Stellantis, Foxconn to announce strategic partnership
Stellantis NV on Tuesday will provide details concerning a new strategic partnership with the main assembler of Apple Inc.'s smartphones, the transatlantic automaker said Monday.
Fiat Chrysler Automobiles NV originally had been in negotiations with Foxconn Technology Co. Ltd., the Taiwan-based contractor, prior to the carmaker's merger with French automaker Groupe PSA in January. The year before, Foxconn said in a filing with Taiwan that it planned to establish a joint venture with Fiat Chrysler to make electric and Internet-connected vehicles for China. A contract, however, had yet to be signed.
Stellantis, the company has acknowledged and experts have said, needs a solution to compete in China, the world's largest vehicle and EV market where rivals have invested large sums amid stricter carbon emission regulations. Meanwhile, sales from Stellantis brands remain relatively weak.
"We are, as you know, rearranging completely our strategy in China as it has not been successful both for PSA and FCA in the past," Stellantis CEO Carlos Tavares said last week during an Automotive News World Congress webinar, teasing significant announcements and partnerships in the future. "We are now negotiating and changing very many things at the core, not on the surface, at the core. And that needs some time, but is now ongoing fast and strong."
The two companies will hold a conference call early Tuesday to introduce the partnership with Tavares and Young Liu, chairman of Foxconn parent Hon Hai Precision Industry Co. Ltd., Stellantis said in a statement on Monday. The partnership also includes Foxconn subsidiary FIH Mobile Limited, an investment holding company principally engaged in the supply chain for the global handset industry.
Foxconn's massive presence in China could help Stellantis improve its weak position there. Less than 3% of the automaker's revenue came from the Asia-Pacific region in 2020.
High-tech vehicles are desirable in the Chinese market. Having the high-volume production expertise of Foxconn as a partner for Stellantis could provide the automaker advantages in its infotainment systems, future over-the-air updates and other technologies.
FCA's cooperation with Foxconn sought to combine innovation, research, development and manufacturing efforts between the two companies "to enhance industrial advantages," Foxconn had said last year. It planned to hold 40% or less of the joint venture. The companies also expected to establish a common office.
In October, Foxconn debuted its first electric vehicle chassis as well as a software platform tasked to support EV makers with getting models to market faster. The company also outlined plans to release a solid-state battery, expected to offer longer life, by 2024.
Since then, it has signed deals with Chinese EV startup Byton Ltd. Last week, Fisker Inc. said it would partner with Foxconn to assemble the California-based startup's second production model, an EV said to be priced under $30,000, in the United States.
China's Zhejiang Geely Holding Group Co. Ltd. in January also said it was cooperating with Foxconn for contract manufacturing for automakers such as EV maker Faraday & Future Inc.
Foxconn, however, might not be too much help when it comes to the current global semiconductor shortage. Liu said Friday as the company reported earnings that he expects the crisis will persist until the second quarter of 2022, hitting Foxconn's business by 10%.