Fiat Chrysler Automobile’s search for new partners may be taking an unexpected turn.
After being rejected by major competitors including General Motors and Ford, FCA Chief Executive Sergio Marchionne already has lined up a fledgling alliance with Google to build 100 autonomous vehicle prototypes. And a new report suggests the CEO has launched additional talks with ride-sharing giant Uber, as well as mega-retailer Amazon.com.
The discussions, if true, suggest that Fiat Chrysler, long the high-tech laggard among Detroit’s Big Three automakers, now sees its future dependent upon deals with some of the world’s most technologically sophisticated firms, with an emphasis on non-traditional transportation solutions.
“The question here is if Fiat Chrysler is right in working with new industry participants or it should rather try to compete with them like the other carmakers are doing,” Massimo Vecchio, an analyst at Mediobanca in Milan, told the Reuters news service.
The analyst was upbeat about the reported approach, suggesting that, “We believe that the scenario where every carmaker develops its own autonomous driving is another example of capital wasting in the industry.”
Autonomous driving has become a mantra within the auto industry, virtually every major automaker now promising to launch semi-autonomous technology before the end of the decade, and fully self-driving vehicles soon afterwards. But that push has led to the arrival of some non-traditional players, notably Google which is considered by many experts to have the most advanced autonomous vehicle program, at least for now.
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Google has said that it does not want to build cars on its own but would rather find partners. And it announced its first industry alliance last month with Fiat Chrysler. The trans-Atlantic automaker will install Google’s autonomous technology in 100 prototype versions of its new Chrysler Pacifica Hybrid minivan.
While Marchionne has hinted the new partnership could further expand, both FCA and Google made it clear the deal was non-exclusive. And Fiat Chrysler continues to search for new partners, according to various sources within the industry.
The new Reuters report indicates that Uber and Amazon could be FCA targets. That wouldn’t come as a big surprise considering both companies are heavily dependent on transportation, whether to provide rides for customers or to deliver goods.
Amazon has said it is looking for novel alternatives and is looking at ways to deliver orders by drone, for example. Uber, meanwhile, last month opened a new autonomous vehicle research center of its own in Pittsburgh. Its eventual goal, according to founder Travis Kalanick, is to eliminate the driver entirely.
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“When there’s no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away,” said Kalanick during the Code Conference, a software trade confab, in 2014.
According to one source TheDetroitBureau.com spoke to, FCA may be taking the strategy “it is better to be with them than against them,” when it comes to Uber.
FCA wouldn’t be the first automaker to see opportunity in a tie-up with a new-tech firm. Toyota recently did its own deal with Uber. Volkswagen has invested in the Israeli-based ride-sharing service Gett. General Motors not only invested $500 million in Uber’s chief rival, Lyft, but started car-sharing service Maven.
Both GM and Toyota are planning to offer deals to ride-sharing drivers to expand the market for their vehicles. GM, in fact, said it specifically designed the new Chevrolet Bolt with the goal of using it for ride-sharing.
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FCA has not commented on the Reuters report, and Amazon and Uber have declined comment, as well.