[TOKYO] Hon Hai Precision Industry wants Japan’s carmakers to know it’s willing to assemble electric vehicles (EVs) for them, similar to how it makes PlayStations for Sony Group and iPhones for Apple, and expects to announce partners in the near future.
While Foxconn, as the Taiwanese company is also called, is well known as the world’s largest contract manufacturer and the owner of Sharp, more work needs to be done to raise its profile as a potential builder of cars, according to Jun Seki, chief strategy officer of the Taiwanese company’s EV business.
“What we want to have is more awareness in Japan,” Seki said. “Foxconn is famous as smartphone builders and also for the acquisition of Sharp, but nothing else.”
Seki, a former Nissan Motor and Nidec executive, is embarking on a charm offensive as he seeks to attract more carmaking customers willing to outsource their EV manufacturing. Foxconn is betting that many will need to do so in the coming years in order to cope with the huge costs and risks involved in making the transition from fuel-burning vehicles.
Although Magna International and other companies, including carmakers themselves, have long offered outsourcing, automobile manufacturers have traditionally assembled their own products even though a high percentage of the parts tend to come from suppliers. That was seen as a key lever for preserving profits and holding on to competitive advantages, which may be difficult to hold on to with the transition to EVs, which have fewer components and faster development cycles.
Foxconn is holding a news conference in Tokyo on Wednesday (Apr 9) to detail some of the products it is building and to explain its broader strategy. Although Seki declined to name specific partners that are yet to be announced, he said that electrified cars and buses made by Foxconn will appear on roads in Japan and the US over the next few years.
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Foxconn has secured an agreement to make EVs for Mitsubishi Motors, Bloomberg and Japanese media reported last month. In February, chairman Young Liu said that Hon Hai had approached Nissan and Honda Motor about potential cooperation, as the two were involved in merger talks that eventually were abandoned.
“Within one year, you can expect several Japanese partners,” Seki said.
Despite the flurry of recent activity, Foxconn’s EV contract manufacturing is still too small to be reported as its own segment in the company’s sales results. That will change over time as more carmakers see the benefits of outsourcing their manufacturing and Foxconn builds capacity in factories across the globe, according to Seki.
The Taiwanese manufacturer is building or refurbishing facilities in the US, Taiwan and Thailand while also seeking to expand capacity in India and the Middle East.
For Japan, Seki said Foxconn would be interested in expanding EV production by using existing plants by carmakers, some of which may be seeing excess capacity as more automobile production shifts to the US in order to cope with broad tariffs being imposed under the Trump administration. Some discussions are taking place, and building new factories in Japan is also an option, Seki added.
But first, Foxconn needs to show that it can build cars for others cheaply and effectively, Seki said. Winning over carmakers that still see manufacturing know-how as the core of their business is not easy, he acknowledged.
“Our company sales size is over US$200 billion, but this revenue only comes because of trust from customers,” Seki said. “We receive their highly confidential information but we have had no incidents at all. That’s why, like Apple, Sony trust us and ask us to build their facility. That’s what we want to emphasise.” BLOOMBERG
