Geely is reportedly in advanced talks to acquire Meizu Technology, a domestic smartphone maker backed by e-commerce giant Alibaba, as the Chinese auto group aims to provide a mobile-driven in-car experience and pose a challenge in the smart mobility race.

Why it matters: The move comes against the backdrop of China’s big tech firms, like smartphone maker Xiaomi and search engine Baidu, pushing to develop vehicles with smart cabin systems and autonomous driving technologies, developments that pose major threats to traditional automakers like Geely.

Details: Hubei Xingji Shidai Technology Co Ltd, a smartphone venture launched and majority owned by Geely chairman Eric Li, has begun talks to buy Meizu, a small and relatively obscure smartphone player, Chinese media outlet 36Kr reported Friday, citing people with knowledge of the matter.

  • Geely is currently carrying out due diligence on the niche handset maker, the sources added, while other details surrounding the acquisition such as the sale price are unknown.
  • A Geely spokesperson declined to comment on the report, saying only that the company is working to “expand the industrial footing” of its newly-established cellphone business. Meizu did not respond to TechNode’s request for comment on Monday.

Context: Geely announced its entry into the competitive Chinese smartphone market by establishing Xingji Shidai with registered capital of RMB 715 million ($113 million) in the central city of Wuhan in September, Reuters reported. Geely chairman Eric Li owns a 55% stake in the venture, according to Chinese business research platform Tianyancha (in Chinese).

  • The private automaker has hired Wang Yong, a former vice president at telecommunications giant ZTE, to help lead its smartphone business, while stepping up efforts to poach talent from electronics giants such as Xiaomi and Oppo, the 36Kr report added.
  • In early 2015, Alibaba invested $590 million for an undisclosed minority stake in Guangdong-based Meizu, with the e-commerce behemoth at the time reportedly intending to integrate its custom mobile operating system YunOS into mobile devices. The company was handed an antitrust fine of RMB 500,000 ($79,000) by local regulators in November last year, because of the deal.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen