Big Tech X Big Auto

AI in cars seems to be the new thing!
Some interesting talks in this space: –

Amazon X Ford Motor Company – More Here 
Apple X Hyundai Motor Company – More Here
Microsoft X General Motors – More Here

Though these are big tech companies collaborating with players in the auto space, one might think why not BIG Tech enter into this space on their own. They have the money, right? Possible reasons could be: –

  • Economies of Scale: These auto companies already produce thousands of cars a year. As such they have good economies of scale and their cost of producing an individual car will be very low as compared to these big tech who would be starters in this space.
  • Clunky Supply Chain: Automobile manufacturing involves acquiring and assembling various parts from different manufacturers. Also they have already established their complex distribution channels which span worldwide. Doing either of these from the start would add atleast a couple of years to see the results.

Besides, doing what you are good at and outsourcing(or collaborating with) others in the areas where they are good at, is always better than spending time and resources on such stuff and the possibility of failure lurking around!

Shreesha S
Shreesha S

Shreesha is a Qualified Certified Management Accountant(CMA) and Certified in Strategy and Competitive Analysis(CSCA).

Articles: 195

One comment

Leave a Reply

%d bloggers like this: