By Nora Naughton and Yoko Kubota 

Fiat Chrysler Automobiles NV plans to develop electric vehicles with contract-electronics giant Foxconn Technology Group, according to a regulatory filing, as the Italian-American auto maker looks to make up ground in the market for battery-powered cars.

Foxconn said in a filing in Taiwan on Thursday that it is establishing a joint venture with Fiat Chrysler to develop and produce electric vehicles as well as operate internet-connected vehicles. Foxconn's ownership in the joint venture would be 40% or less, the Taiwan-based company said.

A Fiat Chrysler spokeswoman at the company's Detroit-area headquarters declined to comment.

For Foxconn, the move comes as the company seeks to expand beyond electronics and boost profitability. Formally known as Hon Hai Precision Industry Co., Foxconn is the main assembler of Apple Inc.'s iPhones, sales of which have been slowing as customers hold on to smartphones longer and competition heats up from Chinese producers offering lower-price handsets.

The tie-up with Foxconn would be one of Fiat Chrysler's most significant efforts at selling electric vehicles in China, where global car companies are pouring investment into battery powered cars to meet government regulations. The company has invested less in electric-vehicle development than rivals and is confronted with increasingly strict emissions regulations in China and Europe.

A planned merger with French auto maker PSA Group is aimed in part at accelerating its development of advanced technologies, including electrified vehicles.

China has long been a weak spot for Fiat Chrysler, as its global Jeep brand initially failed to catch on with Chinese consumers. The company's third-quarter financial results in the Asia market were dragged down by lower demand in China, the company said.

Foxconn's chairman, Young Liu, said during an investor call in November that electric vehicles were one area the company was focusing on for future growth.

At that time, executives said Foxconn wouldn't be building an entire car but rather would be build a chassis platform for car makers, using its own modules, without specifying what those modules are. They also said the company has talked with some car makers and electric-vehicle startups.

Industrywide vehicle sales in China fell for a second consecutive year in 2019, with auto industry executives warning of another tough year ahead in the world's largest car market.

Fiat Chrysler rival General Motors Co. reported its biggest sales decline in China earlier this month, down 15% last year. GM is the second-largest auto maker in China by sales behind Volkswagen AG. Fiat Chrysler doesn't break out its China sales.

Even though Chinese regulations are pressuring car companies to introduce battery-powered cars, sales of electric vehicles have been falling, after the bulk of the government's subsidies for green cars expired. China's electric-vehicle sales fell six straight months through the end of 2019.

China's government earlier this month signaled it wants to continue to support electric-vehicle adoption and that subsidies would remain stable this year.

Write to Yoko Kubota at yoko.kubota@wsj.com

 

(END) Dow Jones Newswires

January 16, 2020 15:22 ET (20:22 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
Stellantis NV (BIT:STLA)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024 Click aqui para mais gráficos Stellantis NV.
Stellantis NV (BIT:STLA)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024 Click aqui para mais gráficos Stellantis NV.