Google Attracts Top U.S. Automakers With Self-Driving Technologyby
Ford, Fiat Chrysler, General Motors consider partnerships
Traditional manufacturers mull relationship with Google
Google’s self-driving car technology is attracting top U.S. automakers, as Ford, Fiat Chrysler and General Motors talk with the company while laying the groundwork for a future with autonomous cars.
Ford Motor Co. and Google are discussing working together, including in a joint venture to build cars using Google’s technology, said a person familiar with the talks who asked not to be identified because the discussions are private.
That follows comments in October from Mark Reuss, product development chief for General Motors Co., that the automaker was “very interested” in exploring ways its manufacturing skills could complement Google’s system. Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles NV, has said repeatedly the past few months that his company wants to work on autonomous driving with technology companies such as Apple Inc. and Google.
“We are entering the era of the technology and software-defined vehicle,” said Thilo Koslowski, a vice president in the automotive practice at Gartner Inc. “You’re just seeing the auto industry recognize the importance of that.”
Automakers are getting close to Google as they consider using the search giant’s technology to add brains to their vehicles, instead of building their own rival systems. It’s a mutually beneficial relationship, Koslowski said.
“Some Silicon Valley companies would like to do everything themselves, but it’s really the car companies that understand the automobile,” he said. “On the same side, a lot of technology companies have expertise on their side, which is interesting to the automotive companies.”
Yahoo Autos reported Monday that Ford would announce a joint venture with Google on self-driving technology in January at the Consumer Electronics Show in Las Vegas. “We have been and will continue working with many companies and discussing a variety of subjects related to our Ford Smart Mobility plan,” Alan Hall, a spokesman for the automaker said Tuesday in a statement. “We keep these discussions private for obvious competitive reasons, and we do not comment on speculation.” An agreement with Ford wouldn’t preclude Google from similar deals with other automakers.
“In order to reach our long-term goal of transforming mobility for millions of people we’re talking to many different companies about how to bring self-driving vehicles into the world safely, but we’re not going to comment on rumor or speculation about specific conversations,” Johnny Luu, a Google spokesman, said in an e-mail.
GM CEO Mary Barra and Volkswagen brand chief Herbert Diess are scheduled to give keynote speeches at CES. The annual event in Las Vegas has become more important for automakers and manufacturers including Toyota Motor Corp. and Kia Motors Co. are holding press conferences to discuss their latest innovations.
In recent years, carmakers have added more electronics to vehicles and have started talking as much about their computer-aided systems as about engine technology. Self-driving cars add other layers of complication that will require major investment by the auto companies. Toyota said in November it plans to start a five-year, $1 billion research and development effort in California to add self-driving capabilities to its vehicles.
Google spent almost $10 billion on research and development in its 2014 fiscal year. The company doesn’t disclose what proportion goes to cars, but it has tested self-driving cars for more than 2 million miles. Company co-founder Sergey Brin said at an event in September that Google was likely to partner with “top tier” manufacturers to bring its products to market. The company also is considering making its self-driving cars available as a service, so they can be periodically returned to Google to be upgraded, he said.
Google plans to makes its self-driving car unit a stand-alone business under the Alphabet Inc. corporate umbrella next year.
The main question is how technology companies and the automakers will work together, Koslowski said.
“We can’t ignore the power and the clout and the might that these tech companies have,” he said. “The big question is, if the vehicle manufacturers would ultimately just focus on the manufacturing aspect?”
Instead, the manufacturers may need to partner with companies like Google in the short term so they can develop the technical expertise needed to eventually offer their own products.
“We can’t replace Google and other tech companies, we should work with them,” Fiat Chrysler’s Marchionne told reporters in early December. “They are bigger and stronger than us and they financially can spend more than us.”