Apple Inc.’s plan to enter the auto industry is “a very logical step” as the iPhone maker combines its expertise in software, batteries and design with enormous resources, according to Volkswagen AG Chief Executive Officer Herbert Diess.

“Despite that, we’re not scared,” Diess said in an interview with Frankfurter Allgemeine Sonntagszeitung. The car sector is different from the technology industry, and Apple “won’t manage to take it over overnight.”

Diess dismissed concerns Europe’s largest automaker could be degraded to a contract manufacturer for technology firms. Cash-rich U.S. and Asian technology giants are plotting inroads into the industry as cars gradually turn into software-intensive self-driving vehicles.