But on Wednesday, Fiat Chrysler said that it would join BMW’s existing alliance with Intel and the chip maker’s newly acquired self-driving technology unit, Mobileye. Fiat Chrysler and BMW said they were open to additional partners.
“There was an expectation Fiat Chrysler was resigned to being a hardware manufacturer for Apple or Google,” said James Hodgson, a senior analyst at ABI Research. “This is a sign that they are going to take a more active role.”
Since last year, BMW has been working with Intel and Mobileye, an Israeli company that makes cameras, sensors and software used in self-driving vehicles. Intel acquired Mobileye in a deal that closed last week, in what was seen as an attempt by the chip maker to catch up with its rival Nvidia in self-driving technology.
Fiat Chrysler is not likely to bring much self-driving know-how to the alliance, Mr. Hodgson said. But, he noted, its experience producing less expensive, mass market vehicles will complement BMW’s strong position in the high end of the car market.
“In order to advance autonomous driving technology,” Sergio Marchionne, the chief executive of Fiat Chrysler said in a statement, “it is vital to form partnerships among automakers, technology providers and suppliers.”
Still, it will be a huge challenge for established carmakers to remain relevant. They are experts in manufacturing vehicles that run on internal combustion engines in large numbers for affordable prices. But that skill will become less relevant if, as expected, battery-powered cars become ubiquitous. Electric vehicles have fewer parts than their conventional counterparts and are easier to manufacture.
In addition, the financial resources of the Silicon Valley companies dwarf those of the automakers. Apple is worth 40 times as much on the stock market as Fiat Chrysler. Indeed, if they chose to, Apple or Google could acquire a carmaker for sums that, by their standards, would amount to pocket change.
Mr. Hodgson said it was possible for established carmakers to be able to defend their positions, but, he added, “You should not underestimate the challenge facing them.”