Hyundai bosses 'agonizing' over whether to build 'Apple Car'
Executives at Hyundai say they are still unsure whether collaborating with Apple on the "Apple Car" is a good move.
Hyundai is believed to be considering using its Kia subsidiary to build the "Apple Car."
Although Apple has yet to comment in any way, it has recently and repeatedly been reported that Hyundai -- or its subsidiary Kia -- will make the forthcoming "Apple Car." Now executives at Hyundai say that the company is split over both how to do it, and whether they should.
According to Reuters, an unnamed Hyundai executive has said that the company has been in talks with Apple. He or she would not confirm, however, the status of the talks, or whether they were still continuing.
"We are agonizing over how to do it, whether it is good to do it or not," said the executive. "We are not a company that manufactures cars for others."
"It is not like working with Apple would always produce great results," he or she added. "Apple is the boss. They do their marketing, they do their products, they do their brand. Hyundai is also the boss. That does not really work."
A separate executive at the firm expressed the same concerns to Reuters. "Tech firms like Google and Apple want us to be like Foxconn," he or she said.
"A cooperation may initially help raise the brand image of Hyundai or Kia," this executive continued," but in the mid- or longer term, we will just provide shells for the cars, and Apple would do the brains."
A third insider said that Apple would be looking to source components from many suppliers, and use Hyundai to assemble the final vehicle.
"The [Hyundai Motor] Group is concerned that the Hyundai brand would become just Apple's contract manufacture," said this insider, "which would not help Hyundai in its effort to build a more premium image with its Genesis brand."
Despite the expectation that Apple will partner with a firm such as Hyundai to make the "Apple Car," JP Morgan analyst Samik Chatterjee believes it will manufacturer the vehicle itself. Chatterjee predicts that Apple will "go big or go home," over its "Apple Car" plans.
Hyundai is believed to be considering using its Kia subsidiary to build the "Apple Car."
Although Apple has yet to comment in any way, it has recently and repeatedly been reported that Hyundai -- or its subsidiary Kia -- will make the forthcoming "Apple Car." Now executives at Hyundai say that the company is split over both how to do it, and whether they should.
According to Reuters, an unnamed Hyundai executive has said that the company has been in talks with Apple. He or she would not confirm, however, the status of the talks, or whether they were still continuing.
"We are agonizing over how to do it, whether it is good to do it or not," said the executive. "We are not a company that manufactures cars for others."
"It is not like working with Apple would always produce great results," he or she added. "Apple is the boss. They do their marketing, they do their products, they do their brand. Hyundai is also the boss. That does not really work."
A separate executive at the firm expressed the same concerns to Reuters. "Tech firms like Google and Apple want us to be like Foxconn," he or she said.
"A cooperation may initially help raise the brand image of Hyundai or Kia," this executive continued," but in the mid- or longer term, we will just provide shells for the cars, and Apple would do the brains."
A third insider said that Apple would be looking to source components from many suppliers, and use Hyundai to assemble the final vehicle.
"The [Hyundai Motor] Group is concerned that the Hyundai brand would become just Apple's contract manufacture," said this insider, "which would not help Hyundai in its effort to build a more premium image with its Genesis brand."
Despite the expectation that Apple will partner with a firm such as Hyundai to make the "Apple Car," JP Morgan analyst Samik Chatterjee believes it will manufacturer the vehicle itself. Chatterjee predicts that Apple will "go big or go home," over its "Apple Car" plans.
Comments
they should leave the brand out of it.
that makes it cloudy
It’s not just about revenue or profits.
I don't believe, that after so many years of investments and developing, Apple will stop with Apple Car project, somewhere in the middle of the road,
1. Location - I really think Apple desires a US assembly location. The infrastructure for manufacturing and assembling their general tech (phones, computers, tablets, etc) is concentrated in Asia. That's not the case for cars, and assembly in the US could even be cheaper. Magna has no N. American plants. It's rumored (again) they're looking to open a N. American plant, but that rumor has surfaced many times over the past couple of decades.
2. Capacity - I've no doubt Magna could handle Apple's initial assembly and volume. Apple's thinking long term. Scale and capacity would be Magna's issue. Magna doesn't have an advantage in ether of those factors that could compete with Hyundai's capacity. Hyundai/Kia has the ability scale their production to meet any capacity Apple may need. Magna doesn't have that ability. They already contract manufacture Jaguar's I-Pace and E-Pace, Toyota's Supra, BMW's 5-Series and Z4, and MB's G-Class.
When this story initially broke, I said Apple was looking for an OEM/contract manufacturer, not a brand partner. Some people are still incorrectly looking at this from a brand partner perspective. Not really sure why. Questions like, "why Hyundai and not BMW, MB, Porsche, or [insert luxury brand here]" still abound. None of those brands would ever consider being an OEM manufacturer. They would have the same concerns that Hyundai is expressing about brand erosion, 'cept their concerns would be magnified because their brands are waaaaaaay more valuable and influential than Hyundai's. That's not a knock on Hyundai. That's just reality.
Though Apple might indirectly partner with Magna in a way they did with Sharp for manufacturing LCD displays. They can pump in half of the money (or more) in Magna required to make a N. American plant. A financial push from Apple, combined with the long term benefits might be enough for Magna to start building a plant in N. America.
Not enough production capacity or efficiency from the likes of Lotus.
Also interesting is that GM has announced they will be all electric by 2035.