(Yicai Global) April 3 -- Dongfeng Motor, one of China's biggest state-backed carmakers, is joining hands with telecommunications equipment titan Huawei Technologies to build an Internet of Vehicles spanning Xiangyang city in Hubei province.

The two companies and Xiangyang government penned a CNY3 billion (USD446 million) framework deal for the project, named Xiangyang Smart Travel, yesterday. It will include four sub-projects: smart car valley, smart travel, smart logistics and smart transport cloud platform.

Industry researchers forecast China's networked intelligent vehicle market will be worth CNY100 billion (USD15 billion) by 2020, which is luring in many major carmakers, internet-focused companies and city governments to battle for a slice of the pie.

The trio in Xiangyang plan to build a digitized test track at first, before turning this into a virtual test track and then creating an autonomous driving demonstration zone. This will be a full-fledged smart vehicle ecosystem covering development, production, testing and supporting services to attract up- and downstream companies to the city and complete the smart car valley project.

Dongfeng will provide its automotive research and development and manufacturing to the table, while Huawei offers its cloud computing, big data, Internet of Things technology, fifth-generation wireless networks and artificial intelligence. Xiangyang is already renowned for its vehicle production and testing.

The firms also plan to start commercial operation of an intelligent vehicle network in Xiangyang, which will integrate cars, charging, parking and recovery services.

Editor: James Boynton