(Yicai) Dec. 13 -- Avatr Technology, the smart electric vehicle brand of Changan Automobile, has reached an agreement with tech giant Huawei Technologies to strengthen their ties in intelligent autos.

Avatr and Huawei will deepen their partnership in new product development, marketing, and ecosystem services, including advanced driving technologies and smart car solutions, the former announced yesterday, citing a deal the pair inked on the same day. The tie-up will retain the Huawei Inside model, with the carmaker leading new product development, but include the tech firm in marketing activities, it added.

Huawei collaborates with automakers using three models: traditional, where it only provides vendors with smart parts, and Huawei Inside and Harmony Intelligent Mobility Alliance, where it participates in other aspects, including car definition, research, development, and marketing.

The new agreement will upgrade the partnership between Huawei and Avatr to a mix of the Huawei Inside and HIMA models, compared to just the Huawei Inside model.

The Avatr 06, which will launch in the second quarter of next year, might be the first product released under the new partnership, a source close to Avatr told Yicai, adding that Huawei will likely take part in relevant marketing events.

Avatr likely aims to improve sales and operational quality by strengthening its ties with Huawei after racking up a net loss of CNY7.1 billion (USD975.4 million) between 2022 and the first half of this year, with a debt ratio of 94 percent. It sold 29,000 cars in the six months ended June 30.

Last month, Avatr announced plans to go public in 2026, with a target to sell more than 220,000 autos next year and breakeven in the third or fourth quarter of 2025.

Seres Group, the first carmaker to partner with Huawei under the HIMA model, has seen strong growth recently. Its sales surged 349 percent to 201,000 new energy vehicles in the first half of this year from a year earlier, while its revenue soared 490 percent to CNY65 billion (USD8.9 billion).

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. In August, Avatr paid CNY11.5 billion (USD1.6 billion) for 10 percent of Yinwang Intelligent Technology, making it the first automaker to invest in Huawei's intelligent driving unit.

Formed by Shenzhen-based Huawei in January, Yinwang focuses on providing intelligent driving solutions and making smart auto cockpits, controls, cloud platforms, lighting systems, and vehicle-mounted equipment.

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 production partners rather than making them itself, while helping the automakers to make and sell high-quality products.

Editors: Tang Shihua, Martin Kadiev