Speaking on the day of Ferrari’s initial public offering, the company’s chairman who is also CEO of Fiat Chrysler said America’s auto industry needs to kick things into overdrive to keep up with innovators in Silicon Valley.
“This industry in general has to open up to disruptors,” Marchionne told CNBC. “I think we have been late to the party.”
Though Marchionne’s comments were largely overshadowed by the hoopla surrounding Ferrari’s first day of trading, they reflect what many people have been thinking for some time: Detroit may be the heart and soul of America’s auto industry, but the brains appear to be shifting to California. That’s where Tesla,Google, Apple and other technology firms are changing how cars and trucks operate.
“Whether it is the Google car [or] the Apple car, this notion we are seeing with autonomous driving and assisted driving is going to change the traditional nature of car making,” he said.
To be sure, Fiat Chrysler, General Motors and Ford are racing to not only keep pace with upstarts in Silicon Valley, but to become leaders in innovation. Earlier this month, GM announced plans to test autonomous drive vehicles in the Detroit area late next year.
“We are working to redefine personal mobility and how [people] will get from point A to point B going forward,” GM CEO Mary Barra said at the time.
Ford has opened a research center in Silicon Valley as part of its push to be closer to the ideas swirling in the tech industry.
“We want to be viewed as a partner [with tech firms] and be a part of this community,” CEO Mark Fields said.
Still, when you compare shares of GM and Ford over the last few years with Tesla or Mobileye, an autonomous-drive technology firm, it’s clear investors are far more excited about the “new” guard of auto innovation.
Whereas Tesla shares are up some 25 percent over the past two years and Mobileye roughly 30 percent higher since going public last summer, shares of GM and Ford are flat or down in the past two years.
“Investors are tuned into what’s the new technology and where is the big growth in future in autos,” said Richard Hilgert, automotive analyst with Morningstar.
The big unknown for Detroit is whether Apple gets into the auto business. Sources have told CNBC that the tech giant is working on developing a car, and has hired executives from automakers and tech firms as it secretly works on the project.
Officially, Apple won’t comment on its plans, though CEO Tim Cook said at The Wall Street Journal’s digital conference this week that autonomous drive technology is coming quickly.
“It would seem like there will be massive change in that industry,” he said.
Marchionne said he expects an Apple car to eventually hit the street.
“Are they going to get a car made or are they going to build a car? Those are two separate questions,” he said. “I doubt it very much that they will set up infrastructure to manufacture cars. They will rely on somebody. They have not approached us.”
While Marchionne warned the traditional auto industry not to fall asleep at the wheel when it comes to keeping up with the likes of Tesla CEO Elon Musk, he said the race is far from over.
“As much as I reiterate my affection for Elon, there is nothing Elon does that we cannot do,” he said.
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