US-sanctioned Huawei forms smart-vehicle joint venture with state-owned Changan Automobile amid effort to diversify business
- The new venture will absorb Huawei’s smart-car system business, with Changan Automobile holding up to 40 per cent of the equity
- Huawei says it is open to selling equity in the venture to other partners in the car industry, with Seres saying it has been invited to invest
Huawei Technologies has surprised the Chinese electric vehicle (EV) industry with a new joint venture, as the US-sanctioned telecommunications equipment giant makes a deeper foray into the car business to diversify its revenue sources.
Huawei has repeatedly played down suggestions that it plans to manufacture its own vehicles, describing itself as just a partner to carmakers, including in its current project with Seres Group. But the Shenzhen-based company on Sunday night said it had signed a memorandum of cooperation with Changan Automobile, a major state-owned carmaker based in the southwestern city Chongqing.
The move marks a solid step by Huawei towards establishing a smart-vehicle operation.
Under the partnership, Huawei said it plans to transfer its smart-car system business to a new unit with investments from Changan Automobile and “integrate the core technologies and resources of [Huawei’s] smart car solutions into the new company”.
With Changan Automobile expected to hold up to 40 per cent of equity in the venture, it appears that Huawei could play the leading role in the project, which will cover “research and development, production and sales of smart-vehicle systems and components”.