Tencent will team up with Guangzhou Automobile Group to develop smart cars in the latest in a series of deals in which China’s big technology companies compete to grab a piece of the world’s largest car market. GAC said in a filing to the Hong Kong Stock Exchange that the two companies would jointly develop internet-connected cars and artificial intelligence-aided driving. The announcement drove GAC’s share price higher — it was up 4.6 per cent by the close of Asian trading on Tuesday. “The two parties will jointly build an intelligent and connected car brand with uniqueness and competitiveness,” the filing said. Tech companies have been exploring partnerships with the auto sector, viewing the car as a new type of smart device and the logical extension of the smartphone. For companies such as Tencent, which owns WeChat, China’s ubiquitous social networking app, staying competitive means offering internet services on as many screens as possible — from phones to laptops to TVs, and now car dashboards. Car executives, for their part, concede that software and connectivity will increasingly drive consumer brand choices, which means offering apps in their cars should give them a competitive advantage. Tencent, which this year bought a 5 per cent stake in Tesla, the US battery car maker, for $1.78bn, is a relative latecomer in the connected car race. Already Tencent’s competitors have made inroads in China, which produced 28m vehicles last year, about 30 per cent of the world’s total. Alibaba, the ecommerce group and Tencent’s rival, has developed a car operating system through a joint venture with SAIC Motor, another top Chinese brand. Launched in 2015 the partnership has produced YunOS Auto, an operating system that connects cars to cloud services such as entertainment, mapping and location services. YunOS has not ventured into autonomous driving, however. SAIC has installed Alibaba-designed YunOS on the Roewe Rx-5 sport utility vehicle, which boasts a 10.4-inch touch screen and was launched last year as the “world’s first mass-produced internet car”. In July, it was the sixth best-selling SUV in China. Baidu, another Tencent rival, is the furthest along of its Chinese internet peers in the area of self-driving cars. In April Baidu launched Apollo, an open-source platform for AI and autonomous driving. Baidu has partnerships with BYD, Chery and BAIC, the Chinese groups that provide the vehicles it uses to test its driverless technology at a site in the ancient river town of Wuzhen. Baidu also offers connected car software such as CarLife, which integrates a smartphone with a car. DuerOS, another Baidu offering, offers in-car voice recognition.