Foxconn to rescue Nissan: report

FINANCIALLY troubled Nissan might find a saviour in Taiwan-based electronics giant Foxconn, the maker of iPhones – along with a raft of other products – that is aggressively repositioning itself to become a supplier of automobiles.

Foxconn is about to launch its first car, the Model C in the US later this year followed by its Model D SUV some time in 2027.

The company reputedly holds a 40 per cent share of the global electronics market with major customers based in the US, China, Canada, Japan, and Europe supplying the likes of Amazon, Hewlett-Packard, Apple, Intel, Dell, Microsoft, Google, Acer, Huawei, Lenovo, Xiaomi, Sony, Toshiba, and many others.

In some quarters, Foxconn is termed a “Taiwanese electric vehicle upstart” with a desire and capacity to move into mainstream car-making and according to some sources has been in talks with Nissan to build EVs.

That would seem to be a fait accompli given the history between the two companies as Foxconn has already been involved in vehicle manufacturing through a joint venture called Foxtron with Taiwan’s largest automaker, Yulon Motor Company building Nissan vehicles under licence.

Yulon even formed a holding company called Yulon-Nissan Motor so with synergies already in place, no surprises that Foxconn and Nissan are in talks to garner more production capacity for the former while at the same time sure-up the giant Japanese automotive manufacturer in its hour of need.

According to Automotive News, under discussion is Foxconn’s use of Nissan’s underutilised Oppama assembly plant in Japan, which is “a key factory seen as a primary target for shutdown”, according to Japanese outlet Nikkei and others.

“The partnership would be part of wider cooperation on EVs possibly including a joint venture,” the Nikkei said, citing a Nissan source it didn’t identify.

“The goal would be to transfer some of Oppama’s unused capacity to Foxconn, thereby avoiding the need to close it.

“The symbolic Oppama plant, just south of Nissan’s Yokohama headquarters in the carmaker’s traditional industrial backyard, is the company’s oldest and employs some 3900 people.

“It is seen as under threat by CEO Ivan Espinosa’s corporate restructuring plans to close seven plants globally.”

In a statement Nissan said the partnership report was “not based on an official announcement from Nissan”.

But according to Automotive News, a tie-up would do little to address Nissan’s short-term challenges, which include massive overcapacity in Japan, an impending earnings blow from US tariffs, cash burn, and debt.

“Nissan is in ongoing talks with multiple partners, including Foxconn, about measures that could possibly aid its restructuring plan,” it added.

It has been and likely still is in talks with other Japanese car-makers, the latest rumoured to be Toyota, in an effort to exit the financial mire.

Nissan has been forced to start implementing what some may call desperate measures to raise cash and cut costs leading to a reduction in the size of its workforce, making delayed payment deals with suppliers, selling assets, discounting cars, and closing some plants to reduce overcapacity among a bevy of measures to free up cash and pay down debt.

If a deal between Nissan and Foxconn can be struck, it may get Nissan CEO Ivan Espinosa off the hook over impending plant closures while at the same time, give Foxconn a bigger foot in the door to manufacturing BEVs.

Automotive News said that Foxconn partnering with Nissan would be a “big step toward its ambition of becoming a global contract manufacturer of EVs”.

Foxconn already has vehicle assembly sites in Taiwan, the US, and Thailand, without major sales. So, it is unclear how more capacity would benefit it.

“In May, Foxconn scored its first deal to make EVs for a global auto brand with an agreement to supply Mitsubishi with a new product starting next year. That vehicle, expected to be a compact crossover, will be made in Taiwan and exported to Australia and New Zealand,” added Automotive News.

Japanese media reports say Foxconn is eyeing work or partnerships with Nissan, Honda, Mitsubishi, Mitsubishi Fuso (all-electric buses), and others and is pursuing outlets in the US.