iPhone manufacturers on a shopping spree
What does Foxconn want with the Swabian auto supplier?
By Jannik Tillar and Victoria Robertz
01/14/2023 3:38 p.m
The German medium-sized company Prettl sells its most important subsidiary to Asia. The buyer is iPhone supplier Foxconn, which is controversial because of its working conditions. The Taiwanese group is pursuing ambitious goals. Experts are skeptical.
The world’s largest electronics supplier Foxconn, which was recently in the media due to adverse working conditions and delivery problems, is pushing with all its might into the market for electric cars. The first models were presented last year. The company’s goal was a market share of five percent by 2025 – an ambitious plan.
Experts such as Martin Gehring from the management consultancy Simon Kucher and Partners describe the targeted growth as “overambitious” and “unrealistic”. It took Tesla years to build up its market share. In addition to the meanwhile successful established manufacturers, up to 20 new companies would push into the car market in the next few years – a large number for a narrow market like this. This can already be seen in the falling Tesla market share, which has fallen from almost 80 to 65 percent within two years. “By 2030, five percent might be possible if you invest properly and extremely,” Gehring told the business magazine “Capital”.
The acquisition of Prettl SWH should now be a building block for the growth strategy in the e-car market. The buyer FIT, specializing in communication software, sensors and high-speed connections for electric cars, acts as a supplier for its own parent company. FIT spokeswoman Jing-Han Yang told Capital that they believe in Foxconn’s plans, but as a company they are pursuing their own strategy. “Prettl and FIT have a lot in common,” promises Yang. “Their expertise in sensor cables and interconnects aligns with our own core areas.” Already in 2021 they started to talk about a takeover.
FIT buys the “spider in the web” with SWH
The interest in Prettl SWH does not surprise automotive expert Gehring. “Once you’ve identified cabling as the core of your strategy, it makes perfect sense to buy in the know-how,” says Gehring. “Prettl is a renowned provider in the field and has solid technology for e-mobility. They are also future-oriented and know how a car is networked.” According to Gehring, cable technology will become even more important in the future. A wiring harness is like a “spider in the web” and central to the entire architecture of the car and data transmission.
For the family business founded in 1953, however, the sale means a massive cut. The majority of the approximately 10,000 employees were previously employed by the Prettl SWH business unit with its focus on sensors and special cables. There are now other subsidiaries in business areas such as plastics production, electronic systems, energy supply and automotive, where further expertise is available, for example in metal and lighting technology exists. In 2021, Prettl SWH also accounted for the lion’s share of the turnover of the entire group of companies with 351 million euros.
Private equity firm as a driver?
A statement states that Prettl sees itself well positioned for the future and will “focus on the special markets of rail and bus, heavy-duty, agriculture, charging technology and new energy”. The company did not want to answer any further questions when asked.
Prettl SWH was spun off from the existing company in 2015 and now operates in 13 countries, primarily in Asia and Europe. The private equity company Trinity has been investing in SWH since 2015, which is also selling its shares to FIT after eight years – and which can be assumed to have played an active role in the sales plans.
This article first appeared on Capital.de