[ad_1]
Fancy varieties of fruit can come expensive in Japan. Nissan may see a potential tie-in with Apple as costly too. It is just the latest Asian carmaker to which the smartphone company has reportedly mooted a collaboration in electric vehicles.
A tech giant with vast financial and marketing muscle has potential as a partner. But the disparities between Apple and Nissan may give the Japanese automaker pause for thought.
Apple is strong. Nissan is weak. There would be no doubt which would be in charge. Apple’s $77bn cash pile is triple Nissan’s market capitalisation. The lossmaking Japanese group is in the midst of a painful restructuring.
Nissan knows how to make electric cars after a decade of experience with its Leaf vehicle. It needs help to progress. Its global market share in EVs is a paltry 2 per cent, notes Julie Boote at Pelham Smithers.
But committing to Apple could mean sacrificing years of brand building. Nissan has new models on the way, including the Ariya — a flagship all-electric SUV.
The nightmare for Nissan would be becoming just another Apple contract manufacturer like Foxconn (which has EV plans of its own). After years of volume growth, the latter’s operating margins have more than halved since 2016.
Such fears may explain why Hyundai pointed Apple in the direction of its Kia subsidiary, and why their talks stalled over branding.
Nissan might try a similar gambit with Mitsubishi Motors, in which it has a one-third stake. Though struggling, Mitsubishi has the popular Outlander plug-in hybrid SUV. One possibility is that Nissan could make an underutilised US plant available. Stung perhaps by conscience, Apple is keen to make its EVs in America after generating huge profits by outsourcing much of its device production to Asia.
Reticence among potential Asian partners should be a wake-up call to Apple. Expertise and sunk investment in traditional car production is undervalued by the world. But it is not available to tech giants simply for the asking.
If you are a subscriber and would like to receive alerts when Lex articles are published, just click the button “Add to myFTâ€, which appears at the top of this page above the headline
[ad_2]
Source link
