By Tracy Qu
State-owned Dongfeng Automobile has experienced a third consecutive day of stock gains, following a new partnership with Chinese telecom giant Huawei Technologies.
On Wednesday, shares closed 6.1% higher, bringing this week's gains to 20%. This positive performance sets Dongfeng apart from the broader equities market in China, which has had a negative start to the year.
The surge in share value began on Monday when Wuhan-based Dongfeng announced that its new-energy vehicle arm, Voyah, had reached an agreement to incorporate Huawei technology and components into its vehicles.
Analysts Wang Dean and Wang Genhai from Ping An Securities expressed optimism about the collaboration, likening it to the partnership between Huawei, EV brand Avatr Technology, and battery maker CATL. In a research note, they referred to the collaboration as a "strong alliance."
Voyah, under the Dongfeng umbrella, delivered 50,552 vehicles in 2023. Although this is only a third of what rival EV maker NIO achieved, Voyah plans to double its deliveries in 2024.
Huawei has been actively seeking increased involvement in China's car industry. In November, it announced a joint venture with state-run Changan to focus on autonomous driving, digital platforms, and other advanced automotive systems.
China boasts one of the world's fastest-growing EV markets, with EV penetration projected to reach 40% of the country's auto market by 2024. Chinese brands currently dominate with a commanding 78% market share, according to research firm Canalys.