‘Apple Freak’ Fiat Chrysler CEO: Apple ‘ill’ if they try making a car on their own

“Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne, who describes himself as an ‘Apple freak,’ is keen to partner with the technology giant on building a car,” Tommaso Ebhardt reports for Bloomberg.

“Given the complexity of auto manufacturing, Apple Inc. would be better served working with an established manufacturer than trying to build a car on its own, and the Italian-American company would be well-suited, according to Marchionne, who says he owns every kind of product Apple makes,” Ebhardt reports. “Apple has been exploring the development of a car and pushing a team to begin production of an electric vehicle as early as 2020, people familiar with the effort have said. Marchionne says he understands Apple’s ‘syntax’ and is ready work on their terms, putting Fiat Chrysler in better position than rivals.”

Apple has a language, and you have to be able to speak that language. Usually the industry comes into that dialogue with a high degree of arrogance as we know how to make cars. That’s not very helpful as their syntax is worth more than our ability to build cars. — Fiat Chrysler CEO Sergio Marchionne

Read more in the full article here.

“Marchionne said there was sufficient capacity available among car makers to deal with Apple’s requirements and it would make more sense for them to partner with a car manufacturer rather than become an actor itself in such a ‘complex busines,'” Agnieszka Flak reports for Reuters. “‘If they have any urges to make a car, I’d advise them to lie down and wait until the feeling passes,’ Marchionne told journalists. ‘Illnesses like this come and go, you will recover from them, they’re not lethal.'”

Read more in the full article here.

MacDailyNews Take: Smart car companies want to partner with Apple lest they get run over.

SEE ALSO:
Tim Cook: Vehicles could be assembled like iPhones and Macs – February 22, 2016
Bill Ford: carmakers must collaborate with tech companies like Apple – November 3, 2015
Fiat Chrysler CEO wants to partner on possible Apple Car – April 29, 2015
Germany’s Continental AG wants to partner on possible Apple Car – March 5, 2015
Many auto execs see Apple Car as serious competitor – March 3, 2015
Nissan CEO on Apple Car possibility: ‘It’s obviously good news’ – March 2, 2015
Apple legal filing adds ‘Vehicles’ to its list of company activities – March 2, 2015
Do not underestimate the Apple Car’s Potential – February 23, 2015
Apple’s ‘Project Titan’ could reshape the auto world – February 22, 2015
Apple Car: Forget ‘electric,’ think hydrogen fuel cells – February 20, 2015
Apple hiring auto engineers and designers – February 13, 2015

54 Comments

    1. Considering Apple outsources all manufacturing and car factories don’t tend to build ‘non-brand’ vehicles like chip foundries manufacture by contract, Apple will IMO more likely than not partner with an auto manufacturer.

      1. There are several contract automobile manufacturers around the world that do in fact build cars for other companies. Two of which are Magna Steyr and Karmann.

        However the process of building an electric vehicle could be so different that it would cost just as much to retool a plant as it would to build one from the ground up.

        1. Michael, you are right about contract car builders. I think some people would be VERY surprised to discover, for example, that Magna-Steyr builds a large number of BMWs and Mini Coopers.

          That said, I don’t think an electric vehicle would be different to build is really the issue. Rather, would an _Apple_ vehicle be different to build?

          I also think it is possible that Apple will look at building the car in China, now the world’s largest vehicle market.

            1. Hopefully, you have looked at the crappy, cheaply built all-electrics that Red China already sells in the USSA.

              Junkmobiles. Compare those to Teslas.

            2. As I recall, there was a small island country near China that started out building cars for export to the US and the world and that country did very well. Remind me again, wasn’t that country called Nippon or something?

            3. Almost all of the Japanese cars sold in the US are manufactured in the US. Japan figured out long ago that tying up inventory in the hold of a freighter for weeks to months wasn’t the most cost effective way to get the product to market. If Apple goes into production of a car being sold world wide to a mass market, it will likely be manufactured in several locations near the intended customers.

            4. Ah, then you also remember that the initial few years’ quality of those vehicles were pretty bad in comparison to what the U.S. had at the time.. Japan succeeded over years building their infrastructure and refining their processes. Will Apple be just as committed to the long game in autos? Not saying Apple won’t get there. Hopefully Apple won’t become what it was before Steve Jobs had to come in and reduce the number of different products to help the company focus.

          1. Haven’t checked of late but don’t they predominantly take responsibility for the high value specials and in particular the 4 wheel drive versions that is their heritage? They are not a’ value’ producer thats for sure, so not sure with the sort of profit margins Apple would seek if the product would be remotely affordable. But interesting prospect, a company like that would certainly remove some of the pain from moving to the production phase as a newbie.

