Through this new partnership the Alibaba mobility platform, Banma Network Technology, will be used to create a connected car operating system and will be used to increase online technology throughout the industry according to the two companies.
FAW, which is a joint venture from major manufacturers including Toyota, Mazda, and Volkswagen and is owned by the Chinese government, will use the Banma platform to develop "smart cockpit solutions" for its new vehicles.
This is Alibaba's first major partnership since the company launched its operating system for the auto industry.
The company stated recently that this partnership doesn't have a timeline to announce publicly.
This new partnership follows a recent announcement from Tencent, China Mobile, and Dongfeng Motor to team up and begin working on connected car services to be ready for 5G technology.
5G mobile networks are expected to alter several industries including the auto market as it provides faster mobile data speeds and offers better cloud computing options.
5G could be nearly 100 times faster than the previous iteration 4G and the industry expects it to help boost autonomous cars, smart city services, and a range of internet of things technologies.
China is aiming to have around 30% of all vehicles sold within the country to be "intelligent connected vehicles" by 2025. The strategy is to offer new automated services within new vehicle models.
FAW, which is the parent company for the Chinese luxury auto brand Red Flag, stated it aims to build a worldwide infrastructure by utilizing Alibaba's capabilities, especially it's cloud computing technology. It will also use Alibaba's data intelligence technology to increase product research, marketing, and customer services.
As a part of this agreement, the two companies also plan on researching new technologies including edge computing, blockchain technologies, and internet of things for improved logistics and mapping.
Alibaba introduces its first connected vehicle in 2016 and offers features including speech recognition, high-definition maps, payment services, AR navigation, and services booking.
Currently, Alibaba believes there are around 1 million vehicles in China that have its auto operating system installed including vehicles from SAIC Motor, Dongfend Peugeot-Citroen Automobile Co, Dongfeng Peugeot Citroen Automobile Company, Changan Ford and Škoda Auto.