Huawei and Changan join forces in the race for automotive innovation

Chongqing Changan Automobile has embarked on a new journey towards automotive innovation, forging a partnership with tech giant Huawei that aims to revolutionize the smart driving systems and components industry. In a memorandum of understanding (MoU) signed on November 25 in Shenzhen, Guangdong province, Changan and Huawei laid the groundwork for a joint venture that has the potential to reshape the automotive landscape.

This isn't the first time the two companies have worked together. They both are involved in the Avatr brand with two vehicles - the Avatr 11 and Avatr 12 - already making their mark in the world's busiest EV market. But this is the very first time that Huawei actually becomes financially involved, rather than just supplying technology through its automotive division.

Huawei, renowned for its cutting-edge technology, will establish a company dedicated to research and development, as well as the production of smart driving systems and components. This venture is a testament to Huawei's commitment to the automotive industry and its vision for a smart, interconnected future. Changan will be a significant stakeholder in this endeavor, with plans to acquire up to 40 percent of the new company's equity.

The primary goal of this new company is nothing short of ambitious - it aspires to become a world-class leader in the automotive intelligent driving system and component industry. More than just a player in the market, it aims to serve as an open platform, welcoming equity investments from strategic partners within the automotive industry. This move underscores the commitment of both Changan and Huawei to drive innovation and foster collaboration in the automotive sector.

The partnership between Changan and Huawei holds the potential to accelerate the development of full-stack intelligent capabilities. This transformation will catapult Changan from a traditional automaker into an intelligent, low-carbon mobility technology company. With a focus on innovation, this joint venture has an ambitious goal - to revolutionize the way we perceive and experience driving.

The new company's business scope is comprehensive and forward-thinking, encompassing 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. Huawei plans to integrate its core technologies and resources related to smart car solutions into this venture, further solidifying its position as an automotive tech innovator.

It's important to note that the memorandum of cooperation serves as an initial intent, and both parties plan to finalize the transaction details within six months. This will include formal agreements such as an equity purchase agreement and a shareholders' agreement.

As a side note, this development comes on the heels of rumors about Huawei's potential divestment from its automotive business unit. Speculations have circulated about Huawei's intentions to allow its automotive arm to operate independently, potentially becoming a new Tier 1 parts giant. Changan's involvement in this venture, particularly its acquisition of a 15 percent stake in Huawei's automotive business unit, adds another layer of intrigue to the story.

The partnership between Changan and Huawei holds immense promise for the automotive industry. As the two companies embark on this journey to reshape the future of smart driving systems and components, we can expect groundbreaking innovations and significant advancements in automotive technology - and we can expect them soon.

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