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Cars are set to be the next smartphone: Hyundai CEO

Dave Zuchowski, CEO of Hyundai Motors America
David Montalvo | CNBC
Dave Zuchowski, CEO of Hyundai Motors America

Technology is moving rapidly from the app economy of the smartphone to automobiles — a transition for which both tech companies and automakers are rapidly preparing.

On the road, tech companies like Google and Apple are leading the charge for self-driving cars. Meanwhile, car manufacturers like Volvo are preparing their fleet for the day autonomous vehicles take the road, with sometimes unintentional results. Earlier this year, the Swedish company announced that it would be the first automaker to replace physical car keys with a smartphone app.

It's all part of what Hyundai Motors America CEO David Zuchowski said is a "big transformative event" that could eventually result in cars replacing mobile phones as smart devices.

"We need to embrace technology like everybody else is," Zuchowski told CNBC in a recent interview from the sidelines of this year's New York International Auto Show, where the automaker was marking a decade of raising funds for pediatric cancer.

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Hyundai's nonprofit arm has raised more than $115 million for pediatric cancer research since it began 18 years ago, and it says it receives a donation from every new car sold from participating Hyundai dealers. To date, that includes all 830 dealers across the U.S.

As a result of the boom in self-driving cars and other technology, Zuchowski expects the bridge between Silicon Valley and auto companies to narrow.

Surrounded by other auto companies like his former employer, Ford, Zuchowski mused openly about the possibility of an Apple-branded automobile — bearing that unmistakable new car smell — at an auto show display sometime in the future. Unlike what some of his peers in the auto industry have suggested, Zuchowski doesn't actually believe that will happen.

"Google, Apple and Uber to some extent want to own the interior part of vehicles," he told CNBC, which is different from manufacturing a physical car itself.

Allies but not competitors

Once tech companies look at the costs and complexities involved in building a vehicle, Zuchowski explained, he believes they will be content with simply manufacturing software for existing cars.

This, he added, could lead to a symbiotic relationship rather than a rivalry between the auto and tech industries.

"There will be alliances," Zuchowski said, that could turn automakers into "hardware makers" for Silicon Valley. Still, when it comes to Apple, "I don't see us competing with them."

He suggested that such a partnership could allow tech companies to focus on what they already do best for consumers — creating applications that make consumers' lives easier.

"They want an Apple experience," Zuchowski said. "The car is the ultimate mobile device, right?"


The idea of a "connected car" has surged in popularity in recent years. In fact, some auto chiefs have already tossed their hats into the ring to build Apple's car, even as the vehicle itself remains shrouded in mystery.

However, skepticism abounds about whether tech companies can replicate a formula perfected by old-line car manufacturers. Fiat Chrysler CEO Sergio Marchionne earlier this year offered his company's manufacturing services to Apple, along with some unsolicited advice.

"We have the credibility to be one of the players they have looked at," Marchionne told Automotive News last month. "If they have any urges to make a car, I'd advise them to lie down and wait until the feeling passes."