SEOUL/SAN FRANCISCO — Executives at Hyundai Motor Group are divided over a possible tie-up with Apple, with some elevating issues about changing into a contract producer for the U.S. tech big, dimming the outlook for a deal.
Hyundai mentioned earlier this month it was in preliminary talks with Apple however gave no particulars. Native media mentioned the companies were discussing an electric car and battery tie-up.
Hyundai and Apple each declined to remark for this story.
Apple has by no means acknowledged talks with the automaker about constructing automobiles, and it was unclear whether or not any such talks are nonetheless lively. The iPhone maker usually insists on strict secrecy from its potential companions and suppliers about future plans or unreleased merchandise.
In an earnings name on Tuesday wherein it reported its best quarterly profit in over three years, Hyundai didn’t give any updates on talks with Apple or point out whether or not they stay lively.
“We’re agonizing over the best way to do it, whether or not it’s good to do it or not,” mentioned a Hyundai govt conscious of the interior discussions on the tie-up with Apple. “We aren’t an organization which manufactures automobiles for others. It isn’t like working with Apple would at all times produce nice outcomes.”
Few particulars are identified in regards to the talks between the 2 firms. However folks near the discussions say the choices thought-about included Hyundai or Kia performing as a producer for automobiles designed by Apple and bought below its highly effective, ubiquitous model.
Hyundai is historically identified for its reluctance to work with outsiders, making engines, transmissions and even its personal metal in-house below its vertically built-in provide chain as South Korea’s second-largest conglomerate.
Though shares in Kia and Hyundai have surged due to the talks, there may be appreciable opposition to changing into an Apple contract producer, which might maintain up any cope with the American big, these folks mentioned.
Apple and Hyundai first began talks over a automotive partnership in 2018, when Apple’s effort, generally known as “Undertaking Titan,” was headed by Alexander Hitzinger, who’s now a Volkswagen govt, mentioned an individual acquainted with the matter.
However progress was hampered by the South Korean automaker’s reluctance to work with outsiders, the particular person mentioned.
These talks haven’t been beforehand reported.
“It’s actually tough (for Hyundai) to open up,” this particular person mentioned, including that the South Korean firm would prone to have to interchange some executives to keep away from a tradition conflict below any partnership with Apple.
“Apple is the boss. They do their advertising, they do their merchandise, they do their model. Hyundai can be the boss. That doesn’t actually work,” the particular person mentioned.
The automaker, nevertheless, has extra capability. Contract manufacturing would assist it safe manufacturing quantity.