The TomTom telematics division is being prepared for the possibility of a sale, in a bid to raise cash and to focus on its primary map and navigation software divisions.
In a press release, TomTom said: “After several expressions of interest and following a diligent review during the summer, it has decided to explore strategic alternatives for its telematics business unit, which may result in a sale of the division.”
Focusing on fleet connectivity and management, the TomTom telematics division has been valued at €700m (£624m). Stock prices in the company rose by 17% to €7.25 on the news of the division’s potential sale.
TomTom’s decision has been supported by Barclays investment bank. The Netherlands-based company is facing increasing pressure from Google’s maps division, who announced an alliance with Renault, Nissan, and Mitsubishi on September 18.
Speaking to Reuters of the threats of Google dominance in the car mapping industry, TomTom chief executive Harold Goddijn said: “I’m confident the car industry will get together and say what’s going on here? The car industry is notorious for not allowing single-source components into its development chain.”
Daimler Financial Services (to be known as Daimler Mobility from 2019) has also launched aftermarket hardware to connect fleet cars of any brand, setting the OEM up for expansion in telematics beyond its own Mercedes-Benz nameplate. A spokesperson for DFS said the hardware is fitted onto the car’s battery, and is completely autonomous, meaning it does not need additional cabling.
Another competitor to TomTom is Here Technologies, which provides mapping and location data for Audi, BMW, and Daimler, and is also based in the Netherlands.
Of taking primary attention of TomTom back to its mapping software, Goddijn said: “I want to focus the united company behind that goal, give the company a clearer profile. It’s true that today it’s a more bumpy ride, but that’s what we like, that’s what we’re good at.”