Magna had been described by the press as the “automotive Foxconn”, while Foxconn had been described as the “Asian Magna.” The two parties that were on parallel paths now may cross each other as electronics and automotive industries merge for electric cars.
Two world’s top – automotive contract manufacturer vs electronics contract manufacturer
The Canadian brand that possesses full capacity for premium car manufacturing – Magna International Inc., is one of the world’s largest car contract manufacturers (CM) which handles design all the way through assembling and helps car makers ease off the complicated production hurdles. The headquarter sits in Ontario, Canada, and the factory is set up in Graz, Austria.
Magna has long been a partner with a handful of major carmakers, such as Benz, BMW, Volkswagen, Jaguar. The procedure for automotive production is niche and laborious, and the market had been shrinking before electric vehicles became a spotlight for tech companies. Magna has been keenly looking into the electric car industry.
On the other side of the globe in China, sits the factories of Foxconn. Foxconn, the major partner of the electronic manufacturer for Apple products as well as assembling Kindle for Amazon, is also reaching into the heating electric car manufacturing market.
Foxconn is experienced in the ICT industry. Being the globally leading EMS company, with a comprehensive global supply chain in place, it has proactively teamed up with various automotive makers in the Chinese market in minimizing the barrier to play a part in the automotive market and ramp up industrial knowledge.
Outsourcing hardware manufacturing could be the trend
The press predicts tech giants jumping into the market would be looking into contract manufacturing for the hardware construction of the “next-generation” electric automotive to allocate their main focus on the profitable and key competitive strengths of software development.
Manufacturing companies are therefore positioning themselves to benefit from new electric vehicle trends.
Paving out the road map in the heating market
China has both the largest number of buyers and also manufacturers of electric vehicles. As the market is reaching maturity, rivals are stretching into the battlefield.
Magna announced forming joint ventures with Beijing Electric Vehicle Co. Ltd (BJEV), a subsidiary of the BAIC Group for electric cars, for complete vehicle manufacturing as well as engineering of electric vehicles. The plant, based in Zhenjiang, Jiangsu Province is said to have the capacity to build up to 180,000 vehicles per year.
This is the first time Magna manufactured vehicles are produced outside the complete manufacturing site in Austria.
Last December, Magna also tied up with LG Electronics to create a joint venture in building electric car gears including e-motors, inverters and electric drive systems in Nanjing, China and Incheon, Korea. LG helps the scale of manufacturing for electrification components, while Magna brings in the software and systems integration.
Meanwhile, Foxconn has also laid out a road map for cooperation. Since the announcement of their 3+3 strategy targeting the EV industry, they have signed contracts with Yulon Motor Co. and Fiat Chrysler Automobiles N.V. (FCA).
Just from the beginning of 2021, Foxconn has already announced two further cooperations with the Chinese EV startup Byton and the Chinese automotive industry veteran Geely, respectively. It is said Foxconn could help Geely innovate technical transitions and learn from Byton about the new EV industry, benefitting from the partnerships.
What are the opinions?
Apple has not disclosed details about the new Apple car, leaving many to guess where Apple, the likely future rival for Tesla, is going. The Evercore ISI analyst, Chris McNally states his opinion, “If Apple is serious about building a car… Magna Steyr should build it.”
According to Bloomberg, Magna emphasizes their capability in the complete process of car productions; while Young Liu, Chairman of Foxconn stated that Foxconn will be focusing solely on supplying electronic parts, supply chain management and platform development, leaving manufacturing to other parties.
With the jigsaw puzzle of the electric vehicle market gradually sorting out, it is yet to see how each stakeholder will be placed in the big picture.