(Yicai) March 20 -- Guangzhou Automobile Group has established a subsidiary to launch a new luxury vehicle brand in collaboration with Huawei Technologies, using the tech giant's smart driving software and business development model throughout the process, from design to sales.

GAC invested CNY1.5 billion (USD207.5 million) to set up wholly owned Huawang Automotive Technology Guangzhou, the carmaker announced on WeChat on March 18, adding that GAC aims to become one of the world's leaders in smart driving tech by 2027.

The first model under the new Huawang brand will be a luxury intelligent new energy vehicle priced at around CNY300,000 (USD41,490), a source at GAC told Yicai.

Huawang Auto's vehicles will be equipped with Huawei's solutions, including smart driving, intelligent cockpit, and smart vehicle controls, the insider noted. In addition, the unit will integrate Huawei's expertise across the entire value chain, from product development and marketing to ecosystem services, the person added.

GAC and Huawei will adopt a new deeper and more innovative cooperation model with Huawang Auto compared with the usual Smart Selection model, the insider said. Staff from GAC and Huawei's auto business unit have already started working in shared offices on co-developing new intelligent models, the person added.

GAC’s shares [SHA: 601238] added 1.5 percent to closet at CNY8.75 (USD1.21) in Shanghai today. The stock has lost more than 6 percent in value since the end of last year.

Huawei has reiterated many times that it will not make cars itself. The Shenzhen-based firm instead forms three types of partnership with carmakers, as vertical parts supplier, intelligent systems supplier via Huawei Inside, or full-set solutions supplier through Huawei Smart Selection. 

Intelligent driving is sweeping through China’s auto industry. Over the past two months alone, more than 10 automakers have announced plans to achieve full intelligent driving this year.

Partnering with tech firms such as Huawei and Momenta Global enables traditional automakers to embrace intelligent transformation and stay competitive. Companies like GAC and Changan Automobile have forged strong collaborations with Huawei, whose smart driving technology is now featured in over 15 high-end models across 11 brands.

Editors: Tang Shihua, Martin Kadiev