Nissan signals interest in 'Apple Car' following Hyundai exit
Japanese automaker Nissan on Tuesday suggested it would be interested in partnering with Apple on the production of a so-called "Apple Car," citing the need to stay nimble as technology permeates the industry.
During a quarterly earnings conference call, Nissan CEO Makoto Uchida fielded a question regarding a potential collaboration with Apple now that Hyundai is no longer in talks to build the tech giant's car, reports The Wall Street Journal.
As technology remodels the car industry, "we need to take new initiatives" and "work with companies that are knowledgeable, with good experience, through partnership and collaboration," Uchida said. While not a confirmation that talks are underway, the response illustrates a willingness to cooperate on a project that has reportedly been declined by other major automakers.
Nissan currently fields one the world's most popular production electric vehicles in the Leaf and is primed to build on that lead with a crossover based on its IMx concept.
Uchida's comments come less than a week after reports indicated Apple is in discussions with multiple Japanese car companies over production and supply contracts. At least six firms are said to be in active negotiations.
Honda and Mazda said they could not comment on the matter, while Mitsubishi asserted claims that Apple is engaging with Japanese automotive companies were false. Nissan declined to comment.
According to equity analyst Mio Kato, Nissan is "the most likely candidate to be in serious discussions with Apple" thanks to spare production capacity in the U.S., the report says.
"Apple Car" rumors have accelerated over the past few weeks, with January reports in the U.S. and South Korea tipping advanced talks with Hyundai. The South Korean automaker initially confirmed it was in discussions to produce the vehicle before walking those statements back.
Hyundai's PR faux pas reportedly contributed to a breakdown in the dealmaking process. The company in a regulatory filing on Monday said it is "not having talks with Apple about developing self-driving cars," but noted high interest in its EV platform.
During a quarterly earnings conference call, Nissan CEO Makoto Uchida fielded a question regarding a potential collaboration with Apple now that Hyundai is no longer in talks to build the tech giant's car, reports The Wall Street Journal.
As technology remodels the car industry, "we need to take new initiatives" and "work with companies that are knowledgeable, with good experience, through partnership and collaboration," Uchida said. While not a confirmation that talks are underway, the response illustrates a willingness to cooperate on a project that has reportedly been declined by other major automakers.
Nissan currently fields one the world's most popular production electric vehicles in the Leaf and is primed to build on that lead with a crossover based on its IMx concept.
Uchida's comments come less than a week after reports indicated Apple is in discussions with multiple Japanese car companies over production and supply contracts. At least six firms are said to be in active negotiations.
Honda and Mazda said they could not comment on the matter, while Mitsubishi asserted claims that Apple is engaging with Japanese automotive companies were false. Nissan declined to comment.
According to equity analyst Mio Kato, Nissan is "the most likely candidate to be in serious discussions with Apple" thanks to spare production capacity in the U.S., the report says.
"Apple Car" rumors have accelerated over the past few weeks, with January reports in the U.S. and South Korea tipping advanced talks with Hyundai. The South Korean automaker initially confirmed it was in discussions to produce the vehicle before walking those statements back.
Hyundai's PR faux pas reportedly contributed to a breakdown in the dealmaking process. The company in a regulatory filing on Monday said it is "not having talks with Apple about developing self-driving cars," but noted high interest in its EV platform.
Comments
From Apple's perspective, it would gain a partner with a great reputation for chassis development. Mazdas are known for possessing solid chassic dynamics. Their powertrains are well done but the company is using aging technology largely because the resources to replace that technology as often as competitors just isn't there. For instance, Mazda currently uses a six-speed automatic that is far behind the units others are using with more gears, though it is a good unit, just the same.
Mazda is looking to move upmarket somewhat, in part by delivering products with interior fit and finish that is a cut above the mainstream, volume class.
Seems to me that potentially, a Mazda/Apple partnership could prove to be a win for both parties, though certainly Apple would have to be prepared to allow Mazda to use some of its tech in Mazda-branded models in exchange for Mazda producing for Apple a product that would be marketed primarily as an Apple product.
Certainly Honda and Mazda have the right idea in terms of not talking about any negotiations that could be happening with Apple. It's not an Apple trait to be comfortable with a potential partner talking to the press before a deal is consummated.
as for potential culture clashing ... see the movie Gung Ho, starring Michael Keaton
Maybe the first car could be called the "McLarentosh."
But Nissan has been making the Leaf in this country, and VW is preparing to build its ID.4 in the US as well. The VW base BEV chassis is widely regarded as one of the most advanced, to be used by both VW and Audi. I have no idea if the US plant for the ID.4 will have excess capacity, but Apple would be building on a great platform.
There is always the chance that Kia could circle back, since they likewise have a very promising BEV platform and can build in the US. Apple clearly has much to figure out in the months to come.
Where is McLaren's competency in mass producing vehicles on the scale Apple would want? They're a boutique shop who make <10k cars a year, a large part of it by hand, which is not even remotely close to what Apple needs.
Did you post this solely to make that rubbish name joke?
But if Apple has already fully (100%) developed car concept, then they are not going to cooperate with VW or Hyundai just because this companies have already very good chassis. Apple will cooperate with those companies only if they are willing to manufacture Apple’s already developed chassis. And to make it more complicated, here are coming the marketing considerations of every candidate partner.