        1. I see.. Were they manufactured in the US or elsewhere because Kia had factories in the countries Ford and GM didn’t allowing them to take advantage of import/export laws?

          1. I see… So, you’re saying it was bad deal making on a country, that needs to be made great again, that allowed import/export laws which prevented Ford and GM from manufacturing?

            1. I was just asking if the vehicles Kia made for Ford and GM were manufactured in the US (supplementary production for US sale) or produced in other countries where Ford and GM do not have factories but Kia does (production local to where those vehicles would be sold) which allows certain tax benefits for Ford and GM. since no import/export would occur. As far as I can tell no major US auto manufacturer has non-owned factories producing cars for them for sale in the US.

      2. Apple will surely contract-manufacture. But this does not necessarily mean they will reach out to already established automobile manufacturers. Apple may be better off “growing their own” supply channels. Especially if cars of the future will be more modular in nature.

    2. Aegis owns a lot more Apple products than the entire Apple HQ campus owns from Fiat Chrysler. It isn’t as if Fiat Chrysler has a sterling reputation for producing high quality, reliable products. If apple decides to partner with a car company to produce its alleged car, then it can find a far better partner than Fiat Chrysler..

    3. To be fair to him he does say “Apple has a language, and you have to be able to speak that language. Usually the industry comes into that dialogue with a high degree of arrogance as we know how to make cars. That’s not very helpful as their syntax is worth more than our ability to build cars.” So he’s acknowledging that Apple has come in and disrupted industries before, but at the same time they made a phone into a computer which they already knew how to make. No matter how much you computerise it, a car still has moving parts, still has a whole load of legislation it needs to meet, stuff that is wildly different to what Apple currently does. You would think there is some sense in utilising existing expertise be it by partnering or just buying someone. Admittedly they could be doing that by way of hiring talent. I suppose as much as anything it depends on what scale they want to do it. People won’t en masse be able to justify buying some $100,000 car in the same way they could maybe do with buying a more expensive phone.

  1. NO NO NO, NOT CHRYSLER!!
    Chrysler makes the less reliables car in the world, remember the Daimler -Chrysler partnership to have Chrysler to build Mercedes Benz cars in US? It took Donw mercedes’ reputation so low that it took years to gain it back. Rebember that’s jeep and Cherokee was the best all well drive out there? And how Chrysler convert them into a death sentence to people who dare to drive those in the desert?
    Please Apple, pick another American company (or Japanese) but not Chrysler.

      1. The list of best cars came out recently. Lexus was #1, Ford dropped 4 places toward the bottom of the list due to technical problems with the “infotainment” system. When will Ford learn; never is my thought.

        1. What list of best cars are you referring to? Consumer Reports?

          Lexus. Pfft. From a design standpoint the Lexus reminds me of putrid melted cheese. It has no architectural sense about its lines. It’s absolutely tasteless. But of course under the hood it’s well engineered for reliability so it’s been given a reputation, largely undeserved, of being a great looking car. But it’s SHIT. Sorry but it is.

          I’ll tell you what drew me to Steve Jobs decades ago. As an industrial design student I paid close attention to the auto industry – such potential to do really cool designs. As an American I was always hoping that one of the US auto manufacturers would finally put out something that was world beating. I waited a very long time. I remember going home during school breaks and I would talk with family and friends about industrial design and how cool it was and how so many common item we take for granted could be designed so much better from a functional, ergonomic and aesthetic standpoint. I was so enthusiastic but no one got it. No one. F-ing troglodytes. Then I saw this Steve Jobs guy – a computer guy and he was talking about good design. And I was like HOLY SHIT this guy gets it. And he’s a leader of an industry that was growing explosively.

          1. “From a design standpoint the Lexus reminds me of putrid melted cheese.”

            Not much different than Mercedes-Benz; bland and same old stuff, but without the reliability.

    1. I don’t think Marcchione was saying that. All he is doing is trying discretely to discourage Apple from going into his business; car manufacturing is complicated, don’t bother, just look to partner with an established car maker (hint, hint) and work with them.

      It is clear that he is in no way implying that Apple has no clue what they’re getting into; he just wants them not to do it, but to partner with him instead.

  2. Sounds familiar. Like when Apple made the iPod. Then again with the iTunes Store. Then again when they made the iPhone. Then again when they made the iPad. Then again with the Apple Watch. The pattern is the same. The competition says Apple can’t, yet Apple does and kicks all the competitors asses.

