Tech Insider: China Probes Foxconn Affiliates, AI Startup Zhipu Wins Big Tech Support

Dongfeng Motor consolidates manufacturing with JV asset sale, EV-maker Nio reboots sales strategy amid China’s crowded car market

Multiple Foxconn affiliates involved in mainland probes, local unit says

Multiple Foxconn-affiliated entities are being investigated by Chinese authorities as part of probes into the company’s mainland facilities, Caixin confirmed on Monday with Foxconn Industrial Internet Co. Ltd., the Taiwanese electronics giant’s Shanghai-listed arm.

The securities office of Foxconn Industrial Internet said the reason behind the investigations is currently unclear. The company told Caixin that it cannot immediately determine the impact on its business but added that it is cooperating with the probes.

State-linked newspaper Global Times first reported on Sunday that the major Apple Inc. contractor, also known as Hon Hai Precision Industry Co. Ltd., was facing tax and land-use probes into its mainland facilities.

Foxconn said in a stock exchange filing the same day that it will “actively cooperate with the relevant units on the related work and operations.”

The key assembler of iPhones and MacBooks has started to significantly build up its manufacturing presence outside of China, including in India, to hedge the risk of being caught up in mounting tensions between Beijing and Washington.

Dongfeng Motor consolidates manufacturing with JV asset sale

Dongfeng Motor Group Co. Ltd. will acquire automotive assets from its joint venture (JV) with Stellantis NV, as part of the state-owned carmaker’s strategy to consolidate its manufacturing resources amid weak car sales in China.

Dongfeng Peugeot Citroën Automobile Co. Ltd. (DPCA) will sell assets including land-use rights and real estate in Wuhan and Xiangyang, Hubei province to Dongfeng Motor via a 1.71 billion yuan ($234 million) deal, the Chinese firm said in a Hong Kong exchange filing Thursday.

The assets have been used by DPCA mainly to produce Peugeot, Citroën and Fukang models, and the JV will continue making the cars under a 10-year leasing agreement. Dongfeng Motor and Netherlands-based auto giant Stellantis remain equal owners of the venture, the filing said.

In the first nine months of 2023, DPCA sold 63,774 vehicles, down nearly 30% from the same period last year, according to sales figures disclosed by Dongfeng in October.

Beijing AI startup raises $342 million from big tech

Generative artificial intelligence (AI) startup Beijing Zhipu Huazhang Technology Co. Ltd. said Friday that it had raised 2.5 billion yuan ($342 million) from a group of heavyweight Chinese tech investors including Alibaba Group Holding Ltd., Tencent Holdings Ltd., Xiaomi Corp. and Meituan, in another show of growing interest in Chat-GPT-like services.

Zhipu was among the first batch of Chinese companies to win government approval for a public rollout of its service in August. It has since released an open-source model as well as a chatbot called Qingyan.

Nio reboots strategy to boost sales in China’s crowded car market

From startup to prominent brand, Chinese electric-vehicle (EV) maker Nio Inc. entered the industry when it was still budding and rode the wave of demand to the top, where it is now facing competition from an influx of new and traditional carmakers.

To combat challengers eating away at its market share, the automaker has shifted strategies to prioritize sales and boost production.

From the second half of 2022, Nio’s monthly delivery volume stagnated at around 10,000 units, prompting the company’s founder William Li to say in April that if monthly sales remained at the same level, he and Qin Lihong, Nio’s co-founder and president, “would have to start looking for jobs elsewhere.”

The figures worsened for April and May, with factors such as product upgrades causing monthly deliveries to plummet to below 7,000 units. This weighed on market sentiment: When Nio announced its May sales on June 1, its share price dropped to $7 for the first time since June 2020.

But the company adapted and in July hit a significant milestone by delivering over 20,000 units for the first time.