nokia-here-2015

High-precision digital maps will be important for autonomous cars (Photo: Nokia)

A consortium of German carmakers is buying Nokia's digital mapping business for 2.8 billion euros.

Audi, BMW and Daimler confirmed in a press release that they will jointly acquire Nokia HERE and will run the mapping company as an independent entity that will provide a platform open to all customers. The three, which will hold equal stakes in the company, said they wouldn't interfere in the operational business.

"“High-precision digital maps are a crucial component of the mobility of the future," Daimler CEO Dieter Zetsche said. "With the joint acquisition of HERE, we want to secure the independence of this central service for all vehicle manufacturers, suppliers and customers in other industries.”

The three premium carmakers said HERE, which is used in roughly 80 pc of all automotive navigation systems, is a key component of the next generation of mobility and location-based services. Extremely precise digital maps are essential for future autonomous vehicles, they added.

"HERE will play a key role in the digital revolution of mobility, combining high definition maps and data from vehicles to make travel safe and easier to everyone," BMW CEO Harald Krueger said.

HERE President Sean Fernback outlined in a press statement the company's ambitions to speed up its growth. "The new ownership structure of HERE will allow us to accelerate our strategy, further scale our business and fulfil our intent to become the leading location cloud company across industries," he said.

The German carmakers' acquisition of HERE, which provides mapping and location intelligence for nearly 200 countries in more than 50 languages, underlines how the auto industry's core competencies are evolving as electronics, computer hardware and software and other non-traditional automotive technologies become more important.

For Nokia, a Finnish technology group that was once the leading maker of mobile phones, the divestment marks the next stage of a transformation that will allow it to focus almost exclusively on its networks business. Nokia sold most of its mobile phone operations to Microsoft in 2014 and earlier this year announced that it would be merging with Alcatel-Lucent, a Franco-US telecommunications equipment group.

Once that merger is complete, said Nokia CEO Rajeev Suri, "Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies."

The German car consortium was one of many bidders for Nokia HERE. Others included, Chinese internet company Alibaba, ride-sharing company Uber, and several automotive supplier groups.

HERE posted an operating profit of 31 million euros in 2014 on sales of 971 million euros. At the end of June 2015 it employed 6,454 people.

The acquisition is subject to regulatory approvals. It is expected to close in the first quarter of 2016.

-By Arjen Bongard