  3. Apple can’t make a computer on their own – IBM
    Apple will fail in the music business – Sony
    Apple is surely not able to enter the phone market – Nokia
    Apple “ill” if they try making a car on there own – Fiat

    Having owned a Fiat, if Apple decides it needs help in making a car I sure as hell know they won’t be calling Fiat for advice.

    1. Many years (1970) ago I had a 1969 Fiat 124 Sport Coupe. Pretty car that ran pretty good until the alternator went out. A new alternator in 1970 for that thing cost $124 when you could buy a alternator for you Ford or Chevy for $18. That car wasn’t long for my ownership.

  4. Many here appear to be misreading what Marchionne was saying. Having worked in Milan as an industrial designer I can tell you that Italy has design built into its culture like few other nations. Fiat may be an automaker with many flaws but I truly believe that they get Apple and have enormous respect for Apple’s maniacal focus on design. They know Apple will change the auto industry. (In fact, it already has by virtue of mere rumor that it may enter the auto industry.)

    Marchionne believes that Fiat can substantively contribute to Apple’s effort from its experience in heavy industry and the automotive supply chain. And he’s signaling that Fiat may be willing to go the extra mile that Apple usually commands to get the design just right because they understand the value of design and what good design is in a way that probably most other automakers don’t. The American and Japanese automakers certainly don’t. Saying that you understand Apple is very important because Apple is not going to want to have anything to do with anyone in the auto industry who think they know it all. Granted, that doesn’t mean that Apple will have any interest in working with Fiat.

    When Marchionne refers to an illness about entering the auto industry he’s not trying to dissuade Apple from entering the market. He knows full well that once Apple sets its eye on doing something they’re going to do it. What he was saying is that those who want to build cars need to be in it for the passion, because from an ROI standpoint, the auto industry has not been a very good investment opportunity for a long time. But if anyone can change the ROI equation, Apple can. Marchionne probably senses that.

    1. Agree. I love Italian design. I can see Pinanfarina helping Apple. Or Ferrari. Or Maserati. Or maybe even Alfa Romeo. Fiat? I don’t think so…

      Drove a “cinque cento” last year. For such a cute looking vehicle, it drove really rough. Geez, Louise…

    2. I think that the flaw in your reasoning is to assume that Apple would need a company like Fiat to help with things like the heavy engineering.

      If you know for certain that an Apple car will be fabricated from bent metal, then existing car manufacturers might be able to make a useful contribution, but I believe that an Apple car will be made of entirely different materials and therefore a conventional car factory wouldn’t have much to offer Apple. It would be better off by starting afresh and creating a brand new facility.

      Fiat certainly have a good design team, but design expertise is not an area where Apple are lacking. Fiat might have good supply chain management, but it’s useful to remember what Tim’s primary responsibility was before rising to become CEO of Apple.

      It’s hard to see exactly what Fiat can bring to the Apple car party and there aren’t many other car manufacturers that look like particularly useful partners for Apple either. I don’t think that Apple are being awkward. It’s simply that they already have some world leading in-house capabilities and when they need to add expertise in other areas, they tend to recruit a world-leading individual or buy out a small but highly innovative company.

      The ROI angle is an interesting one. We all know that the car industry only generates modest returns on immense investments. Apple has never operated with such small profit margins as those found in the car industry, so my guess is that Apple are developing a way to be much more profitable – maybe a business model based on recurring income than on a new multi thousand dollar sale every few years? Again, it’s likely to be so different to what is already happening elsewhere that Apple wouldn’t get any benefit from partnering with existing car manufacturers.

      1. “If you know for certain that an Apple car will be fabricated from bent metal, then existing car manufacturers might be able to make a useful contribution, …”

        That’s a fair enough point, but ‘metal’ is used as the means to an end – it isn’t the primary objective. As such, what Apple would really be gaining from working with the legacy automakers would be the insight as to where all of the regulations are which constrain the design of an automotive product, as well as the historical perspective of what things to do (and to not do) for longevity, servicability, etc.

        In the early days of some of the Korean brands, they were good cars for how cheap they were – – and then you had a simple headlight bulb burn out, whereupon you discovered that the headlight assembly wasn’t designed to ever allow for an easy replacement of a simple lightbulb.

        Given how Apple’s designs have moved away from the old PC “tower” style boxes and into designs which are glued together instead of screwed, one of the big questions for any “pure Apple” car design is how much attention-to-detail is going to be in the design for NOT building a disposable car?

        “Oh, you have a 2019 Apple Car? Sorry, but it is now 2025 and that model became designated last year as ‘Vintage’, with limited factory support. No, it doesn’t matter that it was only driven by your mother and has only 18,000 miles on it … “.

Add Your Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.