(Yicai) Aug. 20 -- Avatr Technology, the smart electric vehicle brand of Changan Automobile, will pay CNY11.5 billion (USD1.6 billion) for 10 percent of Huawei Technologies’ intelligent driving unit, marking a significant step in Huawei's strategy to advance electric and smart vehicle technologies through partnerships with major carmakers.

Avatr’s acquisition of the minority stake in Huawei’s Yinwang Intelligent Technology was approved by Changan Auto's board yesterday, the Chongqing-based parent company announced late the same day.

The deal is an important step in Huawei's efforts to introduce car-making partners to Yinwang, which was set up in January to provide intelligent driving solutions and make smart auto cockpits, controls, cloud platforms, lighting systems, and vehicle-mounted equipment. Seres Group, another car production partner of Huawei, said last month that it would acquire 10 percent of the unit.

Shares of Changan Auto [SHE: 000625] fell 4.5 percent to CNY12.42 (USD1.74) each as of lunch break in Shenzhen today. The Shenzhen Component Index fell 1.2 percent.

Changan Auto inked a deal with Shenzhen-based Huawei to invest in the yet-to-be-established Yinwang last November. In may, it said the final agreement would be signed by Aug. 31.

“China needs to create an electric and intelligent open platform that is jointly participated in by the auto industry and has a new technology development leader,” Richard Yu, chairman of Huawei's auto business unit, said after the initial deal was penned.

“We'll also work with more strategic partners in the car-making field to continuously explore new models to achieve openness and win-win results and jointly seize opportunities from the electric and intelligent transformation of the auto industry,” he noted.

Huawei has become a leader in developing smart car technologies and has said time and again that it will provide intelligent connected auto tech to its vehicle manufacturing partners rather than making them itself, while helping the automakers to make and sell high-quality products.

Changan Auto is Avatr’s largest shareholder, with a 41 percent stake. Chinese power battery giant Contemporary Amperex Technology is next, with 14.1 percent. The joint venture has launched several models using the CHN architecture, a smart vehicle platform co-developed by Changan Auto, Huawei, and CATL.

Editor: Martin Kadiev