Fiat Chrysler planning to make electric cars with iPhone manufacturer

Fiat Chrysler planning to make electric cars with iPhone manufacturer

Italian American automaker Fiat Chrysler (FCHA.MI) and the parent of iPhone assembler Foxconn plan to set up a joint venture to manufacture electric vehicles and to engage in the business of wirelessly connected vehicles, Hon Hai said on Thursday.

Meanwhile, Great Wall Motor has agreed to buy General Motors' (GM) auto plant in India, the companies said on Friday, as the Chinese automaker expands overseas amid slowing domestic demand.

Fiat Chrysler, which agreed to merge with Peugeot and Citroen owner Group PSA in October a year ago, would be in charge of traditional manufacturing.

Initially, Fiat Chrysler and Foxconn will aim to mass produce electric vehicles in China and will expand to foreign markets after the foundation is laid in the Southeast Asian country. Both Fiat Chrysler and Peugeot have experienced delays in the development of electric drives and have had problems increasing sales in China, the world's largest vehicle market.

Two unlikely companies can join forces to face China.

If a deal was concluded with Foxconn, a joint venture would first focus on China, the largest market for electric cars with 1.2 million vehicles sold a year ago - half the global total.

It "would enable the parties to bring together the capabilities of two established global leaders across the spectrum of automobile design, engineering and manufacturing and mobile software technology to focus on the growing battery electric vehicle market", it said.

FCA said it is working on a preliminary agreement and that in the coming months it will work on final binding agreements.

Auto manufacturers around the world have announced a series of electric vehicle partnerships to share the high costs of technological development.

While Chinese consumers buy more electric vehicles than anywhere else in the world, sales have slumped since the government pared back subsidies amid a broader downturn in market demand.

The trend has led to a complicated mix of tires between competitors.

Daimler AG's Mercedes Benz has electric vehicle joint ventures with both BYD Auto, one of the biggest global makers of battery-powered vehicles, and rival Geely Holding, which is best known overseas as the owner of Sweden's Volvo Cars.

In addition to its stake in PSA Peugeot, Dongfeng also has joint ventures with Nissan Motor Co., Kia Motor Co. and Groupe Renault, all of which include electric models.

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