Chinese carmaker Guangzhou Automobile Group plans to establish a project company to develop a new auto marque in collaboration with Chinese telecoms giant Huawei Technologies.

With a registered capital of CNY1.5 billion (USD204.6 million), GAC’s new firm will create a brand based on an entirely new structure that will release a series of intelligent vehicle models co-developed with Huawei, the Guangzhou-based firm announced on Jan. 10.

GAC and Huawei signed an agreement on Nov. 30 to step up collaboration and create a new premium new energy vehicle brand that will leverage the pair’s strengths in intelligent connected vehicles and smart manufacturing and focus on market needs and product competitiveness.

The partnership will be a full-stack one covering all product stages, from manufacturing to sales and user ecosystem creation, GAC’s General Manager Feng Xingya said at the time.

The two companies have already begun joint operations, with their first luxury, intelligent NEV model expected to be priced at around CNY300,000 (USD40,920), Securities Daily reported.

On Jan. 10, GAC also released its earnings forecast for last year. The firm expects its net profit to have shrunk 73 percent to 82 percent to between CNY800 million and CNY1.2 billion (USD109 million and USD164 million), mainly because of the intense price competition that resulted in a decline in sales.

To ease market pressures, GAC allocated about CNY18 billion (USD2.5 billion) in additional sales subsidies throughout last year, resulting in a drop in overall net profit, the company explained.

GAC’s shares [SHA: 601238] were trading up 1 percent at CNY8.35 (USD1.14) apiece as of 2.05 p.m. in Shanghai today. Its Hong Kong-listed stock [HKG: 2238] fell 0.7 percent to HKD2.98 (38 US cents).