Fiat’s Secret Self-Driving Car Shows How Industry May Evolve

Fiat Chrysler has garnered outsized headlines for becoming the first traditional carmaker to make electric minivans with self-driving technology designed by Alphabet’s Waymo. Behind the scenes, however, Fiat Chrysler is developing its own autonomous vehicles so that it won’t be just a metal bender for tech companies like Waymo, The Information has learned.

Details of the previously undisclosed program underscore how automakers are grappling with the shift toward automated vehicles. Both Fiat Chrysler’s two bigger U.S. rivals, Ford and General Motors, are also working on their own self-driving cars. And like those companies, Fiat Chrysler plans to integrate self-driving components designed by others to fit its unique technical requirements, thereby creating a differentiated riding experience.

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Fiat Chrysler has been pushing for further consolidation in the auto sector, believing it will help head off tougher times ahead. Fiat’s leaders think that carmakers, whose profit margins generally are in the single-digit percentage points, will be further squeezed as more of the value of cars comes from technology produced by other companies in areas like infotainment, electrification and autonomous technology. Cars may thus become akin to PCs, with razor-thin margins across most of the market and an inevitable consolidation as a way to gain scale and reduce costs.

James Bishop and Andre Alfred commented on this article.
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The carmakers, including Chrysler, will be “the prime contractor who owns the integration [of self-driving technology with the car] but they may or may not own any of the pieces themselves.”