In major news for the global automotive industry, Changan Automobile and tech giant Huawei have once again joined forces for another venture.
In a statement to the Shenzhen Stock Exchange, Changan announced that it has signed a memorandum of cooperation with Huawei to invest in a new company that would design and produce intelligent automotive systems and components.
The company would be established by the tech giant, while the automotive giant would acquire a stake of up to 40% in it. Changan hoped that the joint venture with Huawei would help it transform into a low-carbon, smart transportation technology company.
This isn’t the first time that the two companies have teamed up, as they are already engaged in the Avatr brand, having introduced two vehicles, the Avatr 11 and Avatr 12. However, the signing of the recent memorandum of cooperation marks the first time that Huawei got involved financially.
Previously, the tech giant was providing technology through its automotive division. As part of the collaboration, Huawei will set up a company, focusing on research and development, as well as the production of smart driving systems and components.
The company’s business scope has been described as “comprehensive and forward-thinking” as it will be involved in a wide range of areas within the automotive industry, including automotive smart driving solutions, smart cockpits, smart car digital platforms, smart car clouds, AR-HUD (Augmented Reality Head-Up Display), and smart car lighting systems.
Additionally, Huawei is expected to integrate its key technologies and resources in smart car solutions into this venture. It is pertinent to mention that the signing of a memorandum of cooperation serves as the initial expression of intent.
The transaction details, encompassing formal agreements such as an equity purchase agreement and a shareholders’ agreement, are expected to be finalized in the next six months.