That’s why, it is not surprisingly, that it takes so lot of time for negotiations and diplomacy before a definitely agreement with any of those car manufacturers
It's not as if anyone, with the possible exception of Tesla, can be said to have extensive experience with BEVs. Established automakers have been tinkering here and there - a Leaf from Nissan, some noise from Volkswagen Group, GM's Bolt etc. - and there are start-ups popping up all over the place. It could be argued that developing battery-powered devices is something Apple has more experience with than all of them combined. That an automaker has assembled a battery-powered vehicle in the US, is not really that big an advantage. That degree of experienmce with the process can easily be matched with a year or two of preparatory work.
Also, I'm not of the view that Apple is concerned all that much if the Apple product is made in the US. If the intent were to do so and your partner were let's say Mazda, building a plant from the ground up with that intent located in the US would be doable with Apple possessing the financial clout to make it happen. And if the Apple car was assembled outside of the US, really, consumers couldn't care less. Us North Americans are accustomed to buying products assembled elsewhere. Few of us would even ask.
Doing an electric vehicle is a relatively new process and it would make sense for a company with Apple's experience with battery-powered devices along with deep pockets combining with an automaker known for excellent chassis devlopment, not to mention accomplishing more with less. It certainly would be the case that Mazda has a great deal more to gain from forming a partnership on Apple's terms than any other potential partner with experience in the automotive space. Widespread electrification of the automotive industry is not a case of if but when. As such, Mazda clearly cannot avoid transitioning away from internal combustion engines, regardles of how much progress it makes in improving the efficiency of its ICEs. Doing it with Apple's assistance would certainly improve Mazda's chances. Apple, meanwhile, has a lot to gain in partnering with a company that has experience in automotive assembly and chassis development.
It's obviously just a hunch but I would not be surprised if in the end, an Apple/Mazda partnership is what we get.
1. Hyundai/Kia were initially thrilled to have the opportunity to work with Apple because it would be a shot in the arm to their current third rate reputation (not luxury like BMW/Mercedes/Lexus, not general like Ford/GM/Volkswagen/Toyota/Honda but a "budget" brand that only gained fraction outside their home market by offering significantly better warranty terms than everyone else in the industry) by getting to partner with a global premium brand.
2. That is ... until Hyundai/Kia saw that the actual terms of the deal would neither improve their reputation or even make them very much money. Instead - as in the case of Apple's other products - no one but industry insiders and enthusiasts would have any idea that these cars are actually manufactured by Hyundai/Kia because they would be forbidden from telling anyone this in their marketing campaigns. They would not be allowed to reuse anything that goes into the Apple Car to improve their own products to give them a leg up on Ford, Toyota etc. And they would be required to accept the same very low margins that Apple demands of all their partners and suppliers.
3. However, they couldn't "turn Apple down" because it looks very bad. How is a third rate car manufacturer going to turn down a golden ticket offered to them by Apple to ride the royal carriage to the big time? That the golden ticket is actually made of lead and the royal carriage is actually a pumpkin would have been entirely ignored by both the media and any Daniel Loeb-type activist investors - both infamous for their love of Apple - who would have demanded and gotten their CEO fired (as Loeb did Intel's).
4. So Hyundai/Kia "leak" the information, and in the process make it clear to Apple that they aren't interested. That allows Apple to terminate the deal, which is in the interests of both parties. Apple doesn't take the hit from being turned down by a budget car manufacturer, and the budget car manufacturer doesn't suffer blowback from all those enraged iPhone fans.
What does this mean going forward? Simple: while Nissan and the other Japanese manufacturers have interest in making an Apple Car now - just as Hyundai/Kia did - it is not certain that they will retain that interest once Apple offers them the same terms that Hyundai/Kia rejected. Also, whether Apple would be interested in all of these car manufacturers is debatable. Apple doesn't choose suppliers that they have to help build from the ground up. Apple chooses entities that have their own expertise to contribute to the product so that Apple doesn't have to put in the time/money/effort to do it all themselves. As I have mentioned before, Apple partners with Samsung and Qualcomm for iPhone and iPad components because they were already the best at making them before Apple hired them. Ditto Foxconn: they were the leading white box manufacturer even before Apple. So unless this Japanese manufacturer has at least something going on with electric or autonomous vehicles to give them a level of expertise that keeps Apple from having to design the whole thing from scratch - including the platforms and the manufacturing processes - Apple won't be interested.
So if Nissan doesn't have their own EV or AV division to partner with Apple, then that will pretty much eliminate any desire to do a deal on Apple's part. Similarly, once Nissan finds out that Apple is not going to license or share IP or know-how with Nissan to help Nissan build cars that will compete with the Apple Car - or as it were the same companies that Apple wants to steal market share from - they are quickly going to lose interest as well.
The auto industry is not the electronics industry. If Apple wants an established company to help them manufacture cars at the speed, quality and scale that they need, they are going to have to change their pitch. And when they do then the best partner for them will be their first choice to begin with: Kia. Hopefully they will realize that as quickly as possible. Otherwise, we may well see a Kia (or Hyundai) Samsung Car - or Google Car - make it to market before the Apple Car does.