Foxconn Forms Joint Venture with Geely to Build Cars for Other Automakers

Foxconn Technology Co Ltd (TPE: 2354) is yet solidifying its plans to get engrafted in the auto industry by forming a mutual Joint Venture with Chinese auto giant Geely Automobile Holdings Ltd (HKG: 0175) for the design and manufacturing of autos for other car manufacturers. According to a press release from Foxconn, the new Joint Venture will see the companies join hands to provide OEM and customized consulting services relating to whole vehicles, parts, intelligent drive systems, automotive ecosystem platforms to global automotive enterprises and ridesharing companies.

The Joint Venture as revealed in the press release will have equal ownership of 50% each from both companies but with a different number of board members from each of the respective automotive firms. While the Chairman of the board as well as two other members will come from Foxconn, Zhejiang Geely Holding Group will provide the remaining two members making a five-man board.

The JV is expected to pursue its auto development initiatives using the CASE (Connected, Autonomous, Shared, and Electrified) technologies as its benchmark.

“This alliance between Geely Holding and Foxconn represents a milestone in the cooperation between the automotive industry and ICT industry. With Foxconn’s globally leading R&D technologies, intelligent manufacturing, and hardware-software integration capabilities, the two parties form a highly complementary partnership that allows us to better serve and meet the diverse needs of different customers, and offer the most advanced, fastest, full value-chain vehicle production service platform,” said Young-way Liu, Chairman of Foxconn Technology Group.

Liu also noted that the partnership aligns with the company’s visions and reemphasizing the leading position Foxconn holds in today’s technology ecosystem.

Following the JV partnership news, the shares of Hon Hai Precision Industry Co., Ltd (TPE: 2317), the parent company of Foxconn technologies soared by 2.40% to 106.5 Taiwanese Dollars at the time of writing. Geely Auto shares surged 1.08% to 32.70 Hong Kong dollars.

Foxconn and Geely JV Is a New Leap in Auto Company Partnerships

With many technology companies aiming at making their debut to tap into the potentials inherent in the electric vehicle market, a sizeable number of these companies are seeking alliances to make their dreams a reality.

While a number of these partnerships including that between Foxconn and Chinese EV startup Byton have made the headlines in recent times, the collaboration between Foxconn and Geely comes off as a new leap in the order of partnerships reported lately. Besides the fact that both firms will pull resources together to nurture the growth of the new firm, both already have extensive global supply networks that can spin the new venture and its intended offerings into higher relevance in no time.

“Foxconn’s professional capabilities, rich experience, and global layout in the ICT industry offer important insight for the transformation and evolution of the automotive industry. Geely Holding Group will give full play to its advantages in the automotive fields of design, engineering, R&D, intelligent manufacturing, supply chain management, and quality control while joining forces with Foxconn to develop together and explore new pathways for transforming, improving, and achieving high-quality development of the manufacturing industry,” said Daniel Donghui Li, CEO of Zhejiang Geely Holding Group.