(Yicai Global) July 12 -- Shares of Guangzhou Automobile Group surged to a more than three-year high after the carmaker said its unit will join hands with telecoms giant Huawei Technologies to build smart electric vehicles via a CNY788 million (USD121.7 million) project.

GAC Group's stock price [SHA: 601238] jumped 6.7 percent to hit CNY16.90 (USD2.60), the highest since January 2018.

GAC Aion will start mass-producing its first model with Huawei, a medium to large-sized all-electric smart sports utility vehicle AH8, by 2023, the southern Chinese carmaker said in a statement recently. GAC will be responsible for financing the project, it added.

In 2017, GAC penned a technical cooperation deal with the Shenzhen-based tech giant regarding smart electric cars. That year, the carmaker set up a new energy vehicle unit that was later branded as GAC Aion.

Huawei has repeatedly said it has no plans of making cars by itself but it strives to help auto manufacturers build smart vehicles with its software.

Huawei is co-operating with three carmakers to build three sub-brands, according to Rotating Chairman Eric Xu Zhijun. Besides GAC Aion, the other two branding partners are BAIC BJEV's Arcfox and Sokon Industry Group's Seres.

GAC Aion sold more than 43,100 cars in the first half, more than doubled from a year earlier, according to data from the parent.

Editor: Emmi Laine, Xiao Yi