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Huawei said on Wednesday it has signed a patent licensing deal with an unnamed supplier of parts to Volkswagen, although reports said it was Luxembourg-based Rolling Wireless.

The deal covers 4G connectivity in the vehicles, with Huawei adding it expects 30 million vehicles will end up falling under its patent licences. The Chinese giant said it was its biggest deal with the automotive industry.

“As an innovative company, we own a leading patent portfolio for wireless technologies, which creates great value for the automotive industry,” Huawei chief legal officer Song Liuping said.

“We are pleased that key players from the automotive industry recognise that value. We believe this license will benefit worldwide consumers with our advanced technology.”

Following a clampdown on Huawei from the US, the company has said it would need to diversify in order to reverse a revenue decline.

In April, the company reported first quarter sales were down 16.5%, but the result was expected due to Huawei selling off its Honor brand last year.

While revenue was down, margins were up thanks to a $600 million patent royalty, and “ongoing efforts to improve quality of operations and management efficiency”, the company said at the time.

“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” Huawei rotating chair Eric Xu said.

“No matter what challenges come our way, we will continue to maintain our business resilience. Not just to survive, but do so sustainably.”

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By ev3v4hn