Why Car Manufacturers Are Afraid of Apple and Google

For informed observers roaming through the Geneva Motor Show, it was plain to see that the heads of major automotive brands were fed up with being talked to about Google and Apple as “potential competitors.” The head of Daimler started off his press meeting by asking reporters to refrain from wasting too much time talking about Apple. On the other hand, Carlos Ghosn, the head of Renault-Nissan, didn’t even get the chance to warn reporters before the first question was asked: So, what about Apple?

These are the questions irking the automotive world. It must be noted that, particularly because of the decline of the euro, car sales in Europe have been increasing over the last 17 consecutive months, which is a sign of newfound health. Yet, this has been eclipsed by the fact that everyone is wondering whether the automotive industry will be the next industry to be overturned by the Silicon Valley heavyweights. This is the question being asked because we can clearly see that tomorrow’s cars will become increasingly connected. And Apple and Google, just to name two, are lined up to ride shotgun in the connected cars of the future!

While the automotive industry may be establishing partnerships with these Internet giants, it is clear that the former is still suspicious of the latter. The auto industry remembers what happened to the computer industry: In the end, software became more important, while the industrial platform — in other words, the rest of the PC — had been outsourced to Chinese manufacturers! The heads of the auto industry are not idiots, and they know that they’re not even safe from newcomers who are capable of destroying their economic model. This is sort of the case with the arrival of Tesla electric cars, a company founded by a visionary who knew nothing about the automotive world. And they used to tell us how impossible it was to gain entry to this exclusive world. …

But beyond this concern, the heads of the automotive industry present at the Geneva Motor Show defended themselves by repeatedly telling the press that building a smartphone is very simple in comparison to building a car. It takes seven years for an automobile to leave the production facility, from the moment it is designed to the moment it enters into circulation, while designing a smartphone only takes 18 months. Not to mention that the engineering a car needs is infinitely more complex than the engineering required for a smartphone, particularly because security is a priority.

These are some of the arguments that the top dogs of major automotive brands generally assert. While they are partly true, their answers really show that they feel uneasy about Google, Apple, Microsoft, and other technology companies. They’re right to be afraid; it’s because of underestimation that companies like Kodak and Nokia have either disappeared or are not in top shape!