| You might have heard of Foxconn, the manufacturer of iPhones and a zillion other electronic gizmos. But its carmaking sibling Foxtron? A lot less likely. Ahead of the "Tech Day" of Hon Hai Technology Group, the parent of both, Lauren Faith Lau writes about the struggles the company is having as it tries to break into autos. Plus: About 100 hostages are still being held by Hamas one year after its attack on Israel, and there's no end in sight to fighting in the region. If this email was forwarded to you, click here to sign up. Over the past five decades, Hon Hai Technology Group has grown from a diminutive supplier of plastic knobs and buttons for TV sets into the world's biggest manufacturer of consumer gadgets. Operating under the name Foxconn, the company has probably made a device that's in your pocket, on your wrist or in your living room. It produces more than half of Apple's iPhones, the vast majority of Amazon.com's Kindles and all of Nintendo's latest gaming consoles. That's been a great business—$200 billion in revenue last year—but Hon Hai's leaders have been looking for a new growth engine. So five years ago, they created a subsidiary called Foxtron aiming to do to cars what Foxconn has done to electronic gadgets. The company says it can take a huge bite out of the global automotive business, producing both completed vehicles to be sold under other brands (like it does with Dell laptops) and many of the parts that manufacturers need. To give the effort a bit of pizzazz, Foxtron hired Italian design shop Pininfarina SpA to sculpt some of its models.  Foxtron Model B electric vehicles on display at Hon Hai headquarters in Taipei. Photographer: I-Hwa Cheng/Bloomberg Taking a page from Apple Inc. and its glitzy gizmo launches, Hon Hai this week is hosting a "Tech Day" in Taipei, where its latest products will be on display. This is the company's fifth annual stab at such an event and the first that will be open to the general public. A key element is a pair of electric vehicle prototypes, a seven-seater called the Model D (details are scarce) and a small bus called the Model U (details are even scarcer). So far, Foxtron's push into autos has been underwhelming. The only brand that's taken it up on its offer of contract manufacturing is Luxgen Motor Co., which is sold exclusively in Taiwan. The company offers an EV from Foxtron and next year plans to introduce a second, alongside a pair of combustion cars that it makes in its Taiwan factory. Sure, Luxgen's EV sales are growing fast, but the company said it moved only about 5,000 electric models in the first eight months of this year. In 2022, Hon Hai bought a former General Motors Co. factory in Lordstown, Ohio. The vast facility—it can produce up to 350,000 vehicles a year—had been taken over by Lordstown Motors Corp., an e-truck maker that in March emerged from a six-month stretch in bankruptcy as Nu Ride Inc. Hon Hai faces a likely legal battle there as the revived US brand seeks out another partner. But as of now, it's got little to show for the investment beyond production of a small number of tractors for a California company. Hon Hai remains bullish on its auto operation and says it can reach the kind of dominance in the sector that it's built in gadgets. If that doesn't pan out, the company has a pretty good Plan B (which some at Hon Hai insist is really a Plan A+): It has partnered with Nvidia Corp. to manufacture servers geared toward artificial intelligence applications. Hon Hai already accounts for 40% of that business. Those things aren't as sexy as cars, but the segment makes up about a third of its revenue (versus a vanishingly small share for Foxtron). So look for boring ol' servers to be on prominent display Tuesday when the crowds stream into the TaiNEX exhibition hall for the company's tech expo. | 
No comments:
Post a Comment