(Yicai) Dec. 2 -- Shares of Guangzhou Automobile Group soared after the Chinese automaker said it deepened its collaboration with Huawei Technologies.

GAC [SHA: 601238] surged by the 10 percent exchange-imposed daily trading limit to CNY9.72 (USD1.34) as of lunch break in Shanghai today. Its Hong Kong-listed stock [HKG: 2238] jumped 22.5 percent to HKD3.65 (47 US dollars).

GAC will launch a new premium smart electric vehicle brand in collaboration with Huawei in addition to its existing Trumpchi, Aion, and Hyptec EV marques, according to an agreement the pair signed in Guangzhou on Nov. 30.

The new brand will leverage the companies' strengths in intelligent connected vehicles and smart manufacturing and focus on market demand and product competitiveness, the Guangzhou-based carmaker told Yicai. Huawei's smart and electrification solutions will be the foundation for deeper collaboration in product development, marketing, and ecological services, GAC added.

GAC's General Manager Feng Xingya mentioned the new agreement with Huawei at the Guangzhou Auto Show that was held in the southern Chinese city between Nov. 15 and Nov. 24.

Feng then stressed the importance of the partnership between GAC and Huawei. He also mentioned that the new agreement would deepen the technological exchange between the two firms and expand the scope of their collaboration, which would influence the development strategy of GAC's own brands.

GAC hopes for its own brands to achieve annual sales of about two million units by 2027, accounting for over 60 percent of the total. In the first 10 months of this year, GAC's self-owned brands sold 577,000 cars, making up nearly 38 percent of the total.

SAIC Motor's former Chairman Chen Hong once said that allowing suppliers to provide an overall solution for the company would be like "selling its soul." In response to this comment, Feng noted that GAC welcomes that approach and does not consider it a threat.

Huawei's Intelligent Automotive Solutions Business Unit cooperates with carmakers based on three approaches: vertical parts supplier, intelligent systems provider through the Huawei Inside partnership model, known as “Smart Selection” model.  Among them, the third has been the most successful so far. 

The collaboration between GAC and Huawei does not fall under any of the three approaches.

Editor: Futura Costaglione