Behind The Layout Of Internet Of Vehicles With The Fourth Largest Automobile Group: Foxconn'S "Chess Game" Is Increasingly Clear

Since 2021, Foxconn, which is known as the substitute factory of Apple mobile phone, is making a "Crazy" layout in the automobile industry.

On May 18, stellantis, the world's fourth largest automobile group, announced that it had signed a non binding memorandum of understanding with Hon Hai Precision Industry Co., Ltd. (Foxconn's parent company) and its subsidiary fuzhikang Group Co., Ltd., to establish a joint venture called "mobile drive" with 50:50 voting rights.

It is understood that the new joint venture, headquartered in the Netherlands, will focus on information entertainment, remote information processing and cloud service platform development, as well as artificial intelligence based applications, 5g communications, upgraded OTA wireless remote services, e-commerce and intelligent cockpit integration solutions. Stellantis group and Foxconn jointly own all the development achievements of the joint venture.

According to the data, on January 16 this year, PSA group and FCA group formally merged to form stellantis group, which has 14 brands including Fiat, Maserati, jeep, Dodge, ram, Peugeot, Citroen, Opel and DS, with annual sales second only to Toyota, VW and DS Renault Nissan Mitsubishi alliance is the world's fourth largest automobile manufacturer.

As a supplier, the new joint venture will have the opportunity to participate in the bidding for software solutions and related hardware supply from stellantis group and other automobile manufacturers“ In fact, the cooperation between the two sides is from the perspective of parts suppliers rather than directly involved in vehicle manufacturing, which conforms to the basic logic of the development of both sides. " On May 18, Zhang Xiang, an independent auto analyst, said in an interview with the 21st century economic reporter that "Foxconn has chosen multiple attacks in the automobile industry, which can also be called" exploring the way. "

In fact, since January this year, from joining hands with Geely and investing in Byron, to the recent plans to acquire semiconductor chip factories, cooperate with Fisker to manufacture electric vehicles, and establish a joint venture with stellantis. Although we don't build cars, we've gone from batteries and semiconductors to electric vehicle platforms, to open-source tool chains, from OEM companies to parts suppliers, Foxconn's global car layout is increasingly clear.

Global Internet of vehicles

It is worth noting that, unlike previous cooperation agreements signed by Foxconn with Geely, byton and other vehicle manufacturers, this joint venture with stellantis has obviously shifted its target to the field of Internet of vehicles and intelligent cockpit. Behind this is Foxconn's transformation to a core component supplier“ In 2015, the prospect of China's new energy vehicle industry 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. " Zhang Xiang said intelligent connected vehicles are developing rapidly. The latest data show that the penetration rate of new car Internet has exceeded 60%, and the proportion is still increasing year by year.

In the view of Carlos Tavares, CEO of stellantis group, how to improve the life experience of consumers is an important issue. It has the same important position as the beautiful design or innovative technology of vehicles. Software development is the strategic key of the automobile industry. The function and service of Internet of vehicles marks the next major change of the automobile industry, This change is as important as electrification of vehicles“ First of all, stellantis is the fourth largest automobile group in the world, with a large amount of procurement of Internet of vehicles and smart seat warehouses every year; Secondly, the Internet of vehicles, including intelligent cockpit, belongs to the spare parts industry and belongs to a high-tech part industry. Stellantis sets up a joint venture company by itself, which is equivalent to reducing procurement costs and transforming into a software service provider; Third, as the standard configuration of intelligent vehicles, the Internet of vehicles and intelligent cockpit reflect the core technical ability of an automobile enterprise to some extent.

If we set up a joint venture company, we can master the core resources, even the pricing power. " For the logic behind the cooperation, Zhang Xiang pointed out.

In Zhang Xiang's view, although Foxconn is seeking strategic transformation because of the shrinking OEM business and declining shipment volume year by year, Foxconn does not want to cut into vehicle manufacturing“ Although the future cake of car making is bigger, the business model is more beautiful, and it is easier to attract capital investment, the corresponding risks are also very large.

