(Yicai Global) June 16 -- Chinese conglomerate Baoneng Group's new energy vehicle affiliate will form a new upscale car brand and set up its headquarters in Guangzhou after receiving an investment of CNY12 billion (USD1.9 billion) from a local state-controlled enterprise.

The parent of Baoneng New Energy Vehicle Group and Guangzhou Development District Holding Group penned a strategic cooperation agreement and the NEV maker will establish its HQ at an industrial park in the southern city to integrate research and development with manufacturing, the Shenzhen-based firm said in a statement yesterday. 

Baoneng NEV will unveil a new high-end electric car brand in October and the first model will be a sport utility vehicle, according to the same statement.

The financial services conglomerate made its foray into the auto sector by acquiring a majority stake in Jiangsu province-based vehicle firm Qoros Auto in 2017. That year, the parent started building an electric vehicle manufacturing base in the above-mentioned industrial park. But the project was put on hold amid tightening government scrutiny late last year. 

The parent also has some plans for Qoros. The car firm will launch its Qoros REV3 in August and REV5 in September, and the two models come with extended ranges due to a new technology developed by the group, Baoneng added in yesterday's statement.

After the change of ownership caused an initial surge, Qoros has been reporting sliding sales. Last year, the number of sold cars fell 33 percent to 146,000 units from 2019, the 21st Century Business Herald reported, citing an earnings report. In 2018, sales had jumped more than four times, mostly driven by demand stemming from Baoneng's car rental unit.

Editors: Dou Shicong, Emmi Laine, Xiao Yi