Chongqing - Changan Auto, a prominent Chinese automotive company headquartered in Chongqing, and Huawei, China's tech leader, have inked an investment cooperation memorandum in Shenzhen on November 26. This strategic alliance marks a significant step in the smart automotive industry.

Huawei will establish a new company focusing on smart driving systems and incremental parts, encompassing research and development, production, sales, and services. Changan Auto has been invited to invest in this venture, aligning its future with Huawei's innovative pursuits.

The memorandum outlines Huawei's plan to integrate its core technologies and resources from its Intelligent Automotive Solution business into the new company. Changan Auto and its affiliates intend to invest in this venture, supporting its growth and development. 

This move counters earlier rumors about Huawei selling its car business unit, clarifying that Huawei intends to spin off this unit into an independent entity for further expansion.

The new smart driving company will operate independently, adopting market-based management and incentive frameworks. It will gradually open its equity to existing strategic partners and other investors with strategic value, evolving into a diversified ownership structure.

Huawei's Rotating Chairman, Xu Zhijun, emphasized that while Huawei will not manufacture cars directly, it will leverage its information and communications technology prowess and marketing capabilities to aid automakers in producing and selling high-quality vehicles. 

Yu Chengdong, Huawei's Executive Director and President of Huawei's Car Business Unit (Car BU), highlighted the need for China to create an open, collaborative platform for the electrification and smart transformation of the auto industry, with more strategic partners expected to join the new company.

Changan Auto plans to secure no more than a 40% stake in the new company. Details such as the company's registered location, share ratios, investment amounts, and timelines are still under discussion.

Zhu Huarong, Chairman of Changan Automo, stated that this deep collaboration with Huawei would accelerate the large-scale commercialization of smart automotive technologies and propel the Chinese smart car industry towards scalability, intensification, and shared development.

Changan has already deeply collaborated with Huawei on smart driving technologies, involving its Avatr and Deepal brands. This collaboration is expected to accelerate Changan's comprehensive intelligent vehicle capabilities development and hasten its transformation into a smart, low-carbon mobility technology company.

According to sources from Caixin's report, the new company's main assets and team will be derived from Huawei's Car BU team, which was established in 2019. This unit has been pivotal in Huawei's smart car technology initiatives, providing technical support services to many automakers without directly engaging in car manufacturing.

Another Chongqing-based automotive company deeply involved with Huawei, Seres, also announced receiving an invitation to co-invest in the new smart driving company. Since the launch of the Seres-Huawei co-developed M7 model on September 12, the model has achieved an impressive pre-order sales volume of over 90,000 units in just two months, a testament to the market's strong response to this collaboration.