London (CNN Business)The list of carmakers that might partner with Apple is shrinking.
Hyundai and Kia killed off talk of a potential iCar deal on Monday, saying they were “not having talks” with the tech giant about developing autonomous electric vehicles.Apple declined to comment. It’s not clear how far along the company is in developing plans for any potential car, but it has been granted patents for a range of vehicle inventions. “Project Titan,” its reportedly secretive effort to break into the auto business, has been a frequent source of rumors over the years.
The denial from Hyundai and Kia followed media reports suggesting the South Korean group was close to signing a deal to manufacture electric cars for Apple (AAPL), potentially in the US state of Georgia. Shares in Hyundai and Kia dropped by 6% and 15%, respectively, giving up some recent gains sparked by the speculation of a tie-up with the $2.3 trillion tech company. Investors may be overreacting. 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.Read More
Hyundai and Kia say they are not talking to Apple about self-driving cars”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.”Automotive experts generally agree that if Apple wants to get into cars, it needs a partner who already makes them. The investment, expertise and workforce costs needed to manufacture millions of cars a year make it difficult for any company — even one with as much cash as Apple — to jump into the industry. With speculation mounting recently, Ford (F), General Motors (GM), Tesla (TSLA), Honda (HMC), Nissan (NSANF) and Stellantis, the new autos group formed from the merger of Fiat Chrysler (FCAU)and PSA (PUGOY), have all been floated by analysts as potential Apple partners. Yet there are good reasons why none of them may join forces with the tech company. The central question is whether Apple is willing to share its tech expertise with a carmaker, which would give them a big advantage in the race to produce electric and autonomous vehicles that integrate seamlessly with technologies such as 5G networks and cloud computing. But sharing might not be what Apple has in mind.”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.”
Ford closes German plant for 1 month as global chip crisis worsensA deal that does not include the sharing of technology, and close collaboration on future products, would leave the carmaker in a situation akin to that of Pegatron and Foxconn, which assemble iPhones for Apple but do not reap the huge financial rewards. Replicating that business model is something that the major carmakers appear to want to avoid. “Volkswagen wants to develop their own autonomous driving software, they want to create their own operating system. They want control over their own data. They want to compete with the tech guys, the Teslas of this world and anybody else who comes along,” said Flowers. “Then you ask them, ‘Will you, Volkswagen, be the contract manufacturer to a tech guy?’ I just don’t think they’re going to agree,” he added.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,” he said.
Millions of Ford vehicles will run Google's Android operating system starting in 2023Smaller automakers that aren’t able to invest as heavily in electric and autonomous technology may be more open to a partnership with Apple. Hyundai was one company that fit the bill, according to analysts. Honda, Nissan, Stellantis and BMW (BMWYY) are four more. “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. Magna has even developed its own electric vehicle engineering architecture.
If Apple does find a partner among the major consumer brands, the pace of change in the industry will only accelerate.”We look forward to new competitors who will certainly further accelerate the change in our industry,” Volkswagen CEO Herbert Diess said recently on LinkedIn. “I have said it before: A mobility company will again be the most valuable company in the world — be it Tesla, Apple or Volkswagen AG.”
Source: edition.cnn.com