Rumor: FCA puts the moves on Google

April 29, 2016

Industries are built on strategic partnerships. The right collaboration can do wonders for a bottom line. The wrong collaboration? Well, remember AOL Time Warner

Fiat Chrysler Automobiles CEO Sergio Marchionne has been searching for the perfect partner for more than a year. He's been shot down by General Motors and by Ford, but now comes word that he may have found a different sort of match in Google.

The Wall Street Journal and both cite an unnamed source who says that FCA and Google are in late-stage negotiations involving a technology partnership related to the 2017 Chrysler Pacifica minivan. Neither FCA nor Google have commented on the report, but during a call with analysts held Tuesday, Marchionne said that FCA was exploring tie-ups with companies outside the traditional auto industry.

The discussions, Marchionne explained, are confidential. However, he said that he hoped there'd be something official to announce before the end of the calendar year.

What's at stake?

The details of the alleged negotiations are anyone's guess, but it's a fairly sure bet that they bear no resemblance to the sort of discussions that Marchionne wanted to have with GM and Ford. In those cases, Marchionne sought to partner with other automakers to minimize costs and maximize resources. Google wouldn't be much help on either of those fronts.

It also seems unlikely--not impossible, just unlikely--that FCA is angling to produce vehicles on Google's behalf. As of last December, it appeared that job was going to Ford, although we haven't heard much about that rumor lately. And besides, if Marchionne were going to build cars for anyone, he's made it clear that he'd like to do so for one of Google's biggest rivals, Apple.

If we were the betting type, we'd probably wager that FCA was hoping to equip the Pacifica with Google's autonomous technology. Why?

For starters, minivans are often bought by parents of young children, and safety ranks high on their list of shopping criteria. Autonomous features like those that Google has been developing promise to make vehicles safer, meaning that minivan consumers may be willing to shell out the extra dough for them.

Furthermore, FCA hasn't carried out much work on autonomous cars--at least not compared to its competitors. Partnering with Google could be a good way to add autonomous options akin to Tesla's Autopilot to the minivan without investing the time and energy FCA would need to develop that technology on its own.

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