Foxconn'S Next "Car Building": Can Byton Return To The Track?

Due to the break of capital chain, byton automobile, which has been suspended for half a year, has finally ushered in a turning point.

On January 4, byton signed a strategic cooperation framework agreement with Foxconn Technology Group and Nanjing Economic and Technological Development Zone to accelerate the mass production of m-byte, the first model of byton, and strive to achieve mass production of m-byte by the first quarter of 2022.

According to the agreement, Foxconn will provide advanced manufacturing technology, operation management experience and industrial chain resources to support the mass production of byton's first model m-byte.

Biden co CEO Ding Qingfen described the cooperation with Foxconn as "back to the track".

In fact, this cooperation can also be seen as a continuation of Foxconn and byton.

As early as 2015, Foxconn, together with harmony automobile and Tencent, signed the "Internet + intelligent electric vehicle strategic cooperation framework agreement", established Henan harmonious Futeng Internet plus intelligent electric vehicle new energy partnership (limited partnership) in accordance with the investment ratio of 3:3:4, and hatched FMC company, attracting Dai Lei, the former general manager of Infiniti in China, and the former person in charge of BMW I8 project Bi Fukang, former CEO of Volvo car china sales company Fu Qiang and other professional managers.

It is understood that FMC holds 100% of the shares of Zhixing new energy automobile Investment Management Co., Ltd., while Zhixing new energy holds 73.33% of the shares in byton. But a year later, Foxconn and Tencent withdrew one after another.

For the details of the cooperation between the two sides, byton did not give a more detailed answer. Previously, it was reported that Foxconn planned to invest 200 million US dollars in Byron automobile, a new automobile manufacturing force that had been in a standstill.

"We can't respond to the news." On January 5, the relevant person in charge of byton said in an interview with the reporter of the 21st century economic report.

Although neither side has responded to the investment, the industry believes that the cooperation between Foxconn and byton is not a simple business combination.

"Cooperation with byton is an important part of our layout of electric vehicle field, and we will try our best to help byton m-byte mass produce as soon as possible and enter the stage of electric vehicles in the world." Liu Yangwei, chairman of Foxconn Technology Group, said.

According to the agreement, Foxconn will provide advanced manufacturing technology, operation management experience and industrial chain resources to support the mass production of byton's first model m-byte. Visual China

Foxconn's "ambition" in car making

Foxconn's road to making cars dates back to 15 years ago.

In 2005, Foxconn bought 100% equity of Aetna, one of Taiwan's four largest automobile wiring harness factories, with a price of 370 million yuan, and formally set foot in the manufacture of automotive electronic products such as battery lines, video transmission wiring harness, reversing radar and intelligent equipment.

In 2010, Foxconn took over the order of Tesla supply chain, becoming the main supplier of the latter's central control touch screen, connector and lithium battery; in 2013, Foxconn became a supplier of luxury brands such as Mercedes Benz and BMW, supplying automotive electronic equipment including on-board entertainment equipment and automobile electric machinery.

In 2014, Foxconn and BAIC new energy Co., Ltd. jointly established Beijing Hengyu new energy car rental Co., Ltd., and cooperated in electric vehicle leasing, time sharing leasing, electric taxi and other businesses.

In 2016, after giving up harmony Futeng, Foxconn did not leave the automobile industry, but focused on the fields such as intelligent Internet connected electric vehicles. Since 2017, Foxconn has invested a lot in automobile related and travel fields. It has successively invested in didi travel, a new car making force, and Ningde era, a new force in car making.

In January 2020, Foxconn announced the establishment of a joint venture with Fiat Chrysler, the production of electric vehicles and the involvement in the Internet of vehicles business, thus reopening the road of vehicle manufacturing.

"The prospect of China's new energy vehicle industry in 2015 is not clear, but now, the prospect of intelligent electric vehicles has been very broad. For Foxconn, this is a good time to enter the industry. " On January 5, Zhang Xiang, an independent analyst of the automobile industry, said in an interview with the 21st century economic report reporter, "all industries, including Internet enterprises and technology enterprises, are making cars across the border. Foxconn's car making is based on the prediction of the mobile phone market and expanding business areas to balance the risks."

In fact, as the world's largest technology manufacturing and service provider in the field of R & D, manufacturing and supply chain, Foxconn's move is not a fluke.

For a long time, although Apple's business accounts for about half of the sales of Foxconn's parent company, Hon Hai Precision, Foxconn has gradually seen the ceiling of this business under the influence of factors such as the decline of global mobile phone and electronic business and the rise of domestic mobile phones such as Huawei and Xiaomi.

