BEIJING, December 13 (TMTPost)— Huawei Technologies Ltd is working to boost presence of its smart vehicle technology.

Credit：Visual China

Huawei has enticed Mercedes-Benz and Audi to buy small stakes in its smart software and components company, a move aiming to expand its partnership beyond domestic brands, Reuters reported, citing people with knowledge of the matter. Huawei also wants to introduce foreign investors to help defend the business from potential geopolitical tensions, according tot the report. Two German auto giants didn’t give the same response. Mercedes was offered a 3% to 5% stake and turned down Huawei, saying that it has no interest in the venture and hopes to continue developing in-house software, instead of outsource it to a supplier. It’s uncertain the extent of Audi’s interest. The report said Audi is working with Huawei on a possible partnership to develop self-driving technologies for vehicles in the Chinese market from 2025, and the vehicles would be made in a venture co-founded by the German brand and  FAW Group .

The report came on the heels of Huawei’s major shift from providing technologies to building an open platform for the whole industry. More than two week ago, the state-owned Chongqing Changan Automoile announced it plans to invest in a new company that Huawei plans to build and engage in research and development (R&D), production, sales and service of intelligent automotive systems and component solutions. Huawei plans to integrate its core technologies and resources of the intelligent automotive solution business into the new company, Changan and its affiliates. The plan effectively spins off its Intelligent Automotive Solution (IAS) unit. 

As the first automaker that the new venture plans to reach partnership, Changan plans to invest in it with an up to 40% stake in it and carry out strategic cooperation. The new company will gradually allow investors like existing strategic partners and valuable automobile manufactures to hold its stakes and eventually become a company with diversified equity holders. In the mean time, the new company, as a public platform, will provide intelligent system and component solutions for the intelligent car business. Smart car will be the new company's key customer and Huawei’s partners of the business are also welcome to actively join this open platform.

The new venture is currently positioned as an "intelligent open platform for automobile electrification", which  marks a rare move for a leading auto tech player like Huawei to embrace original equipment manufacturers (OEMs) as their shareholders. Besides partnership with Changan, Huawei will work with more auto companies to continuously explore new models for opening up and win-win results, and jointly seize the opportunities of the electrification and intelligent transformation of the auto industry, said Yu Chengdong, the Chairman of Huawei Intelligent Automotive Solution Business Group. Yu expected more manufacturers and other partners in the auto industry will join in Huawei’s new platform to build better cars.

The venture was reported late November to be set for a valuation of up to RMB250 billion (US$34.67 billion) after sales of stakes to investors including Changan. Huawei could remain the largest single shareholder with a 40% to 50% stake at least in the coming two to three years, and Changan and its parent,China Ordnance Equipment Group--also known as China South Industries Group, are weighing to hold about 35 % and 5 % respectively. Potential minority shareholders such as state-owned FAW Group and Dongfeng Motor are said to be in advanced talks with Huawei to own up to 5% each.

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