The main assembler of iPhones gets into the business of making electric cars as Hon Hai ties up in a venture with Fiat Chrysler

Hon Hai Precision Industry and its subsidiaries will hold 50 per cent of the venture, while Fiat Chrysler holds the remainder, according to a filing

The venture is aiming to target the Chinese market, and consider exports later

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People works on machines in Foxconn factory in Guiyang, Guizhou Province, on 28 May 2018. Photo: EPA-EFE

Published: 3:23pm, 17 Jan 2020Updated: 8:13pm, 17 Jan 2020

Hon Hai Precision Industry, the main assembler of Apple’s iPhones, will establish a joint venture with Fiat Chrysler Automobiles NV to develop and make electric vehicles in China.

Hon Hai and its subsidiaries will hold 50 per cent of the venture and Fiat Chrysler the rest, the Taiwanese company said in an exchange filing. While the two companies have yet to sign a formal agreement, they plan to target the Chinese market first and consider exporting cars later. They aim to ink the agreement in the first quarter, according to a person familiar with the matter, and Hon Hai’s Hong Kong-listed unit FIT Hon Teng will also be involved. Fiat Chrysler declined to comment beyond the filing.

Shares of Hon Hai were up as much as 2.7 per cent in Taipei trading Friday, their biggest intraday rise since mid-November and the main driver behind the benchmark Taiex’s gain.

Hon Hai, the primary listed vehicle for Terry Gou’s Foxconn Technology Group, seeks to diversify from its role as the assembler of a swathe of the world’s electronics from Macbooks to Sony Playstations. The company aims to employ its expertise in precision manufacturing and supply chain management to grow the automotive business to 10 per cent of revenue in the long run, Chairman Young Liu told Bloomberg News.

“Hon Hai will be responsible for design, components and supply chain management,” he said in a text message, adding that the company will not get into car assembly.

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