Car Market Undeterred by COVID-19 in Q1

Although the escalation in COVID-19 spread worldwide is broadly making consumers less willing to spend, the local car market in Taiwan appears undaunted, with sales rising more than 3.1 percent with 30,822 registered cars in the first quarter of 2020 compared to the same period last year, according to government statistics.

Taiwan-based manufacturing giant Hon Hai Precision Industry Co., which has entered electric vehicle development to diversify its product portfolio, is planning to put up car components for sale in 2021.In an investor conference held Tuesday, Hon Hai Chairman Liu Young-way said the company will target the hybrid car market by providing components such as electric car cell modules and engines in two years and is expected to launch components for pure electric car use after that.

Under the agreement with Yulon, the joint venture will involve a Yulon subsidiary, Hua-Chuang Automobile Information Technical Center Co. (HAITEC), to set up an open car design platform.Despite no efforts in car assembly, Liu said Hon Hai is gearing up to build up its ability to manage a supply chain in the car industry.In addition to the development of electric car battery modules and engines, Liu said Hon Hai will use its car design platform for chassis development, hoping to standardize those products.

Industrial sources close to the deal with Yulon said HAITEC has a workforce of 500-600 employees and ample resources in electric vehicle development, adding that the deal shows Hon Hai's determination to penetrate the electric car business. It is possible that HAITEC will become one of Hon Hai's subsidiaries in the future, the sources said.

Both aspects of the proposed partnership with Fiat Chrysler -- the manufacture of electric cars and the entry into the Internet of Vehicles (IOV) business -- are aimed at tapping into the huge Chinese market initially and into other markets later, Hon Hai has said.

The industrial resources said the joint venture with Yulong will focus on the Taiwan auto market.The Taiwanese company has shown its ambitions to transform from pure contract manufacturing to a company that integrates its capability in hardware and software development.