• The Taiwan-based manufacturing giant wants to partner with auto brands in a bid to become the ‘Android system of electric vehicles’ 
• It has worked up a radical offer for Honda and Nissan in the wake of their aborted merger talks
• Whether or not Foxconn makes headway with this particular proposal, could it be the sort of relationship that the auto industry, suffering from overproduction and mired in debt, actually needs?

Foxconn, the Taiwan-based electronics contracting giant, injected a further dose of surprise into an already tariff-startled Asian connected car sector recently by proposing a corporate tieup with both Honda and Nissan, the two struggling Japanese auto giants who earlier this year failed to seal a merger deal (though there’s now speculation the M&A deal might be revived).

The company, based in Taipei City in Taiwan, has proposed a three-way partnership to Honda and Nissan, with Foxconn providing design and production to both on a contractual basis, as well as its expertise in manufacturing smart technology products.

Foxconn is the contract manufacturer that Apple relied upon to pump out its Mac and iPhone products, and it’s now keen to move beyond computer and smartphone assembly to find more value-added roles for its contract manufacturing prowess. It views the fast-expanding connected car industry as the ideal adjacency to tackle next and in July last year it upped the pace by launching a trial manufacturing centre for electric vehicles (EVs) in the Zhengzhou Airport Economy Zone in China, where it will operate a contract design and manufacturing service (CDMS) model for EVs, completing 80% of the work and leaving only 20% for its clients.

According to renewable energy publication Reccessary, Foxconn has already introduced six EV (electric vehicle) models, including an SUV, a luxury sedan, an electric bus and an electric delivery vehicle.

Originally, Foxconn (aka Hon Hai Technology Group) derived a significant slice of its revenues and much of its profits from its vast mainland China operations. But its symbiotic relationship with Apple may have done the most to eventually enable it to become a contract manufacturing powerhouse by encouraging it to invest in leading-edge tech to meet Apple’s exacting product standards. As a result, Foxconn innovated new car manufacturing methods and built expertise in sectors such as cloud computing, networking, mobile devices, AI, robotics and so on, topping it all off with a ‘continuous innovation’ ethos, which set it up with the electronics and compute integration skills necessary to become a full electronic design and production contractor for connected vehicles.

The increasing complexity of modern vehicle design offers a real competitive advantage for Foxconn.

Today, all new cars – whether internal combustion, battery-electric or hybrid – are able to connect to a mobile network so they can be supported by a growing range of applications, such as in-car entertainment, voice communications and satellite navigation. Just as importantly, other apps and processes are integrated with the car itself to monitor and control things such as batteries, electric motors, cruise control, intelligent braking, safety systems and so on. In many ways they are all ‘connected’ vehicles.

This all adds up to a lot of moving – and just as important, changing – parts. As with the computer industry, it’s not enough to produce a standard or conformant part or sub-assembly: Each element must be refined and updated on an ongoing basis to stay compatible as production rolls on and new model variants of a vehicle are introduced.

So Foxconn’s move is a reflection of the fact that the success of the connected vehicle industry comes not so much from owning or having access to the best technologies, but by owning and managing the best means to combine them together on the production line.

This is what Foxconn thinks it has achieved with 30 years or so experience in contract manufacturing and production engineering, a value sentiment echoed by none other than Elon Musk, who apparently attributes much of Tesla’s success to something similar. He recently wrote on X that the “Tesla factory IS the product. The Cybercab [Musk’s upcoming connected taxi] production line is like nothing else in the automotive industry,” he proclaimed.

In other words, design and production engineering skills are increasingly seen as key to getting complex connected vehicles off the design board and onto the road faster, cheaper and better.

Essentially, Foxconn wants to become ‘Fixconn’ by positioning itself as an enabling glue for the fast-expanding connected vehicle industry.

- Ian Scales, Managing Editor, TelecomTV