South Korea’s top carmaker Hyundai Motor and its affiliate Kia said on Sunday that they have inked an agreement with China’s tech giant Baidu to develop technologies for connected cars.

Under the memorandum of understanding signed in Beijing last week, the two South Korean carmakers and Baidu will join hands in a wide array of areas, including connectivity and self-driving technologies.

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Hyundai and Kia will also utilise Baidu’s smart cloud computing technology to address Beijing’s enhancing data regulations, reports Yonhap news agency.

The South Korean companies will seek to find new business models harnessing artificial intelligence technologies with the Chinese counterpart as well, they added.

“Through the strategic collaboration with Baidu, we will make efforts to establish the ecosystem for connected cars in the Chinese market,” Hyundai and Kia said in a press release.

The agreement came amid the growing market for connected cars in China.

The annual sales of connected cars in China are anticipated to reach 17 million units this year, marking a sharp rise from 7.2 million units tallied in 2019, Hyundai said, citing Chinese data.

Hyundai and Kia have been working closely with Baidu since 2014, including the development of voice recognition technology.