Car executives are taking seriously the prospect that Apple and Google will emerge as competitors even as they consider partnering with the two. "If these two companies intend to solely produce electric vehicles, it could go fast," Volkswagen boss Martin Winterkorn said. "We are also very interested in the technologies of Google and Apple, and I think that we, as the Volkswagen company, can bring together the digital and mobile world."
Winterkorn said the entry of these firms - popular with the “iphone generation” would be good for the industry as it would introduce these younger consumers to the motor sector and then it was up to each firm to prove itself to have the best products.
Similar sentiment was expressed at Fiat Chrysler. "It's exactly what this industry needed: a disruptive interloper," said Sergio Marchionne, chief executive of Fiat Chrysler. "It's a good thing but when you are one of the guys whose life is being disrupted then you are not necessarily looking forward to the event."
Their views were echoed by Opel boss Karl-Thomas Neumann, who said that Opel and its parent General Motors have already experience working with the likes of Apple and Google.
Apple has been working on an electric vehicle and is pushing to begin production as early as 2020 according to reports. Google said in January it aims to have a self-driving car on the road within five years. The timeframe - automakers typically need at least five years to develop a car - underscores the aggressive goals of the two technology companies and could set the stage for a battle for customers. Tesla and General Motors - parent company of Opel - are both targeting a 2017 release of an electric vehicle that can go more than 350 kms on a single charge.
Tesla's success in creating a start-up car company has also shown that the traditional barriers of entry into the auto industry aren't as difficult to overcome as some thought. At the same time, automakers have struggled to bring technical leaps to car development, something that Silicon Valley is also seeking to accomplish. For example, Google has invested in developing an autonomous vehicle since 2010. "We never underestimate any competition," said Ian Robertson, BMW's sales chief. "The entry barriers, which were in the past maybe more substantial, are now slightly lower. But at the same time, the complexities of the car industry are still there as well."
An experienced automaker typically spends five-to-seven years developing a new vehicle from scratch, with just the testing phase needed to get regulatory approval often taking three years. Analysts estimate for a company from outside the industry to build a car could take a decade.
