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Foxconn'S "Car Making" Imagination And Its 15 Years Of Foreshadowing

2021/1/15 11:57:00 199

Imagine

The rain is coming, and the wind is all over the building.

In a short period of ten days, Foxconn, which has a dense layout in the field of automobile manufacturing, has become one of the focuses of the automobile industry.

On January 4, Foxconn signed a strategic cooperation framework agreement with byton motor and Nanjing Economic and Technological Development Zone to promote the mass production of byton's first model m-byte. On January 13, Foxconn signed a strategic cooperation agreement with Zhejiang Geely Holding Group Co., Ltd. (hereinafter referred to as "Geely Holdings") and established a joint venture company to provide OEM production and orders for global automobile and travel enterprises To make consulting services.

Subsequently, Nanjing Futeng New Energy Automobile Technology Co., Ltd., wholly owned by Foxconn Hongfujin Precision Industry (Shenzhen), emerged. It is understood that the company was established on January 12, with a registered capital of about 323 million yuan, and its business scope includes the research and development of automobile components, the manufacturing of automobile parts and accessories, etc.

On January 14, it was reported that Foxconn appointed Jack Cheng, a former executive vice president of Weilai, as CEO of the electric vehicle platform.

Behind a series of layout, it is hard to hide Foxconn's determination to enter the automobile industry.

"At present, science and technology Internet enterprises are ready to move, and the car making movement is vigorous. The main reason is that the capital market has a very high value for car making. Therefore, these companies hope to improve their own valuation and seize the opportunity of a new round of growth with the help of car building." On January 14, Cui Dongshu, Secretary General of the national passenger car information association, said in an interview with reporters from the 21st century economic report.

In fact, since 2020, new car manufacturing enterprises represented by Tesla and Weilai have been making great progress in the capital market, which has impacted the global automobile industry for a century and attracted the attention of the capital market.

Although the cooperation between Foxconn and all parties has not yet entered into the substantive operation stage from the agreement, the capital market has already been "stirred". In the past two trading days, the share price of Foxconn related company industrial Fulian (601138. SH) has been rising continuously; the stock price of Hong Kong stock fuzhikang (02038. HK) has risen linearly on January 13, once rising nearly 34%, and the increase has fallen back to 18% by the end of the market.

15 years' bumpy road of "making cars"

Foxconn's road to making cars dates back to 15 years ago.

In 2005, Foxconn bought 100% equity of Aetna, one of Taiwan's four largest automobile wiring harness factories, with a price of 370 million yuan, and formally set foot in the manufacture of automotive electronic products such as battery lines, video transmission wiring harness, reversing radar and intelligent equipment.

In 2010, Foxconn took over the order of Tesla supply chain, becoming the main supplier of the latter's central control touch screen, connector and lithium battery; in 2013, Foxconn became a supplier of luxury brands such as Mercedes Benz and BMW, supplying automotive electronic equipment including on-board entertainment equipment and automobile electric machinery.

In 2014, Foxconn and BAIC new energy Co., Ltd. jointly established Beijing Hengyu new energy car rental Co., Ltd., and cooperated in electric vehicle leasing, time sharing leasing, electric taxi and other businesses.

After giving up harmony Futon in 2016, Foxconn did not leave the automobile industry, but focused on the fields such as intelligent Internet connected electric vehicles. Since 2017, Foxconn has invested a lot in automobile related and travel fields. It has successively invested in didi travel, a new car making force, and Ningde era, a new force in car making.

In early 2020, Hon Hai announced plans to form a joint venture with Fiat Chrysler to develop and manufacture electric vehicles in China, but Hon Hai itself will not participate in any assembly. In October 2020, Foxconn and Yulon jointly released the "MIH EV open platform", and announced that solid-state batteries would be launched in 2024.

This means that Foxconn has officially entered the automobile industry.

According to the plan of Liu Yangwei, chairman of Foxconn's parent company, Hon Hai group, Foxconn will not produce complete vehicles or build its own brand of electric vehicles in the future, but will supply parts or services for 10% of the world's electric vehicles (about 3 million vehicles) from 2025 to 2027.

At present, Foxconn is negotiating with a number of automobile manufacturers to promote Taiwan's electric vehicle industry to the world, Liu said.

"The prospect of China's new energy vehicle industry in 2015 is not clear, but now, the prospect of intelligent electric vehicles has been very broad. For Foxconn, this is a good time to enter the industry. " Previously, Zhang Xiang, an independent analyst of the automobile industry, said in an interview with the 21st century economic report, "all industries, including Internet enterprises and technology enterprises, are making cross-border cars. Foxconn's car making is based on the prediction of the mobile phone market and expanding business areas to balance the risks."

