Google And Fiat Chrysler In Talks of Making Self-Driving Car

Google and Fiat Chrysler Automobiles NV are close to agreeing on a partnership that could break boundaries between Silicon Valley and the auto industry in the race to develop self-driving cars, people familiar with the discussions said on Friday.

Automaker Fiat Chrysler and Google are reportedly inching toward a seemingly unlikely technology partnership unheard of in today's economic environment. If the late stage talks will culminate in an agreement, the collaboration will be a trail blazer as the two companies break the traditional boundaries that separate car manufacturing industry from the Silicon Valley.

For quite some time, Google has been trying to develop self-driving cars using the resources at its disposal. Apparently, the whole venture of creating driverless cars requires deeper expertise and technological understanding in carmaking that only automakers can sufficiently provide.

"Dialogue continues with people who are interested in exploring their relevance in the automotive world and we will continue to help them find their way out," Fiat Chrysler Chief Executive Sergio Marchionne as quoted by Reuters.

Does a Fiat Chrysler-Google partnership make a lot of sense?

Fiat Chrysler's dalliance with a Silicon Valley titan seems like the big break that the automaker has been looking for. After all, being a minnow in the car business requires billions of R&D spending in order to catch up with its rivals that are already leading in terms of next-generation driving technologies. Getting Google on prospective deal may seem like a tempting offer from an investor standpoint.

For years, Fiat Chrysler has been searching creative ways to reinvigorate its struggling business to stay profitable. It talked with both General Motors and Ford Motor for merger but was declined due to the cost. Also the company also courted other notable tech giants like Apple and Tesla for a partnership leading to a breakthrough product it hopes to commercialize one day.

In Google's case, a partnership with an automaker would make it easier for Google to make use of the already established network sales and service locations of major car manufacturer around the world.

"On paper, such a partnership makes sense. Alphabet is diving head first into the automotive business, but lacks the manufacturing capability to roll out vehicles for the masses and has said it has no desire to get into the car making business," wrote analyst Lou Whiteman of The Deal as quoted in The Street report.

"Google has been testing self-driving vehicles on highways for more than five years, and of late have made a series of auto-related hirings and comments that indicate the company believes it is closer than many expected to bringing out a commercial product."

However, some big automakers remain wary of any deal with the tech giant over profit concerns. Meanwhile, Google repeatedly said that it would not go too far as to manufacture cars in direct competition with the more established industry players. The company would rather license its technology to carmakers.

"We want to partner to bring self-driving to all the vehicles in the world," said Alphabet President and Google co-founder Sergey Brin, Daily Mail reported.