German luxury car makers Audi, a unit of Volkswagen AG, Mercedes-Benz parent Daimler AG and BMW AG have agreed in principle to purchase Nokia’s HERE digital mapping service for approximately $2.7 billion. It is rumored that provided a deal is firmed up, the troika will invite other automotive companies such as Fiat Chrysler Automobiles NV, Renault SA, PSA Peugot Citroën, Ford Motor Co., Toyota Motor Corp. and General Motors to invest in the mapping service.
“The goal has always been to run the service as an open platform for everyone,” said an anonymous source, as related by the Wall Street Journal. “The final signing could take place in the next few days.”
Nokia HERE has generated more than half its $1 billion in 2014 sales from the automotive industry; the remainder came from location-based services.
The automakers have been under some duress at the possibility that Nokia HERE’s technology, which is considered the most advanced digital mapping platform for the world’s major road networks, would fall into the hands of Google Inc., Uber Technologies Inc. or Apple Inc., any of which potential buyers would pose a risk of automakers losing control of information systems inside their products vital to self-driving cars and future automotive safety systems.
“We are not just building a map,” said Floris van de Klashorst, head of Nokia HERE’s connected driving business, during a recent interview. “We are creating a 3D high-definition digital representation of the world in real-time. [We] need more car companies involved. The more cars providing information the better the map.”
Neither side of the potential deal has issued a statement.