Taiwan’s electronic components giant Hon Hai Precision Industry Company Ltd, more widely known as Apple’s iPhone subcontractor Foxconn, is in talks to acquire all or some of Renault’s stake in Nissan Motor, according to local reports.

Renault remains Nissan’s largest single shareholder with a 35.7% stake as of the end of September 2024, down from 43.4% a year earlier, with the French automaker looking to continue selling down its stake.

The news comes as Nissan is understood to have initiated merger talks this week with fellow Japanese carmaker, Honda Motor, as part of a move to strengthen their collaboration and increase economies of scale to help them compete with a surging Chinese automotive industry and US manufacturer Tesla in the global battery electric vehicle (BEV) market. The planned merger is expected to be expanded to also include Mitsubishi Motors.

Honda and Nissan have collaborated on various projects over the years, including in mini-vehicle segments, commercial vehicles and key technologies such as hybrid powertrains, autonomous driving and electronics/IT.

Analysts are speculating that the merger talks between Nissan and Honda, which launched a strategic partnership in the BEV segment earlier this year, may have been fast-tracked to prevent a foreign takeover of Nissan. After all, it was only five years ago that Nissan ousted former CEO Carlos Ghosn, who helped save Renault and then Nissan from their earlier struggles.

Foxconn has built its own BEV platform and has established a number of BEV partnerships and ventures around the world, including the takeover in 2022 of a former GM plant in the US state of Ohio from Lordstown Motors - a company set up by a management buy-out team. Despite Foxconn’s stated ambitious plans, production at the plant has yet to be ramped up.

According to a report in Taiwan, Jun Seki - chief strategy officer at Hon Hai’s BEV division and former Nissan Motor Chief Operating Officer (COO), first approached Nissan about his company’s interest in buying its shares – but the Japanese automaker “did not respond in a favorable manner.” Hon Hai subsequently decided to contact Renault directly about acquiring its stake.