iPhone-maker Foxconn open to buying Renault's stake in Nissan
What's the story
Foxconn, or Hon Hai Precision Industry, has shown interest in buying Renault SA's stake in Nissan Motor Co. The deal could give a much-needed boost to the struggling Japanese automaker.
Hon Hai Chairman Young Liu revealed the news at a recent company event.
Liu also revealed that his firm will announce a new Japanese client for its electric vehicle (EV) contract manufacturing business in Q1 2025.
Business expansion
Foxconn's diversification strategy and potential collaboration
Foxconn, the top iPhone and electronics maker for global brands, has previously eyed the French firm's 36% stake in Nissan.
Now, the company is looking at new sectors, such as electric vehicles (EVs), to offset slowing smartphone sales.
Liu said that while Foxconn was watching Honda and Nissan's integration plans, their main goal is collaboration, not acquisition.
Market response
Nissan's stock performance and future prospects
Following Liu's remarks, Nissan's shares briefly recovered in Tokyo before continuing their downward trend, with a 6.5% drop during afternoon trading.
The Japanese automaker has been grappling with leadership changes and an outdated product range for several years now.
A potential merger with Honda could have positioned it as one of the world's largest car manufacturers, but these discussions are now reportedly being discontinued.
Industry impact
Foxconn's potential involvement in Nissan: A lifeline or risk?
Daiwa Securities Senior Strategist Shuji Hosoi suggested Foxconn's involvement could potentially save Nissan.
However, he also warned of the significant risk that Nissan might be reduced to an assembly manufacturer, like Sharp Corp., which was on the verge of bankruptcy before receiving capital from Hon Hai in 2016.
Despite a surge in demand for NVIDIA Corp. servers powering AI development over the past year, Foxconn has struggled to establish a firm foothold in the EV sector.