(Asian Tech Press) Chinese search engine giant Baidu Inc (BIDU: NASDAQ GS) invested $313 million to form a second company for its car business, as enterprise information shows.

The new company, named Jidu Technology Co., is wholly owned by an entity incorporated in Lhasa, Tibet. The latter is a wholly-owned subsidiary of Baidu's subsidiary, Beijing Baidu Netcom Science Technology Co. Ltd.

In March this year, Baidu's first car company, Jidu Auto, was established in Shanghai with a registered capital of $313 million (2 billion yuan). It is a joint venture by Baidu and Geely Automobile Holdings Ltd (175:Hong Kong), and Baidu holds 55% of shares and Geely holds 45%.

The establishment of Jidu Technology, has triggered market speculation about Baidu's investment in the car business as a sole proprietor.

In response, Baidu stated that both shareholders of Jidu Auto decided to register the company in Beijing based on the current business development needs. The new company's future shareholder structure and operations management, will be communicated to the public when specific information is available.

In other words, the status of the new company, which is solely owned by Baidu, is only temporary, and there will be further adjustments to the shareholding ratio and operational ownership in the new entity in the future. The establishment of the new company is not a decision by Baidu to set aside Geely, but a joint decision by both sides.

Previously, Jidu Auto had said that it would invest $7.83 billion (50 billion yuan) in the next five years for the overall research and development as well as the continuous creation of a series of models for the car company.

At present, Jidu Auto has completed the initial construction in technology, branding, and talent recruitment. About 200 people have been hired for the car business, with the product team accounting for the major part.

The CEO of Jidu Auto, Xia Yiping, previously said that a new round of financing is planned for the third or fourth quarter of this year.