MILAN (Reuters) – Carmaker Stellantis and iPhone assembler Foxconn plan to create a joint venture to supply in-car and connected-car technologies across the auto industry, they said on Tuesday.
The two companies have signed a non-binding memorandum of understanding to form Mobile Drive, a 50-50 joint venture based in the Netherlands focused on infotainment, telematics and cloud service platform development.
Stellantis Chief Executive Carlos Tavares said the partnership with Foxconn was one of the bricks in the group’s business plan, which is expected between the end of this year and the beginning of 2022
“It is a ‘must’ of our future strategic direction,” he said.
The partnership however appears less extensive than the market had expected, after Fiat Chrysler, now part of Stellantis, said last year it was planning to set up a joint venture with Hon Hai Precision Industry, Foxconn’s parent company, to build electric cars and develop internet-connected vehicles in China.
The deal also leaves open questions on how Stellantis plans to pursue one of its main goals, a relaunch in Asia, where it currently makes less than 3% of its revenues.
Stellantis Chief Software Officer Yves Bonnefont said the decision to enter a joint venture with Foxconn was mainly driven by the need to move fast and to access the best expertise available.
No financial details of the tie-up were disclosed.
Mobile Drive will operate as an automotive supplier, aiming to provide software systems and related hardware both to Stellantis and other interested automakers, the companies said in a joint statement.
The software developed will include artificial intelligence-based applications, 5G communication, upgraded over-the-air services, e-commerce opportunities and smart cockpit integrations, to connect software and apps to the car’s wider systems.
Milan-listed shares in Stellantis were up 0.9% by 1120 GMT, slightly outperforming Milan’s blue-chip index.
(Reporting by Agnieszka Flak; Additional reporting by Giulio Piovaccari in Milan, Nick Carey in London and Gilles Guillaume in Paris; Editing by Valentina Za and Jan Harvey)