Foxconn does not choose to build cars directly like Baidu and Xiaomi. Instead, it chooses to enter the core parts industry. The characteristics of core parts are that the profits of core parts are higher than those of ordinary parts, and the investment is a little lower than that of making cars, and the risks are also smaller. It can be attacked and defended if it is advanced. If the parts can be made well, it is possible to further build the car after accumulating experience. "

Zhang Xiang told reporters“ In the future, more and more cars will be driven and defined by software. Today and in the future, consumers' demand and expectation for software driven innovation solutions are increasing day by day, hoping to realize further connection between drivers and passengers inside and outside the vehicle. This is a natural extension of Foxconn's global leadership in the field of intelligent technology development and application. " Liu Yangwei, chairman of Hon Hai, said.

Multi channel layout, no vehicle

Since the beginning of this year, communication companies including apple and Xiaomi have announced cross-border vehicle manufacturing. However, judging from the current layout of Foxconn, it is obvious that Foxconn does not intend to manufacture complete vehicles“ Tesla is the iPhone in electric cars, and Foxconn wants to be an Android of electric cars. " Liu Yangwei once pointed out that he hoped to apply Foxconn's experience in the supply chain management of information and communication technology industry in the past 30 or 40 years to the new field of automobile.

In fact, as the world's largest technology manufacturing service provider of electronic industry with obvious advantages in R & D, manufacturing and supply chain, Foxconn is speeding up its layout in the field of electric vehicle manufacturing around "OEM".

It is understood that in October 2020, Foxconn and Yulon jointly released the "MIH EV open platform", and announced that solid-state batteries would be launched in 2024“ Through the MIH alliance, Hon Hai provides an open chassis platform to the industry and creates a new supply chain for the electric vehicle industry. We will support more automobile industry chains and let more enterprises design cars. Only when more enterprises design cars, can Foxconn OEM auto days be prosperous. " Liu Yangwei pointed out.

Foxconn is also accelerating its expansion in the field of chips and semiconductors that have plagued global auto companies, and has continued to invest in such fields as CMOS image sensors and IGBT.

Liu believes semiconductors will play a key role in Foxconn's automotive blueprint.

A few days ago, Foxconn confirmed that it was negotiating with Wang Hong Electronics, a Taiwan memory chip manufacturer, on the acquisition of a chip manufacturing plant. The move was seen as striving for resources for its electric vehicle business and accelerating the improvement of the automotive semiconductor industry.

In Zhang Xiang's view, Foxconn's multi-channel layout is the need of the group's overall strategic transformation.

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 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%. On May 14, Foxconn's parent company, Hon Hai Precision Industry Co., Ltd., released its first quarter financial report of 2021, which showed that the operating revenue of Hon Hai was NT $1.35 trillion, down 33% from the previous quarter, and its net profit was NT $28.162 billion, down 38.7% from the previous quarter.

As the biggest outlet in the era of artificial intelligence, automobiles are brewing a trillion level market. Just as smart phones stirred the nerves of ICT industry ten years ago, they have become an important starting point for Foxconn and other "crossover" to seek diversified development and explore new growth points“ Foxconn, like Huawei, wants to enter into this larger ecological field, whether it's OEM or its own brand. " Previously, Ping an wisdom enterprise vice general manager and chief operating officer Zhang Junyi said in an interview with reporters.

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“ Foxconn itself is a benchmark enterprise in the OEM industry, which can bring the OEM experience of the mobile phone industry to the automotive 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.

Some people in the industry believe that early technology reserve is also conducive to Foxconn's overall transformation from OEM to car manufacturing. Through external cooperation, Foxconn can quickly strengthen its OEM strength in the field of electric vehicles, which may lay a foundation for the OEM of apple and other electric vehicle brands in the future.