Xiaomi set to enter auto industry, shares rally in Hong Kong By Investing.com

By Samuel Indyk

Investing.com – Xiaomi , the Chinese electronic company with a history in smartphones and home appliances, saw its shares rally in Hong Kong on Friday, closing the week higher by over 6%. Some have suggested the reason for the rally stems from a report that the company is considering entering the automobile industry.

iFengNews first reported the story, stating that the tech giant is planning on building its own car, although nothing has yet been formally decided. Xiaomi Corp (HK:1810) co-founder and CEO Lei Jun is said to be heading the unit.

Lei Jun is reported to have met with Tesla CEO Elon Musk twice in 2013, and it now appears he is ready to begin building a car of his own.

Technology companies

Xiaomi is not the first consumer electronics company to have an interest in the auto industry. Chinese technology company Huawei has reportedly considered manufacturing auto parts as the interconnectivity between autos and electronics continues to provide opportunities.

Meanwhile, Apple Inc (NASDAQ:AAPL) is also looking for a partner for its own auto ambitions. In recent weeks, the company has been linked with KIA Motors (KS:000270), Hyundai Motor (KS:005380) and Nissan Motor Co., Ltd. (T:7201) as potential partners for its automobile project. However, as yet, nothing has been confirmed and traditional auto names seem reluctant to partner with Apple for fear of losing their own brand identity.