STLA Stellantis NV

By Nora Naughton and Yoko Kubota 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 17, 2020).

Fiat Chrysler Automobiles NV plans to develop electric vehicles with contract-electronics giant Foxconn Technology Group, according to a regulatory filing, as the Italian-American auto maker looks to make up ground in the market for battery-powered cars.

Foxconn said in a filing in Taiwan on Thursday that it is establishing a joint venture with Fiat Chrysler to develop and produce electric vehicles as well as operate internet-connected vehicles. Foxconn's ownership in the joint venture would be 40% or less, the Taiwan-based company said.

A Fiat Chrysler spokeswoman at the company's Detroit-area headquarters declined to comment.

For Foxconn, the move comes as it seeks to expand beyond electronics and boost profitability. Formally known as Hon Hai Precision Industry Co., Foxconn is the main assembler of Apple Inc.'s iPhones, sales of which have been slowing as customers hold on to smartphones longer and competition heats up from Chinese cellphone makers.

The tie-up with Foxconn could boost Fiat Chrysler's efforts to sell electric vehicles in China, where global car companies are pouring investment into battery-powered cars to meet government regulations. The company has invested less in electric-vehicle development than rivals and is confronted with increasingly strict emissions regulations in China, the world's largest market for battery-powered cars, and in Europe.

A planned merger with French auto maker PSA Group is aimed in part at accelerating its development of advanced technologies, including electrified vehicles.

China has long been a challenge for Fiat Chrysler. Even its global Jeep brand initially failed to catch on with Chinese consumers. In the third quarter, its financial results for Asia were dragged down by lower demand in China, the company said.

Foxconn's chairman, Young Liu, said during an investor call in November that electric vehicles were one area the company was focusing on for growth.

At that time, executives said Foxconn wouldn't be building an entire car but rather a chassis platform for car makers using unspecified modules from the company. They also said the company had talked with some car makers and electric-vehicle startups.

Industrywide vehicle sales in China fell for a second consecutive year in 2019, with auto industry executives warning of another tough year ahead in the world's largest car market.

General Motors Co. this month reported its biggest annual sales decline in China, down 15% in 2019. GM is the second-largest foreign auto maker in China by sales behind Volkswagen AG. Fiat Chrysler doesn't break out its China sales.

Even though Chinese regulations are pressuring car companies to introduce battery-powered cars, sales of electric vehicles have been falling with the phasing out of government subsidies. China's electric-vehicle sales fell six straight months through the end of 2019.

China's government earlier this month signaled it wants to continue to support electric-vehicle adoption and that subsidies would remain stable this year.

Corrections & Amplifications General Motors this month reported its biggest annual sales decline in China, down 15% in 2019. GM is the second-largest foreign auto maker in China by sales behind Volkswagen AG. Fiat Chrysler doesn't break out its China sales. An earlier version of this article omitted the word "foreign" before "auto maker." (1/16)

Write to Yoko Kubota at yoko.kubota@wsj.com

(END) Dow Jones Newswires

January 17, 2020 02:47 ET (07:47 GMT)

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