(Yicai Global) April 6 -- Xiaomi, China's biggest handset maker, has rebutted a rumor that the head of Huawei Technologies' smart car business is poised to join its electric vehicle subsidiary.

The rumor linking Richard Yu, who is also a Huawei executive director, with Xiaomi Automobile is false, head of public relations at Beijing-based Xiaomi told Yicai Global yesterday.

According to recent speculation on social media, Yu will move to Xiaomi Auto, becoming its chief technology officer, immediately after leaving Huawei along with a group of Huawei auto researchers to introduce its sophisticated research and development system to Xiaomi.

“It might happen when everything’s going well, but Huawei's consumer business is going through a rough patch at the moment,” a source close to Yu said to Yicai Global. “If he left, both his reputation and the firm's revenue would be hurt, so he’s unlikely to do that.”

Revenue at Huawei’s smart auto business was just CNY2.1 billion (USD305.2 million) in the 12 months ended Dec. 31, compared with CNY40 billion to CNY50 billion (USD5.8 billion to USD7.3 billion) at the telecom equipment giant’s other emerging businesses, Huawei’s latest earnings report showed.

The rumor of Yu jumping ship spread after Shenzhen-based Huawei said in an internal company message that it will not make cars, while Xiaomi's head of marketing, Zhou Xing, left for personal and family reasons. 

Yu, 53, has a master's degree from China’s prestigious Tsinghua University. He joined Huawei in 1993 and is chief executive of its consumer business group and smart car business and director of its investment review board for smart devices and intelligent automotive components, according to the firm's website.

Xiaomi Auto was set up in March 2021 and is based in the Beijing Economic-Technological Development Area. The unit has a two-phase car plant plan, with each able to produce 150,000 autos a year. The first phase will likely become operational this June, with mass production to begin in the first half of next year.

Editor: Martin Kadiev