According to the data, the global smartphone business will decline in 2019. In 2019, China will ship 372 million smartphones, a year-on-year decline of 4.7%.

Foxconn's annual financial report in 2019 shows that the growth rate of its revenue has significantly slowed down, with a year-on-year growth rate of only 0.82%. In 2017, it was still 8%.

Anxin Securities believes that the automotive electronics industry will become another big development opportunity at the whole industry chain level after home appliances, PCs and mobile phones. At present, automotive electronics has entered a new round of technological innovation cycle, the penetration rate of automotive electronics and the value of single vehicle will be greatly improved, and the market space will exceed one trillion yuan.

The growth ceiling of smart phones is within reach, and homogenization and price war problems emerge one after another. As the next most promising intelligent terminal equipment, automobile has also become an important starting point for Foxconn and other "crossover" to seek diversified development and explore new growth points.

"Byton has a good foundation and high-quality resources. It has a certain international reputation. It also has models to be produced in mass production. It is only because the capital chain is broken. At the same time, the Nanjing government, FAW and other state-owned assets have endorsed it, so the feasibility is higher." For Foxconn why choose byton cooperation, Zhang Xiang analysis pointed out.

In addition, some people in the industry speculate that Apple will develop its own electric vehicles in the future. Foxconn, as Apple's OEM factory, can quickly strengthen its OEM strength in the field of electric vehicles by investing in byton automobile, so as to lay a foundation for OEM in advance for apple and other electric vehicle brands in the future.

It is worth noting that Liu Yangwei publicly said on October 16, 2020 that Foxconn will enter the electric vehicle field, and its goal is to seize 10% of the electric vehicle market in five years.

"Generally speaking, the risk of cross-border vehicle building is still relatively high. Although the proportion of new energy sales will reach 20% by 2025, China's new energy vehicle market is very large, but in the next five years, the number of automobile enterprises will be reduced to 15 to 20, and Foxconn's entry into the bureau also has certain risks. " Zhang Xiang further pointed out.

Can Byron return to the track?

It is worth noting that before the arrival of "White Knight" Foxconn, byton was once rumored to be affected by capital and other issues to suspend the car manufacturing business, and once again delayed the resumption of work and production plan.

Sources said that since January 1, 2021, byton's shutdown time will be extended to June 30, 2021. During this period, mainland employees in China are not available for work.

"In fact, the company arranges and adjusts the project personnel according to the current business needs. However, on the one hand, it is our internal business. There are relevant internal arrangements, and then we will communicate with all employees at an appropriate time." For the rumors of shutdown, the relevant person in charge of byton told the reporter of the 21st century economic report.

The industry believes that byton's suspension of production or financing is not in place.

It is understood that byton automobile, founded in 2017, has completed two rounds of financing. In August 2017, Suning and Fengsheng industry group, headquartered in Nanjing, led the investment of $200 million in round a financing of byton; in June 2018, byton completed a round B financing with a total amount of US $500 million. The main investors include FAW Group, tus holdings, Ningde times, etc., with an accumulated amount of about 8.4 billion yuan, and the valuation is between 1 billion US dollars and 2 billion US dollars.

In June 2020, it was forced to restructure due to the delay of round C financing. In September, the shengteng company under Byron was established. It is understood that shengteng will focus on product R & D and electric platform technology development, while Baiteng will focus on the industrial production and marketing of products, and the two management blend and complement each other.

At that time, the industry speculated that the establishment of shengteng automobile was likely to be that byton changed its identity to seek the support of the capital market and return to the car making track.

"Shengteng will be merged into bytecon. Next, we will cooperate with Foxconn in an integrated way." On January 5, Ding Qingfen told reporters of the 21st century economic report.

According to the plan, after joining hands with Foxconn, byton is also actively seeking new investors and accelerating the mass production delivery of m-byte models.

"Byton is short of capital and needs to attract investors." Zhang Xiang finally pointed out that "Foxconn has advantages in OEM and precision manufacturing, but it is still difficult for these technologies of mobile phones to be directly transferred to automobile assembly lines and realize technology sharing. More importantly, the cooperation between the two sides is the financial assistance Foxconn has brought to Byron. "

It is understood that at present, the Baiteng Nanjing intelligent manufacturing base project designed according to the industry 4.0 standard has been completed, and the installation and commissioning of advanced process equipment such as stamping, welding, coating, general assembly and battery have been completed. The first batch of trial production vehicles have been successfully offline in the first half of 2020, and relevant safety regulations have been tested. In addition, byton has obtained the production qualification of new energy vehicles in June 2020.

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