 percent since Nov. 23.
Huawei will set up the JV and inject its technologies, assets, and staff related to the smart auto solutions business, while Changan Auto and relevant parties will own up to 40 percent of the venture, the Chongqing-based company said late yesterday. The pair will further negotiate the investment amount and ratios, it added.
The venture will focus on research and development, production, sales, and services of intelligent auto systems and components, including driving solutions, cockpits, digital platforms, and cloud platforms, Changan Auto pointed out.
On Nov. 23, market rumors circulated online that Huawei intended to spin out its smart auto solutions business unit with a valuation of CNY250 billion (USD35 billion), and Changan Auto was the only carmaker in the consortium of investors.
China needs to build an electrification smart open platform jointly participated by automotive industry players, Richard Yu, chairman of Huawei’s smart auto solutions business group, said at a ceremony for the signing of the deal on Nov. 25. Huawei will further cooperate with Changan Auto, and will also join hands with more strategic auto partners to go on exploring new modes of openness and win-win cooperation, he added.
According to an executive of Huawei, the new venture will open to more carmakers for collaboration.
Seres Group has also received an invitation to invest in the JV, and Huawei’s carmaking partner behind the smart electric vehicle brand Aito welcomes the open smart auto platform formed by the Shenzhen-based firm, it announced late yesterday. Seres is the strategic partner with the most in-depth cooperation with Huawei in the auto business, it stressed.
Huawei has focused on developing auto-smart solutions and has partnered with various carmakers in recent years. Avatr Technology, a JV between Changan Auto and battery giant Contemporary Amperex Technology, uses assisted driving function and smart cockpits provided by the telecom equipment firm on its models. Deepal, a new energy vehicle brand of Changan Auto, also partnered with Huawei in August.
Changan Auto sold 2.1 million units in the first 10 months of this year, up 10.8 percent from a year earlier, according to the latest official figures. Sales of NEVs under its brands skyrocketed 89 percent to 364,081 units.
