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Jeep Maker Stellantis Teams Up With Foxconn on In-Car Software

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Jeep and Chrysler maker

Stellantis

STLA -0.49%

NV is joining forces with iPhone assembler

Foxconn Technology Group

2317 8.96%

in a new collaboration aimed at accelerating the development of in-car software.

The world’s third-largest car company by sales said Tuesday that the 50-50 joint venture, dubbed Mobile Drive, would focus on technology used in vehicle dashboard systems and other connected services.

The companies said the JV, which will be based in the Netherlands and sell its software to other car makers, would combine Stellantis’s expertise in vehicle design and engineering with Foxconn’s know-how in software and consumer electronics.

The move comes as auto makers are racing to compete with

Alphabet Inc.’s

Google, Apple Inc. and other Silicon Valley giants for control of the dashboard display and other connected car features. Many car makers are betting that future growth and profits could come less from building and selling cars and more from features like connected car services and apps, a business model that is closer to the tech industry.

Stellantis Chief Executive

Carlos Tavares

said the JV with Foxconn would enable “the swift development of connectivity features and services that mark the next great evolution of our industry, just as electrification technology has.”

The companies didn’t disclose how much they planned to invest in the JV but said it would have 250 engineers, mostly based in Asia.

Not all such arrangements pan out as intended. For example, Foxconn last year said it planned to establish a joint venture with Stellantis predecessor Fiat Chrysler to develop and produce electric vehicles, but the deal hasn’t yet been finalized.

A Stellantis spokeswoman said discussions on the electric vehicles partnership were ongoing.

Foxconn, formally known as Hon Hai Precision Industry Co., has been pushing into the auto industry as part of an effort to diversify its business beyond what it is best known for—assembling iPhones. The contract electronics company has announced a slew of tie-ups with both nascent and traditional car makers to collaborate on development and manufacturing.

Earlier this year, Foxconn said it would assemble cars for electric-vehicle startup

Fisker Inc.,

its first agreement to manufacture vehicles for an automotive company. The Taiwan-based company has also formed partnerships with China-based electric-vehicle companies Zhejiang Geely Holding Group and Byton, and launched a platform called MIH that offers manufacturers a customizable framework for building electric and self-driving cars.

For Stellantis, the Foxconn deal is one of Mr. Tavares’s first big moves since taking the helm of the company, forged in January by the combination of Fiat Chrysler and Peugeot-maker PSA Group.

Mr. Tavares has pledged to unveil a long-term strategic plan by the end of the year and told reporters on Tuesday that the deal with Foxconn was one step in that process. In recent weeks, he has also said he would give his top executives a 10-year timeline to prove each of the company’s 14 brands are worth keeping and that he has been working on a new approach to China, where both Fiat Chrysler and PSA struggled in recent years.

As tech companies become a key part of the auto industry, cars are looking more like giant computers on wheels. To understand why a tech giant like Apple might want to make a car, we built one out of iPhone parts. Photo illustration: Alex Kuzoian/WSJ

Write to Nick Kostov at Nick.Kostov@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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