Does Apple Need FCA to Take Over the Auto Industry?
For most of 2015, Fiat Chrysler Automobiles chief Sergio Marchionne was engaged in a quixotic campaign to merge his company with another automaker, even going so far as to suggest launching a hostile takeover of General Motors. He quietly dropped the idea late last year, telling reporters in Amsterdam, “This is not an indiscriminate dating game. I’m not willing to go with anybody to get it done,” closing the book on merger talk for the time being.
While that may have been the end of the FCA-GM saga, it wasn’t the end of Marchionne’s quest for a big-ticket partnership. Now, he’s beginning to think outside the automotive world, and it seems like he’s setting his sights on Apple. But while he came on a bit strong with GM, he’s trying to grease the wheels with the tech powerhouse. At the Geneva Motor Show, Marchionne let slip to reporters that he’s an “Apple freak” who owns every kind of product the company makes. He also reminded them that instead of designing a car from the ground-up, it would benefit Apple to partner with a proven automaker who already knows the ins-and-outs of the industry. “I would assume that we have the credibility to be one of the players they have looked at,” Marchionne said, adding, “There are parts of us that would be interesting for them.”
Of course Apple – the world’s largest technology company – would be a dream partner for any automaker. And with the Apple car seeming to become more of a reality with each passing day, it might be better to join them now rather than try to beat them. But out of all the automakers around the world, how attractive is FCA to Apple?
FCA is the smallest of Detroit’s Big Three, and the seventh largest automaker in the world, behind Ford (sixth largest), and GM (second largest). It has factories all over the world, and its Jeep brand is the fastest-growing American marque worldwide. Whats more, Marchionne is content with sitting back and letting Cupertino take the lead on product development, saying he understands the company’s “syntax” better than any other American automaker. “Apple has a language, and you have to be able to speak that language,” he told reporters. “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.”
But FCA’s ability to build cars might just be the reason why it wouldn’t be an ideal candidate. Other than the profitable Jeep brand, the companies other brands have been in upheaval as of late, with its plan for Alfa Romeo in a constant flux, and the Chrysler and Dodge lineups seeing big deviations from the company’s original “Five Year Plan.” And while Ford and GM (not to mention a number of Asian and European brands) have growing EV and hybrid lineups, FCA only has the low-production Fiat 500e and the upcoming Chrysler Pacifica hybrid, which hasn’t been put through its paces yet. With Apple committed to building an electric car, FCA’s engineering, design, and powertrain knowledge may come to naught for lack of EV powertrain knowledge.
Despite Marchionne’s public overture, an Apple partnership with any automaker beyond its CarPlay infotainment system is merely hypothetical at this point. As Daimler chief Dieter Zetsche said in January, Apple already “can do more and know more” with cars than previously thought, making Elon Musk’s claims that the company had 1,000 engineers on the project seem that much more realistic. If that’s the case, Apple might not need any help from the auto industry. It may already have all the information it needs to take it over.