Beijing is actively pushing for smartphone giant Xiaomi to gain production credentials through its acquisition of Borgward, and the results should be coming soon, cls.cn reported Monday, citing multiple sources.

The acquisition would give Xiaomi the capacity and production qualification to quickly put its own products into production, the report said, adding that Xiaomi is also choosing another site to build its own factory to ensure stable production capacity.

"Beijing authorities are working with industry authorities to move the matter forward in order to transfer Borgward's 180,000-unit annual production capacity to Xiaomi's car project," according to the report.

Barring any surprises, the proposal could land within September, the report said, adding that the plant is qualified to produce both fuel and new energy vehicles in China.

Borgward, a car brand founded in Germany in 2008, currently has its design and engineering located in Germany, but the vehicles are produced in China by Foton Motor.

In March 2019, Ucar Inc bought a 67 percent stake in Borgward for RMB 4.1 billion, although the final payment for the acquisition has not yet been made.

Borgward is currently struggling to survive, as its factory in Beijing has been shut down for more than a year and has recently been laying off workers, according to cls.cn.

In addition to the Borgward acquisition, Xiaomi may have completed the site selection for its new factory in Wuhan Economic and Technological Development Zone, the report said, citing people familiar with the matter, adding that the factory is not far from XPeng Motors' plant in Wuhan and construction will start soon.

Earlier, the Wuhan Municipal Bureau of Commerce said they had communicated with Xiaomi and were actively pushing for its car project to be located there.

While the site for Xiaomi's car factory appears to be gradually being determined, the company's founder and CEO Lei Jun is still visiting potential partners around China for the car build.

According to a September 11 release on the official website of the Jilin provincial government, the highest-ranking officials from Jilin province recently met with Lei in Changchun. While in Jilin, Lei visited China FAW for in-depth matchmaking talks on cooperation matters.

Xiaomi CEO visits FAW Group for in-depth talks on car-making partnership

Xiaomi reportedly to acquire a carmaker to qualify to build cars-CnEVPost

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