More Automakers Embracing Tech & EV: Are You Ready?
As we see more and more automakers initiating talks and moving forward with considerations for tech and EV enhancements, the automotive industry shifts one step closer to significant changes. You may be wondering what your dealership can be doing now to anticipate these impending industry shifts, and what headlines like these should mean for your dealership growth potential. We dove into the latest announcement of Fiat-Chrysler confirming talks with Foxconn Technology Group, to find out what these talks may imply for you.
The Announcement & Official Details
Fiat-Chrysler Automobiles NV (FCA) acknowledged last week that it’s officially in discussion with the Taiwanese electronics company, Foxconn Technology Group (Hon Hai Precision Industry Co.). Their plans include a joint venture to develop electric vehicles for the Chinese market. The announcement is available in the recent regulatory filing, offering details of the intention to pursue plans for a new vehicle. According to statements within the filing, each party will own 50% of the venture and together will develop and manufacture electric cars.
Why This Partnership Makes Sense
This may be a match made in EV heaven. Fiat-Chrysler has fallen behind in the battery-powered auto segment. Foxconn is looking to broaden its business ventures beyond the electronic components. The Chinese automotive industry, in general, took a hit for a second straight year in 2019 vehicle sales, which tells us why FCA is looking for a way to get back in the game there. Foxconn, more famous for its iPhone manufacturing contract, will potentially partner with FCA to build an entirely new model EV altogether, not to enhance any existing portfolio models. A project this big could have huge growth potential for both companies and in a Chinese market where electric cars are in high demand. Chinese regulations are helping out too. Chinese guidelines pressure automakers to introduce battery-powered vehicles, and government officials confirmed it wants to continue to implement the subsidies to help automakers develop EVs.
How Does This Affect Your Dealership?
For now, this announcement doesn’t mean you can anticipate any immediate changes at the dealership level. In fact, this project is entirely based on production and sales in China. There was, however, mention of exporting to this side of the pond, contingent on the success of the new EV creation. So, while you don’t have to worry about a Fiat electric car, with iPhone popularity hitting the U.S. market right now, you may want to keep your finger on the pulse of the EV impact overseas.
Keeping an Eye on an Industry Transitioning to Include EV
The savviest dealers will want to keep an eye on how these trends continue to manifest, thus shifting the automotive industry overall. We might suggest keeping an eye on how this latest talk with FCA and Foxconn evolves in China. How the talks progress and the market reacts overseas can be a window into your dealership future. Staying ahead of the electric curve, can mean the difference between being ready for an EV explosion here in the states, and lagging behind when consumers stop buying your combustion inventory.
There are no guarantees on delivery of this EV product just yet. However, as more automakers become willing to engage in talks with tech-giants, it may be a sign of not only more electric cars, but an entire market shift to a tech-based product, and tech-savvy dealers ready to capitalize on it.