Hey look, it's another auto executive explaining to the world how absurd it is for Apple to make a car. It's hard, he said. It will be a money pit, he said. Apple doesn't know anything about cars, he said. And most of all, he said that the auto industry is a low margin business, making it a terrible market to enter.
The "he" in this scenario is former GM Vice Chairman Bob Lutz, and his cautionary words condemning Apple's rumored electric car are how you know this market is ripe for Apple disruption.
Here's his interview in full (via Fortune's Philip Elmer-Dewitt):
Let's take a peek at some of those comments up close.
If I were a shareholder, I'd be very upset. They are currently engaged in a very high margin business. The automobile business—at best—is a very low margin business. You can't show me one company in the world that to date has made a nickle on electric cars. They are generally money losers.
The only reason that everyone is producing them is because they are necessary to meet European fuel economy regulations and U.S. fuel economy regulations.
There's absolutely no reason to assume that Apple is going to be financially successful in the electric car business.
Actually, sir, if you were an Apple shareholder, you'd probably be pretty happy. I am, and I own an insignificant number of shares. To wit:
Ten Year AAPL Chart
Source: Yahoo! Finance
But that's not the point. Mr. Lutz is hidebound in his insider perspective on the auto industry. He can't think differently about it because he knows everything about it. We've seen the same stuff said about every industry Apple entered or was rumored to enter, from music players, to music sales, to tablets, to ebooks, to TVs.
In each case, Apple has done OK, if you're into that sort of thing. Except for TVs. Apple apparently agreed with those who said the television set business sucks.
Now we're seeing it with cars. Dieter Zetsche, Chairman of Daimler AG and chief executive of Mercedes-Benz Cars, said many of the same things, though he did so with more class. His focus was the low margins that is a favorite bullet point for Apple doubters. Former General Motors CEO Dan Akerson was openly skeptical of Apple's long-term prospects in the market.
Mr. Lutz, however, is my new poster child for this attitude.
Next: Apple Has No Expertise in Batteries