Foxconn acquires 50% stake in ZF's axle system unit

Hon Hai Technology Group (“Foxconn”) has announced the acquisition of 50% stake in ZF Chassis Modules GmbH, in order to establish a joint venture aimed at increasing opportunities in the automotive and supply chain. The agreement is awaiting regulatory approval and is expected to take effect within six to nine months after signing.

Foxconn is the world’s largest electronics manufacturer and leading technological solutions provider, ranking in the top 20 among the Fortune Global 500. The Group’s market share in electronics manufacturing services (EMS) exceeds 40% and covers four major product segments: smart consumer electronics, cloud and networking, computing, and components and others. The group has 173 campuses in 24 countries and is one of the world's largest employers, with over 1 million employees during the manufacturing peak season. The group has expanded its capabilities to the development of electric vehicles, digital health, and robots, as well as three key technologies - new generation communication technology, artificial intelligence, and semiconductor - which are key to driving its long-term growth strategy.

ZF Chassis Modules GmbH, a unit of ZF Group which bundles the passenger car axle systems assembly. It is represented at 25 locations worldwide and has approximately 3,300 employees, of which 100 are in Germany. The business unit’s sales are expected to exceed  EUR 4 billion (USD 4.5 billion) in 2023.

“With Foxconn, we have gained a strong strategic partner with whom we can open up new perspectives and opportunities for the ZF Chassis Modules GmbH,” says ZF CEO Dr. Holger Klein. “ZF as a globally active automotive supplier and Foxconn as a leading electronics manufacturer complement each other excellently to jointly open new customer groups and expand its presence, especially in growing markets. With this step, we are implementing our strategy to grow specific business areas of ZF with the support of external partners beyond current limits.”

“I am absolutely excited about this partnership. Foxconn’s global network and supply chain management know-how, plus the expertise, diligence, and commitment that ZF Chassis brings will result in a successful execution of value-added creation for both our shareholders,” said Foxconn Chairman and CEO Young Liu. “We are also keen to explore more partnership opportunities with the ZF Group in the broader transportation and mobility space.”

Foxconn has always been an Apple foundry, the shift from electronic product manufacturing to the automotive sector is both an opportunity and a challenge for it. The strategic cooperation between both sides will further grow opportunities for ZF and widen new perspectives for Foxconn in the automotive sector. Also, the partnership will leverage each other’s capabilities and expand the range of product offerings in the internal combustion engine and especially electric vehicle.