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FCA CEO Sergio Marchionne Urges Apple Not To Build Car By Itself, Confirms FCA Is Not In Merger Talks

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On: Mon, Mar 7, 2016 at 2:49PM | By: Carl Malek

FCA CEO Sergio Marchionne Urges Apple Not To Build Car By Itself, Confirms FCA Is Not In Merger Talks

FCA CEO Sergio Marchionne recently shared his thoughts on Apple's plans for a possible autonomous car urging the California based tech company to not go on its own with the project while also shooting down new rumors of the company engaging in merger talks.

Marchionne, who described himself as an "Apple Freak", urges Apple to partner with an established automaker to build the car. The outspoken CEO has always been very keen on a partnership with Apple; he even offered an open invitation for Apple to join forces with FCA on the project.

When one considers how complex and intricate the process of vehicle manufacturing can be, it would seem that Apple would be better off partnering with an existing automaker versus going off on its own. The company would not have to invest money into building new plants, and they would be able to work much closer together with established engineers and designers in creating a car that can look good and run well. According to Marchionne, FCA's resources would make the two companies a good fit. He added that he owns every kind of product that Apple makes. "I would assume that we have the credibility to be one of the players that they have looked at... There are parts of us that would be interesting to them."His comments came during his Geneva Motor Showpress conference.

Marchionne feels that Apple shouldn't undertake the process of building a car on a spur of the moment decision. "If they have any urges to make a car, I'd advise them to lie down and wait until the feeling passes. Illnesses like this come and go; you will recover from them, they are not lethal."

While helping a possible competitor get its program off the ground may seem like an unusual move for a company like FCA, it does reflect Marchionne's belief that the automotive industry wastes capital and needs to change. An example of this change is his strong desire to merge FCA with another automaker to improve FCA's long term future. So far his offers of consolidation have been rejected by counterparts, including GM and its CEO, Mary Barra. Marchionne's current plan is to eliminate the massive debt Fiat has acquired over the past few years, and a tentative partnership with Apple or Google on an autonomous vehicle could serve as a tentative first step.

In other news, Marchionne passionately shot down rumors that the company was in active merger talks with anyone, including French car giant PSA/Peugeot-Citroen. He elaborated further, saying that a potential partner must have the same multi-brand strategy as FCA. This was a response to speculation that started a few weeks ago when PSA revealed that it was open to strategic opportunities in the automotive sector; this sparked rumors of a pending merger.

It will be interesting to see whether Sergio Marchionne can ultimately succeed in his plans to spark change in the automotive industry. However, he will have to clean house internally at FCA to make the idea viable, and will have to reduce Fiat's debt as well. He also needs to either stablize or jettison the precarious and repeatedly delayed launch of the upcoming Giulia sedan.


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