Smartmi's first model will be an SUV, and a car design firm has been approaching Smartmi about a car design, according to local media.

(Image credit: Smartmi)

Smartmi, the majority-owned subsidiary of Chinese smartphone giant , has jumped on the car-making bandwagon, and its first model will be an SUV, 36kr said today, citing sources familiar with the matter.

Ma Yongdong, former head of electric vehicle projects at Pan Asia Technical Automotive Center, a joint venture between General Motors and SAIC Motor, has joined Smartmi to run the vehicle business, and people from BAIC's electrical and electronics architecture also joined in, according to the report.

An automotive design firm has already been approached by Smartmi to work on vehicle design, according to the report.

Smartmi aims to build passenger cars, with its first model being an SUV, the report said, adding that the company's car-building business remains separate from Xiaomi's, and no apparent support for Smartmi from Xiaomi's administrative system has been seen.

Smartmi is one of the many companies in the Xiaomi ecosystem, whose main products include air conditioners and air purifiers. Unlike other Xiaomi ecosystem companies, however, it is a controlling subsidiary of Xiaomi.

Information from data provider Tianyancha shows that Xiaomi co-founder Liu De owns 95 percent of Beijing Smartmi and has effective control. Liu often holds shares in its eco-chain companies on behalf of the Xiaomi Group.

On March 30, Xiaomi announced on the Hong Kong Stock Exchange that it plans to set up a wholly-owned subsidiary to take charge of its smart electric car business.

Xiaomi's initial investment in the automotive business is RMB 10 billion ($1.54 billion), with an expected investment of $10 billion over the next 10 years.

Xiaomi will use its existing RMB10.8 billion cash reserves, its 10,000-strong R&D team and the world's best smart ecosystem to build Xiaomi cars, said Lei Jun, founder, chairman and CEO of Xiaomi.

The smartphone giant announced on September 1 that it had officially completed the registration of its automotive business as Xiaomi Auto Co Ltd.

On November 27, Xiaomi signed a contract with the Beijing Economic and Technological Development Area Management Committee to officially announce that the company's automotive business will be headquartered there.

Xiaomi will build the headquarters base for its auto business and its sales and R&D headquarters there, and will build a 300,000-unit-per-year auto plant in two phases, according to an announcement posted on the official WeChat account of the Beijing Yizhuang Economic and Technological Development Zone.

The plant will be built in two phases, with annual production capacity of 150,000 vehicles in the first and second phases, respectively, the announcement said, adding that Xiaomi's first car is expected to roll off the production line and achieve mass production in 2024.

Xiaomi to build plant in Beijing with annual capacity of 300,000 vehicles