Hyundai and subsidiary Kia killed off talk of a potential “Apple Car” deal on Monday, stating flatly that they were “not having talks” with Apple about autonomous electric vehicle assembly. Now, analyst thinks BMW, Stellantis, Magna, and others remain among candidates to assemble the “Apple Car.”
Charles Riley for CNN Business:
Hyundai and Kia would have burnished their reputations by partnering with Apple, and their factories would have churned out more cars. But it’s not clear that partnering with Apple would have helped vault the companies to the top of global carmaking.
“If you’re Apple, you clearly want control over everything to do with your product,” said Demian Flowers, an automotive analyst at Commerzbank. “You want a contract manufacturer, not really a partner.”
With speculation mounting recently, Ford, General Motors, Tesla, Honda, Nissan and Stellantis, the new autos group formed from the merger of Fiat Chrysler and PSA, have all been floated by analysts as potential Apple partners… “Apple will not help the company that ends up doing this,” said Flowers. “Apple will not share anything. The only benefit you’ll get from Apple is the volumes.”
Jürgen Pieper, an analyst at the German bank Metzler, agrees that big carmakers have the most to lose. “They don’t want to open the door to Apple… Maybe BMW sees it a bit differently, saying, ‘OK, at some point we have to accept that Apple is entering the auto business, and if that is happening, we want to be the partner instead of anybody else,'” said Pieper. Apple may seek to avoid battles over branding and creative control by hiring a contract producer such as Magna, which already builds cars for automakers including Mercedes-Benz, Toyota, BMW and Jaguar.
MacDailyNews Take: BMW certainly offers more cachet than Hyundai/Kia. It’s “German engineering,” after all, with which Steve Jobs was long fascinated.
Magna has the expertise to assemble high end vehicles plus offers the benefit of having no real consumer-facing branding to get dilute the Apple brand. In fact, way back in September 2016, Bloomberg News reported that about a dozen Magna engineers have been working with Apple’s Project Titan team in Sunnyvale, California to develop a vehicle, citing “a person familiar with the arrangement.”
I’ve long felt that Apple should have, at least, taken out a big stake in Magna. This is a relatively small company. But it has very high end technology. Apple would start out small in its manufacturing needs, but that would go up.
But Apple doesn’t want to get directly involved in manufacturing. With cars, I think that’s a mistake. Magna is also an American company, which is good for marketing. I see no downside to this.
Isn’t Magna a Canadian company?
A North American company.
I’m not familiar with Magna. Seems to be a fine manufacturing company. But doesn’t Apple need to partner with a company that has dealerships, showrooms, and most importantly, service centers scattered around the globe, to take care of the very unique things about the Apple Car, both for regular maintenance and when something goes wrong?
It depends how they want to sell it. I have a feeling they’ll be closer to Tesla’s sales model, rather than traditional car makers’ model.
BMW? No way. It would go as well as the band; The Cream.
Superstars that could, maybe, make a few stellar products before hell would break loose.
Following isn’t in either’s DNA.
I suspect that none of these will come to fruition, and after that, not sure whose left. Apple Car for all the digital ink splayed on it, will probably never happen. the most you’ll ever see is perhaps some systems in existing lines of cars using Apple tech to augment the driver experience..
One billion people have an iPhone in their pocket. It has their physical location and their credit card. If one day an icon appeared on the home screen that allowed the user to summon an autonomous vehicle and take them anywhere, it would be the ultimate “service”.
Why shouldn’t it be Apple that seizes this once-in-a-century opportunity?
That’s a picture of great simplicity and market wisdom. It’s also maybe a trillion dollar question.
I started with Magna Steyr as making the perfect fit, but needing a lot of investment for Apple’s volumes…
When Hyundai-KIA came into focus and Apple putting north of $3b into GA facility expansion, that really made a great fit for Apple. Those that follow the industry know that KIA is producing some of the highest quality vehicles in the world. Winning JD Power & Assoc. Initial Quality award, six-years-in-a-row. That’s just the tip of the iceburg as their fit and finish is amazing in today’s world, and their first-ever 3-row SUV, the Telluride, is rated #1 in the business over and over again, and KIA can’t produce them fast enough to keep on dealer lots, with the entire west coast selling them $2k – $8k over sticker and having no issues doing so.
But Veeps at Hyundai are unscrupulous people. That’s the culture, and if they could leak talks their stock would skyrocket, and they could pocket millions. And in South Korea, if you know anything about that government and big business, there will be NO investigations or investigations on this more than obvious play by individuals.
Thus, some screwed and unethical folks at Hyundai just blew up the deal of the decade or longer for them. Oh well. Their loss.
Apple is now back to hunting, and I can only think the best play is Magna Steyr. Yes, a few billion in investment will be required with them also, but it’ll pay off in spades. Magna isn’t going to demand much from Apple is “use this platform of ours” or “help brand us” or or or… Nope, they are more or less a pure car CM and that is what Apple will really love to work with.
The volumes may not be as large as we at first think. Depends on Apple’s go-to-market strategy.
Most of the value of a car is wasted. They sit around doing nothing all day.
If you’re charging by the mile, for an autonomous mobility service, you could have a real business with only hundreds of thousands of vehicles across major cities. How many do you need to build a global business addressing most urban areas? A lot less than you have to build if you’re selling them to individual owners.