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Foxconn is the world's largest electronics foundry, and its customers include well-known brands such as Apple, Huawei, and Xiaomi. Foxconn's founder, Terry Gou, is a visionary entrepreneur who has built a huge production base in Chinese mainland, laying a solid foundation for Foxconn's growth.
However,In recent years, Mr. Gou has faced a difficult choice: whether to stay in China or follow Apple's lead and move production to IndiaGou's choice will have a significant impact on Foxconn's futureAnd India's strongest conglomerate, the Tata Group, is also secretly waiting for an opportunity to try to hunt down Foxconn's Indian factory.
Foxconn's development in China can be traced back to 1988, when Gou led Hon Hai Technology Group into Chinese mainland and started the foundry business. Due to the huge market potential, preferential policies and low labor costs in Chinese mainland, Foxconn expanded rapidly, established multiple industrial parks, and employed millions of employeesIt provides high-quality electronic products for major brands around the world.
Foxconn's success in China also benefits from China's perfect industrial chain, whether it is raw materials, parts, logistics, servicesAll of them can ensure Foxconn's production efficiency and cost control. Foxconn's foundry business in ChinaIt accounts for more than 80% of its global revenue, creating huge profits for Foxconn.
Foxconn's development in China has also encountered some challenges, mainly from two aspects: one is the gradual rise in China's production costs, and the other is the United States' first-class war and technological blockade. To meet these challenges, Foxconn began to seek new markets and production bases, and India became its first choice.
India has a huge population and market, and has also introduced a series of preferential policies to encourage foreign investment. Foxconn's investment in India is mainly to meet the needs of Apple, which hopes to produce and sell iPhones in Indiato reduce costs, increase market share, and reduce dependence on China.
Foxconn has invested $6.5 billion in India, planning to build multiple factories in India, employ tens of thousands of people, and provide OEM services for Apple. However, Foxconn's development in India did not achieve the desired results, but fell into trouble.
India's workers are of low quality, low production efficiency, low motivation for work, and frequent strikes, leading to frequent shutdowns of Foxconn's production linesDelivery of orders cannot be guaranteed. India's backward infrastructure, unstable power**, unsmooth logistics, complex taxation, and unsound laws have brought many difficulties and risks to Foxconn's production and operation.
India's industrial chain is also not perfect, and most of the parts and components of the iPhone produced by Foxconn in India need to be imported from China, which increases the cost and time of transportation, and also increases the risk of tariffs and exchange rates.
These questions,Foxconn's investment in India has become risky and low-return, and Foxconn's position in India has been seriously threatened.
Foxconn's predicament in India has put Gou in a dilemma, he can either continue to invest more resources in India and try to improve Foxconn's production environment in India, maintain the cooperative relationship between Foxconn and Apple, or abandon the investment in India and return to China, focusing on Foxconn's advantages and market in China.
If Gou chooses to continue investing in India, he will face competition and threats from the Tata Group, India's strongest conglomerate. The Tata Group is India's largest industrial conglomerate, involved in various sectors such as automobiles, steel, telecommunications, software, energy, etc., with strong capital and resources, as well as a deep political and social background.
Tata Group at the beginning of 2023,Acquired Foxconn's partner in India, India's largest mobile phone manufacturer, Micromax, thus entering the field of electronic product foundry. The goal of the Tata Group is to become the Foxconn of India, providing OEM services to Apple and other brands, while also developing its own brands and products to seize market share in India.
Advantages of the Tata GroupIt is its localization in India, which can better adapt to India's market demand and consumption Xi, and can also make better use of India's policies and tax incentivesand to be able to better manage workers and social relations in India.
Conclusion
Foxconn's investment in India is a major decision for Gou, which will affect Foxconn's global competitiveness and future. Gou will either continue to invest in India or abandon it, and whatever choice he makes, he will face huge challenges and risks.
It is still unknown whether Terry Gou can be ruthless to deal with India's predicament, resist the hunt of India's strongest consortium, and maintain Foxconn's position in India. We will continue to follow Foxconn's development in India and look forward to Terry Gou making a wise choice to open up a new path for Foxconn's future." What are your thoughts on this?