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Ahead of the Curve Auto Supplier Blog

March 04, 2016

Here he goes again . . .

Sergio Marchionne is at it again. At this week’s Geneva (Switzerland) Auto Show, the deal maker king and still wannabe dealmaker suggested that his Fiat Chrysler Automobiles would be an ideal manufacturing partner for Apple.

A few months ago Marchionne was knocking on the door of General Motors, where he was rebuffed, and he’s often been quoted as saying his industry is too big and too fragmented and needs to consolidate. In other words, ‘Doesn’t anybody want to partner with us?’ The Ford-Google marriage expected earlier this year never made it to the altar, or at least to the media (Is there a power struggle underway?), so Fiat and Apple could be the joint technology trendsetters for this brave new automotive age. Can you just imagine the lines around the block of Apple/Jeep dealers waiting for the release of the Apple/Jeep Wrangler 7S?

Marchionne’s suggestion of an Apple-Fiat partnership would have Fiat Chrysler providing the car and Apple creating all the technology and electronics that go into it. He says he’s ready to take a subservient role in the proposed partnership. This is unusual, he acknowledges, because auto manufacturers “usually come into the dialogue with a high degree of arrogance as we know how to make cars.” Marchionne continues, “That’s not very helpful as their (Apple’s) syntax is worth more than our ability to build cars.”

So Marchionne is willing to let Apple be the lead dog, just as Fiat was the lead dog in the Fiat-Chrysler merger. He admits to unabashed admiration of Apple and his proposed partnership would be a way to address his oft-stated belief that the auto industry wastes capital and needs to change. Not coincidentally, a merger or partnership would also help him leapfrog his competition in the electric vehicle technology race because Apple has exactly what Marchionne and Fiat needs – cash and R&D to take them to the next level.

Pretty shrewd thinking from the shrewd thinking Canadian-Italian dealmaker. If it happens, it could be a huge opportunity for the supply industry, so it behooves suppliers to watch the bouncing ball closely and to be ready to pounce as soon as any kind of deal starts to form.

Like we do with all things automotive, our Automotive Industry Practice Group is paying close attention to Mr. Marchionne’s statements. We’re ready to jump on that bouncing ball whenever it makes sense to help our supplier clients find a point of entry, design their plan of attack and get into the game. It could definitely be one worth playing.
 

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