Chinese automaker Geely Holding is entering the smartphone business after its founder formed a new company, according to a report by CNBC on Tuesday.

  • Hubei Xingji Shida Technology Co. Ltd, created by Eric Li, entered into a strategic cooperation deal with Wuhan Economic and Technological Development Zone to manufacture mobile phones.
  • The company will have its official headquarters in Wuhan and will target “integrating global technologies and resources to develop premium smart devices including smartphones to global consumers.”
  • The entrance of Geely into smartphones shows the automaker’s motivation to venture into new areas after the company invested in satellites and flying cars.
  • China’s smartphone total shipments dropped 17% year-on-year in Q2 of this year. Globally, shipments expanded by more than 13%.
  • As the market share of Huawei dropped due to US sanctions, the Chinese rivals such as Oppo, Xiaomi, and Vivo are looking to capture more customers.

Geely is entering a highly competitive market and could face off against giant companies such as Apple, Samsung, and Xiaomi in the premium smartphone segment. Geely down -0.89%