Kia SportageSource: Kia

What you need to know

  • Hyundai executives are reportedly divided over the prospect of Apple Car.
  • A new report says some are concerned at the thought of becoming a contract manufacturer for Apple.
  • Recent reports revealed that Hyundai was in talks with Apple over a deal and that it could make the car in the US through its Kia brand.

A new report says Hyundai executives are divided over the prospect of an Apple Car deal, amidst concerns it could become a contract manufacturer for another brand.

From Reuters:

Executives in Hyundai Motor Co Group are divided over a potential tie-up with Apple Inc, with some raising concerns about becoming a contract manufacturer for the U.S. tech giant, dimming the outlook for a deal.

As the report notes, Hyundai recently let slip that it was in talks with Apple over a potential apple Car deal, from that report:

As reported by Korea Economic Daily (via Google Translate), Apple may be partnering with Hyundai Motor Group to launch its self-driving electric car.

As a result of an interview with Korea Economic Daily on the 8th, it was confirmed that Apple is in the process of negotiating and proposing cooperation with the Hyundai Motor Group to launch an Apple car. Inside the Hyundai Motor Group, the review has already been completed, and it is said that only the home of Chairman Eui-sun Eui-sun remains.

More recent reports suggested that Hyundai might hand of Apple Car to Kia and that it could even be made in its US plant at West Point, Georgia. Some executives are apparently not convinced, however:

"We are agonizing over how to do it, whether it is good to do it or not," said a Hyundai executive aware of the internal discussions on the tie-up with Apple. "We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results."

The report notes that Hyundai is "traditionally known for its reluctance to work with outsiders", keeping much of its production in-house. Talks are reported to have begun in 2018 but have been hampered by this philosophy. The report continues:

"Apple is the boss. They do their marketing, they do their products, they do their brand. Hyundai is also the boss. That does not really work," the person said.

The South Korean car manufacturer, however, has excess capacity. Contract manufacturing would help it secure production volume.

One person familiar with the matter reportedly noted that Apple "would prefer to source major components of its own design" including the frame, body, drive train, and more, relying on Hyundai or Kia simply for final assembly. Apple has reportedly further stated that it wants the final assembly to be done in the United States. Hyundai has apparently "tentatively decided" Kia, not Hyundai Motor, will be the partner.

Reports have stated that an Apple Car is reportedly several years away.