(Yicai) Dec. 2 -- Shares of Guangzhou Automobile Group soared after the Chinese carmaker said it was stepping up collaboration with Huawei Technologies in a new deal to create a premium smart new energy vehicle brand.

GAC [SHA: 601238] surged by its 10 percent daily trading limit to close at CNY9.72 (USD1.34) a share in Shanghai today, while its Hong Kong-listed stock [HKG: 2238] soared 25 percent to HKD3.73 (48 US cents).

The new brand will leverage GAC and Huawei’s strengths in intelligent connected vehicles and smart manufacturing and will focus on market needs and product competitiveness, the Guangzhou-based company told Yicai. The pair signed the agreement on Nov. 30.

GAC added that the partnership seeks to foster across-the-board collaboration in product development, marketing, and ecosystem services.

At last month’s Guangzhou Auto Show, GAC General Manager Feng Xingya pointed to the close ties between the two. Their cooperation not only deepens technological exchanges but may also expand the scope of cooperation and affect the development strategy of GAC's own brands, he said.

GAC targets annual sales of about two million units for its own brands by 2027, accounting for more than 60 percent of the total. In the first 10 months of this year, GAC's own 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 works with carmakers based on three approaches: vertical parts supplier, intelligent systems provider through the Huawei Inside partnership model, and full-set solutions provider via the Harmony Intelligent Mobility Alliance business model, known as “Smart Selection” model. The third approach has been the most successful to date.

GAC and Huawei’s partnership does not fall under any of the three approaches.

Editor: Futura Costaglione