South Korean automakers Hyundai Motor and Kia Motors said Monday they were not in talks with Apple to develop an autonomous vehicle.
Hyundai Motor shares fell 4.41% on Monday in South Korea, while Kia Motors shares fell 12%. Other subsidiaries such as Hyundai Wia, Hyundai Mobis and Hyundai Glovis also fell sharply.
“Hyundai Motor is receiving requests from several companies to collaborate on the joint development of autonomous electric vehicles, but nothing has been decided as it is in the early stages,” the company said, according to a CNBC translation of a regulatory filing.
“Hyundai Motor is not in talks with Apple about autonomous vehicle development,” he added.
Subsidiary Kia Motors, the second largest automobile manufacturer in South Korea after Hyundai, submitted a similar report. The company is currently evaluating the prospect of working with “multiple companies overseas” on autonomous electric vehicles, but nothing has been decided yet.
Kia Motors also said it was not in talks with Apple.
Hyundai initially said it was in early talks with Apple last month, but later revised the statement and made no mention of the iPhone maker. This led to a surge in the shares of Hyundai and its affiliates, including Kia Motors, at the time.
This month, CNBC reported that Apple is on the verge of signing a deal with Hyundai-Kia to manufacture an Apple-branded autonomous electric vehicle at the Kia assembly plant in West Point, Georgia. Sources told CNBC’s Phil LeBeau that an agreement has not yet been reached and that Apple may ultimately decide to work separately or in addition to Hyundai with another automaker.
Stocks can keep falling
According to Sung Yop Chung, private investors have had Hyundai Motor and Kia shares valued at approximately 915.7 billion won (817 million US dollars) and 798.8 billion, respectively, since January 8th speculation about a possible collaboration with Apple Won (around $ 713 million). Regional Head of Automobiles and Components at Daiwa Capital Markets.
“After the negative sentiment from both (Hyundai Motor) and Kia’s filing this morning highlighting that there is currently no EV collaboration with Apple, worst case scenario suggests Kia’s shares could correct up to 31%” he told CNBC’s Chery Kang.
Apple is known for putting a lot of emphasis on secrecy, but news of a possible collaboration with Hyundai was still spreading by the local and international press, Chung told CNBC’s Street Signs Asia on Monday. “I think Apple probably wasn’t happy about that.”
“From Hyundai’s point of view and Kia’s point of view, there could have been a conflict of interest,” he said. “They don’t really want to just sub-contract Apple. I think they wanted to take advantage of Apple’s strong software capabilities.”
Chung stated that it was still possible for either side to re-examine the deal at a later date, as Hyundai said in its regulatory filing that it was in talks with several companies.
“I wouldn’t say this is the end, I would say it is a temporary standstill if you like the negotiations between the two groups,” he said.
Speculation about Apple’s entry into the auto business has been rife for several years, but nothing specific has occurred.
Some Wall Street analysts see the automotive industry as a new market for Apple to grow into, but others caution against the reality of making an Apple-branded car as it could potentially mean high investments for low margins.
– CNBC’s Chery Kang contributed to this report.