In fact, as the world's largest technology manufacturing and service provider in the field of R & D, manufacturing and supply chain, Foxconn's move is not a fluke.

For a long time, although Apple's business accounts for about half of the sales of Foxconn's parent company, Hon Hai Precision, Foxconn has gradually seen the ceiling of this business under the influence of factors such as the decline of global mobile phone and electronic business and the rise of domestic mobile phones such as Huawei and Xiaomi.

Foxconn's annual financial report in 2019 shows that the growth rate of its revenue has significantly slowed down, with a year-on-year growth rate of only 0.82%. In 2017, it was still 8%.

The growth ceiling of smart phones is within reach, and homogenization and price war problems emerge one after another. As the next most promising intelligent terminal equipment, automobile has also become an important starting point for Foxconn and other "crossover" to seek diversified development and explore new growth points.

On January 13, the China Automobile Industry Association released China's automobile production and sales data in 2020. Among them, the production and sales of new energy vehicles reached 1.366 million and 1.367 million, respectively, with a year-on-year increase of 7.5% and 10.9%, respectively. Based on this, CAAC predicts that the sales volume of new energy vehicles in China will be 1.8 million in 2021, with a year-on-year increase of 40%.

At the same time, with the continuous optimization of technology and environment, European and American countries increase support for new energy vehicles, and the growth rate of new energy vehicles in the world will only be faster and faster.

The huge market attracts many players including Baidu, apple and Foxconn.

Car making or OEM?

In 2021, with the frequent "drop outs" of Foxconn, although Liu Yangwei publicly said that "Foxconn is not ready to produce complete vehicles, nor to launch its own brand", the outside world has a lot of imagination about Foxconn's "car making".

But judging from the cooperation between Foxconn and byton and Geely, Foxconn seems to be aiming at "OEM".

"Tesla is the iPhone in electric cars, and Foxconn wants to be Android for electric cars." Liu Yang Wei pointed out that he hoped to apply the experience of supply chain management in the information and communication technology industry in the past 30 or 40 years to the new field of automobile.

It is understood that the joint venture between Foxconn and Geely will provide OEM production and customized consulting services for global automobile and travel enterprises, including but not limited to vehicle or parts, intelligent control system, automobile ecosystem and the whole process of the whole production chain of electric vehicles. Meanwhile, the ICT (information and communication technology) division mode will be introduced.

"Foxconn itself is a benchmark enterprise in the OEM industry, which can bring the OEM experience of the mobile phone industry to the automobile industry and better serve the third-party companies." Zhang Xiang said that enterprises now emphasize the combination of strong and powerful enterprises, especially in the automobile industry with a very long industrial chain. The combination of their respective advantages through capital cooperation also greatly improves the probability of success.

From the market point of view, with the increasing number of car manufacturing companies on the Internet, trade unions have gradually become a mainstream model.

According to Zhang Junyi, deputy general manager and chief operating officer of Ping an intelligent enterprise, Foxconn has always wanted to build cars. Whether it is to build an electric vehicle platform or cooperate with byton and Geely holdings, it is the landing and continuation of the early work. Foxconn, like Huawei, wants to enter this larger ecological field, whether it is OEM or its own brand.

"Foxconn has expanded its development in electric vehicles with its advantages in the automotive industry chain over the past decade or so. It is also a better way to promote cooperation with such enterprises as Byron and Geely. In the future, Foxconn will become a OEM of electric vehicles. Compared with self-made cars, it is also easier to achieve things. " Cui Dongshu believes that early technical reserve is also conducive to Foxconn's overall transformation from OEM to car manufacturing.

Some people in the industry speculate that Apple will develop its own electric vehicles in the future. Foxconn, as the OEM factory of apple, can quickly strengthen its OEM strength in the field of electric vehicles through external cooperation, laying a foundation for future OEM of apple and other electric vehicle brands.

In the view of the industry, whether it is OEM or "car making", Geely is undoubtedly an ideal partner.

"Geely is the largest auto enterprise with its own brand in China at present. It has more factories and more production resources. What's more, Geely's vast structure has a certain leading edge in new energy and intelligence." Zhang Xiang said.

It is understood that in the field of automobile production and manufacturing, Geely Holdings has developed four basic module architectures: BMA, CMA, spa and sea. The newly developed pure electric architecture sea is vast and intelligent evolution experience architecture is a global efficient intelligent electric vehicle solution.

 

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