Hon Hai Eyes Renault's Nissan Stake amid Japanese Carmaker's Struggles

Taipei, Taiwan - Hon Hai Precision Industry Co. (2317.TW) has expressed interest in acquiring Renault SA's (RNO.PA) stake in Nissan Motor Co. (NSANY), a move that could provide a lifeline to the ailing Japanese automaker.

Hon Hai Chairman Young Liu revealed to reporters that the company has approached both Nissan and Honda Motor Co. (HMC) regarding potential collaborations. Hon Hai, Apple Inc.'s primary production partner, previously considered acquiring the French firm's 36% holding in Nissan.

Hon Hai's Expansion into EVs

Aiming to offset declining smartphone sales, Hon Hai has been venturing into new areas, including electric vehicles. The company has been closely monitoring the situation as Honda and Nissan explored the integration of their businesses, which is now uncertain.

"If there's an operational need, we will consider it," Liu stated regarding the possibility of Hon Hai purchasing Renault's Nissan stake. "But buying the stake isn't our goal — our goal is cooperation."

Nissan's Financial and Operational Struggles

Nissan has faced challenges with leadership turnover and an aging vehicle lineup. A potential alliance with Honda would have created one of the largest automakers globally, allowing them to better navigate the rapid technological advancements in the industry.

Hon Hai's Potential Impact

Analysts believe that Hon Hai's involvement could help Nissan survive as a company but caution that it may also come at the cost of Japanese employment and economic well-being. Some speculate that Nissan could face a fate similar to Sharp Corp., an electronics manufacturer which was rescued from bankruptcy by Hon Hai in 2016.

Hon Hai's Focus on Partnerships

"From Hon Hai's point of view, it is not a merger case but a partnership," Liu explained. "We met with many companies, and Nissan and Honda are among them."

Hon Hai has benefited from increased demand for Nvidia servers used in AI development over the past year. However, it has yet to establish a strong foothold in the electric vehicle market.