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Apple should reverse out of car plans, ex-GM boss warns

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Apple has been warned against entering the car manufacturing industry by the former CEO of one of America’s largest auto makers.

In response to rumours Apple plans to build its very own Tesla-killer, former General Motors CEO Dan Akerson says Apple’s chances of success in the ‘low-margin, heavy manufacturing’ business were slim.

“I think somebody is kind of trying to cough up a hairball here,” Akerson told Bloomberg.

“If I were an Apple shareholder, I wouldn’t be very happy. I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing.

“Look at the margins of an iPhone versus a car,” he added. “I’d rather have the margins associated with the phone and produce [them].”

Speculation has been rife, over the last few weeks, suggesting Apple is broadening its automotive horizons beyond CarPlay’s entertainment and navigation platform and into full on manufacturing.

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The firm has recently poached several employees from Tesla and most recently nabbed Mercedes-Benz’ head of R&D ahead of a possible expansion into the sector.

“They’d better think carefully if they want to get into the hard-core manufacturing,” he said of Apple. “We take steel, raw steel, and turn it into car. They have no idea what they’re getting into if they get into that,” Akerson added.

Do you reckon the rumoured Apple Car plans will ever get out of first gear? Let us know your thoughts below.

Frederick Flynn

February 18, 2015, 9:13 pm

I think he's missing the point about the apple brand. The reason apple makes so much money is because it can get away with charging so much more than what people would pay for the same product from a different brand.

You can see some of apples rich cultist-like followers paying £100,000 for a car that only costs £30,000 to make.

Awatha

February 19, 2015, 10:47 am

Phones come with all sorts of profit margins, as do cars. Apple gets high profit margins on phones because of design and marketing brilliance, not something GM has been credited with for many years - if ever.

I'd find it hard to write a better article explaining why Apple SHOULD get into car manufacture. New thinking is needed. Akerson is the last person I'd listen to on this subject. He's up to his neck in vested interests. He's not stupid so I can only believe that he is being deliberately disingenuous and is running scared.

ElectricSheep

February 19, 2015, 12:51 pm

Dan Akerson is yesteryear's news, as is much of the auto industry. There is plenty of room in the market for Apple and Tesla to go head to head with interesting and innovative products that the more tradition players in the automotive industry couldn't dream of developing. I'd say this is very good news for shareholders, in the long run.

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