Chinese ride hailing company Didi Chuxing has entered into a strategic partnership with local carmaker BAIC Group, according to local reports.
BAIC has manufacturing JVs in China with Mercedes-Benz and Hyundai.
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The Didi Chuxing and BAIC have agreed to jointly develop high tech, customised self driving vehicles through "in-depth cooperation in automobile technologies and artificial intelligence" which they will apply to ride sharing vehicles.
The Chinese government is driving the pace of development of smart connected vehicles with substantial funds made available to invest in supporting roadside infrastructure.
China is looking to take the global lead in connected and autonomous vehicle technology, as well as electric vehicle technology.
Didi Chuxing and BAIC Group plan to focus on developing and commercialising Level 4 autonomous driving technology with which cars can drive themselves in most conditions without human input.
This latest agreement deepens ab existing partnership between the two companies after they established a joint venture earlier this year to promote the development of new energy vehicles.
Didi Chuxing is currently testing autonomous vehicles in Beijing, Shanghai and Suzhou as well as in California where it also has an R&D operation.
The company last month announced it had raised US$500m from an investment group led by Japan's SoftBank.
