- Renault's Involvement: Foxconn is considering acquiring a stake in Nissan from Renault, which currently holds a 36% share.
- Foxconn's Intent: Foxconn Chairman Young Liu stated, “If taking a stake is necessary for cooperation, we will consider it, but buying shares is not our main goal. Our primary goal is cooperation.”
Nissan faces severe challenges:
- Profit Decline: A staggering 90% drop in operating profit for the first half of 2024.
- Market Reaction: After the end of the merger talks, Nissan's stock fell 6.3%, and its market cap has dropped 34% over the year to $10.34 billion.
- Time is Running Out: Executives estimate that Nissan has only 12 to 14 months left to find a viable solution.
Foxconn, currently valued at more than ten times Nissan, aims to become a major player in EV assembly:
- Low-Cost Assembly Model: Similar to its role with Apple, Foxconn seeks to offer cost-effective manufacturing options for automakers.
- Model Showcase: Recently, Foxconn unveiled EV "reference models," including a minivan and a small bus, expanding its lineup available for customization by automakers.
While successful in earlier ventures, acquiring a stake in Nissan could enhance Foxconn’s capabilities; however, challenges remain:
- Strategic Expertise: Partnering with Nissan could give Foxconn valuable automotive technology and a global presence.
- Management Concerns: Some critics argue that Nissan's leadership has struggled to define the company's identity and purpose in a competitive market.
The fallout from the Nissan-Honda merger has put Foxconn back in the spotlight as a potential savior for the struggling automaker. With its ambition to become a significant force in EV production, Foxconn’s partnership could provide Nissan with the resources needed to navigate its ongoing crisis, although internal management issues may pose a greater challenge.
