The tech giant is looking to acquire Borgward and its factory in Beijing and build a new plant in Wuhan
As you may have already heard, Xiaomi is entering the electric vehicle business with an initial investment of RMB10 billion (US$1.52 billion approx). The announcement was made back in March. Now a report has emerged that the Chinese tech giant may adopt a ‘dual factory’ model in its effort to put its electric vehicles into production promptly and ensure stable production in the future.
The report claims that Beijing-based Xiaomi EV Inc is actively working with industry authorities to advance the acquisition of Borgward Motors and its plant in the capital to obtain the permission to start its manufacturing activities. Located in the district of Miyun, the factory, which is based on the German Industry 4.0 concept, boasts an annual production capacity of 180,000 vehicles in phase one and 360,000 vehicles in phase two.
As a result of Borgward’s financial woes however, the plant has been suspended for more than a year and has recently been laying off workers, according to another report. Commissioned in mid-2016, the plant covers complete vehicle production processes such as stamping, bodywork, painting, final assembly, inspection, logistics, and IT. On top of that, it can also accommodate the manufacturing of both ICE and electric vehicles.
Borgward used to be (albeit briefly) German’s second largest automaker in the mid-1950s after Volkswagen. In 2014, it was brought back to life by Foton Motor, which is a subsidiary of the Beijing Automotive Industry Corporation (BAIC) that makes commercial vehicles. Just five years into the ownership, Foton sold 67 percent of its shares for 3.97 billion yuan (USD578 million) to the Chinese ride-hailing and short-term-rental provider Ucar. Earlier in June, we reported that the brand was filing for bankruptcy.
On top of acquiring Borgward and its assets, Xiaomi has reportedly chosen the site for its new factory in the Wuhan Economic and Technological Development Zone. If everything goes as planned, the company could begin construction of the facility sometime this month. It is worth noting that the factory is not far from XPeng Motor’s plant.
Xiaomi may seem to have the locations for its factories sorted out but the work is far from done as a popular recruitment website shows that the tech company is recruiting operators for its Wuhan plant. What’s more, company founder and CEO Lei Jun is still seeking suitable partners to help build its electric vehicles. One potential candidate is FAW Group, which according to reports, have been recently visited by Lei.
Xiaomi looking to strike a partnership with an automaker is hardly a surprise, as it would be difficult for them to make cars without the help from an industry expert. Plus, the company has set an ambitious target of selling 900,000 cars in the first three years of business.
