Hyundai execs reportedly worry that Apple Car partnership could damage automaker’s brand

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The idea of working with Apple to build a car reportedly makes some Hyundai execs nervous.
The idea of working with Apple to build a car reportedly makes some Hyundai execs nervous.
Photo: Mpho Mojapelo/Unsplash CC

Hyundai executives are reportedly split on whether the South Korean automaker should partner with Apple to build an electric car. Their concerns, which are supposedly “dimming the outlook” for a deal, apparently center on fears that Hyundai could become simply a contract manufacturer for Cupertino.

“We are agonizing over how to do it, whether it is good to do it or not,” said a Hyundai executive in a Friday report from Reuters. “We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results.”

Hyundai earlier this month said it engaged in conversations with Apple. The reports sent Hyundai shares skyrocketing by almost 20%. But Hyundai later removed the references to Apple from its comments, possibly so as to not upset its potential partner.

A later report suggested the two companies could build the first beta Apple Car next year, before main production begins in 2024. Another report suggested Hyundai might pass the manufacturing job to Kia, one of its subsidiary automakers. At the time, reports noted that Hyundai remained “still cautious” about the deal with Apple.

We’re not so different, you and I

Ironically, today’s Reuters report suggests that the roadblock could be not how different Apple and Hyundai are in their approaches to manufacturing, but how similar:

“Hyundai is traditionally known for its reluctance to work with outsiders, making engines, transmissions and even its own steel in-house under its vertically integrated supply chain as South Korea’s second-largest conglomerate.”

That doesn’t sound a world away from Apple’s own vertically integrated approach to, well, virtually everything it does.

Hyundai is reportedly worried that it could wind up just becoming a manufacturer like Foxconn, the Chinese company that cranks out iPhones. (Foxconn, incidentally, is seemingly keen on getting a piece of the Apple Car business.)

“The Group is concerned that the Hyundai brand would become just Apple’s contract manufacturer, which would not help Hyundai in its effort to build a more premium image with its Genesis brand,” a source told Reuters.

Another source said a deal with Apple might pay dividends at first, but damage Hyundai over the long haul.

“A cooperation may initially help raise the brand image of Hyundai or Kia,” the source said. “But in the mid- or longer-term, we will just provide shells for the cars, and Apple would do the brains.”

What are your predictions for the future of the Apple Car project? Let us know your thoughts in the comments below.

Source: Reuters

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