This article examines the possibility that Taiwan’s Hon Hai Precision Industry could deepen its involvement in Japan’s automotive industry by using contract EV manufacturing for Mitsubishi Motors as a foothold. It explains the reality of the strategy surrounding vertical integration and its potential impact on Japanese automakers, drawing on expert views.
Hon Hai has indicated that it may deepen its involvement in Japan’s automotive industry through contract EV manufacturing for Mitsubishi Motors. The article examines the strategic background to contract EV manufacturing and considers the competitive advantage that Hon Hai’s vertically integrated business model is seeking.
The author cites the successes and failures of vertical integration at Tesla, BYD and Nissan, noting that competitiveness depends on which areas a company controls in-house and when it expands integration. The article contrasts BYD’s vertical integration starting with batteries with Tesla’s strategy of developing software in-house, and points to the challenges that Hon Hai’s contract manufacturing could pose for Japanese automakers.
In conclusion, the article argues that the benefits of vertical integration depend on sales scale and the balance of investment, and presents the view that Hon Hai’s example could raise questions about the limits of Japanese companies’ in-house approach.