Vehicle producer SAIC Motor Corp Ltd and e-commerce company Alibaba Group Holding Ltd announced on Thursday they would invest 1 billion yuan ($160 million) in a fund to develop Internet-connected vehicles.

The fund, which is open to further investment from third parties, will promote the development of "cars on the Internet" and build operational platforms for Internet-connected cars, said a joint statement from the two companies.

A 50-50 joint venture between SAIC Motor and Alibaba will be set up based on the fund, which aims to roll out China's first Internet car next year.