Hon Hai, Japanese motor maker Nidec planning joint venture
Taipei, July 21 (CNA) Hon Hai Precision Industry Co., the world's largest contract electronics maker, said Wednesday that it is planning to establish a joint venture company next year with its Japanese partner Nidec Corp. to expand collaboration in the electric vehicle (EV) business.
Apart from the two primary partners, the proposed company will be backed by Foxtron Vehicle Technologies Co., a vehicle design and engineering firm that was co-founded by Hon Hai and Taiwanese automobile maker Yulon Group in 2020, Hon Hai said in a statement.
Nidec, Hon Hai and Foxtron plan to enter into a contract for the establishment of the joint venture by the end of 2021 and inaugurate the company's headquarters in Taiwan the following year, according to the statement.
The new company will focus on the development, production and sales of electric motors and other EV technologies, said Hon Hai, which is also known globally as Foxconn.
In a separate statement, Nidec said Wednesday that the joint venture will be "an important initiative for the company to start full-scale sales to customers in the automobile markets from different industries."
Hon Hai, best known for producing Apple Inc.'s iPhones, has been venturing into the electric vehicle sector in recent years, eyeing the industry's growth potential.
Hon Hai Chairman Liu Young-way (劉揚偉) said at a business forum last month that the company was aiming to boost its gross margin to 10 percent by 2025 through its electric vehicle projects.
In the first quarter of 2021, the company reported a 5.08 percent gross margin -- the difference between revenue and cost of goods sold.
Hon Hai said the proposed joint venture with Nidec is also an expansion of their partnership, following their recent memorandum of understanding, which was signed in March.
Foxtron and Nidec are likely to produce a prototype of electric vehicle drive systems and other initial achievements of their partnership by the fourth quarter of 2021, according to Hon Hai.
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