Apple reportedly in talks with multiple Japanese automakers over 'Apple Car'

With "Apple Car" rumors heating up, a report on Thursday claims Apple is in discussions with at least six Japanese automakers over potential production and supply partnerships.

Citing an executive at an automotive parts supplier, Nikkei reports Apple is negotiating deals with a number of Japanese companies that could result in contributions to a much-rumored "Apple Car."

"At least six companies are in negotiations," the person said.

Apple is said to be pushing for contracts that would see Japanese auto firms join the effort under a horizontal division of labor model, a strategy Apple has used to great success in the production of iPhone, iPad and other consumer products. The tech giant plans to develop and design a so-called "Apple Car" and outsource production to third-party manufacturers, specifically automotive companies, according to the report.

The Japanese firms are not exactly jumping at the chance to work with Apple, the source said, noting automakers face a difficult decision in joining an "Apple Car" supply chain. Apple is notoriously demanding of its suppliers and while being part of the brand's supply chain typically drives profit, it also requires major changes that could include diverting important resources.

Japanese companies are also wary of being relegated to the role of subcontractor, a worry shared by another rumored "Apple Car" partner. A report last week claimed Hyundai executives are "agonizing" over a potential collaboration, saying that while a partnership might initially boost brand image, those benefits could quickly fade.

Today's report counters previous claims that Apple is on the verge of finalizing a deal with Hyundai to manufacture the vehicle at Kia's U.S. facilities. With negotiations ongoing on multiple fronts, Apple appears to be entertaining a variety of options as it works toward a contract.

"I don't know if it will be decided by the Korean manufacturer. We are in the process of negotiating where (Apple) will make it," one Japanese supply executive said.

The report claims Apple's research facility in Yokohama, which is said to focus on materials, vehicle and health segments, acts as a point of contact with domestic vehicle manufacturers and parts producers.

"Apple Car" rumors have accelerated over the past few weeks, with reports in the U.S. and South Korea suggesting Apple is closing in on a manufacturing deal with Hyundai and its Kia subsidiary. The South Korean automaker in January confirmed it was in talks to produce the vehicle before quickly walking those statements back.

On Wednesday, South Korean news outlet Dong-A said Apple plans to ink a 4 trillion won deal with Kia on Feb. 27 to secure access to the automaker's U.S. plant in Georgia. That report cited a 2024 start date and claimed initial capacity would be set at 100,000 cars per year with the potential to increase output to a maximum of 400,000 units a year.

Earlier in the week, analyst Ming-Chi Kuo predicted Apple to tap Hyundai's E-GMP electric vehicle platform, with Hyundai Mobis offering assistance with component design and production. Kuo also believes Apple will be in charge of self-driving hardware and software, semiconductors, battery technologies, form factor and user experience, with other — arguably a bulk — of duties handed off to Hyundai/Kia.

Most recently, CNBC sources confirmed that Apple is nearing a deal with Hyundai to produce a fully autonomous vehicle designed to be operated without a driver. That report suggests "Apple Car" might be marketed as an enterprise mobility vehicle before being sold to consumers.

49 Comments

M68000 887 comments · 7 Years

About 3 years ago

Imagine trying to build a car but have to rely on somebody else to do it. The challenges with knowing what is going on and controlling things. All the levels of managers and their own ideas of what should be done. There was a recent article, I think about Hyundai, that said their execs are not sure about such a thing. After all, who could blame them, they have their own company with their own plans. Would it just be easier for Apple to build manufacturing plants from the ground up? I mean after all, it seems every quarterly and yearly financial report is another “record breaking” event and Apple seems to have boatloads of money. One of the real questions of course is who would buy an Apple car? just because Apple is great at selling hundreds of millions of iPhones , that does not mean those customers want or need an Apple car.

mattinoz 2488 comments · 9 Years

About 3 years ago

What stops them having multiple models each made by a different group?

Apple Car Mini (2 + 2ish people) , Apple Car (5 people) & Apple Car Max (7 people)

Well apart from the trade dress issues of Apple car mini.

george kaplan 169 comments · 16 Years

About 3 years ago

M68000 said:

One of the real questions of course is who would buy an Apple car? just because Apple is great at selling hundreds of millions of iPhones , that does not mean those customers want or need an Apple car.

Those of us with memories which go back more than a decade recall that same argument was made about cellular phones and watches. Why would a computer company succeed with a cellphone much more expensive than competing models? Why would a computer company hope to carve away a small slice of a watch industry owned by European manufacturers on the high end and cheap Chinese factories on the low end?

Apple manages to find a way to place the item they’re designing in a different light. The iPhone synthesized the iPod with a phone and rudimentary computer applications, while the Apple Watch took the device deep into areas of fitness and health biometrics. The iPhone is still setting sales records when Nokia, Motorola, Ericsson, and HTC are out of the category or simply a trade name for another company. AppleWatch sells multiples of sales volume compared to the titans of the luxury watch industry, and at comparable margins.

Whatever “Apple Car” turns out to be, it will be a rethinking of mobility from what we know now. Simply building another driver-operated passenger car is old thinking. Apple is skating to where the puck will be.

lolliver 498 comments · 10 Years

About 3 years ago

M68000 said:

Imagine trying to build a car but have to rely on somebody else to do it. The challenges with knowing what is going on and controlling things. All the levels of managers and their own ideas of what should be done.

Apple already does this with every device they sell. Yes, entering into car manufacturing is going to be very different to personal electronics but that doesn't mean it's not possible. Magna International are similar to Foxcon in the automotive industry so this type of arrangement is not new to the auto industry. There are also a lot of partnerships between different car brands to release similar vehicles based on the same framework. So they already know how to work with manafers and visions from different companies and achieve agreed upon outcomes.

It makes a lot more sense for Apple to outsource production and assembly as that's how they operate for all their other devices. It's more an issue of finding the right manufacturing partners who are willing to work on Apple's terms.

The main focus of this entire article (and others like it) are on the car companies and if they are willing to work with Apple.If Apple can find the right manufacturing partners I'm sure it will work well for Apple. If this will be true for the established vehicle brands will be up to them to decide.