Fiat Chrysler and Foxconn plan push into Chinese e-car market
- Author: Delia Davidson Jan 20, 2020,
Jan 20, 2020, 0:30
According to the presentation, each party will own 50% of the company to develop and manufacture electric vehicles and participate in an IOV, what Foxconn's parent company, Hon Hai, calls the "Vehicle Internet" business.
"Hon Hai will be responsible for design, components and supply chain management", Chairman Young Liu told Bloomberg News in a text message, adding that the company will not get into vehicle assembly.
Hon Hai Precision Industry Co., the iPhone assembler that's part of Foxconn Technology Group, plans to establish a joint venture with Fiat Chrysler Automobiles NV to develop and make electric vehicles in China. Initially, EVs made by this new pairing will be targeted at the Chinese market, but exports may be considered further down the track.
FCA, which is set to launch its first full-electric model, the 500 small auto, this year - last month reached a binding agreement for a $50 billion tie-up with France's PSA to create the world's No. 4 carmaker.
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Young Liu, Foxconn's chairman, told the financial publication Foxconn "will be responsible for design, components and supply chain management".
Even though China's economy is not growing as fast as it once was, the market for electric vehicles grew by 6 percent in 2019 while overall auto sales contracted by 8 percent.
While Hon Hai has limited automotive experience, it does bring other things to the table, said Michael Dunne, a China expert and CEO of consultant ZoZo Go.
The aim is to reach a binding agreement in the next few months, though there's no guarantee of that time-frame, it added.
He restructured the automaker's decade-old joint venture with Guangzhou Automobile Group in April, calling the shakeup an attempt to "more rapidly respond to changes in the Chinese market".