Daimler CEO says digital mapping consortium in expansion talks

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Daimler’s Chief Executive (DAIGn.DE) told Reuters that a German auto maker consortium which controls the HERE digital mapping business is in talks with potential new members.

In August last year, German carmakers BMW (BMWG.DE), Audi (VOWG_p.DE) and Mercedes (DAIGn.DE), agreed to pay 2.5 billion euros ($2.8 billion) to buy Nokia’s high definition maps business (NOKIA.HE), in a step to develop self-driving cars.

The deal closed in December and the German auto makers Mercedes-Benz, Audi and BMW started negotiations with new potential members, Zetsche said in an interview embargoed for Sunday.

“If there are individual companies that are already raising their finger, then this is fast and pleasing. I do not think it will take very long until the first company gives a binding commitment to join,” Zetsche said at a Mercedes-Benz driving event in Portugal.

The HERE mapping business needs additional investments to make it viable for use as a navigation tool for self-driving cars. Having more carmakers join the consortium will potentially spread the cost across more members and could improve the volume of live traffic information being fed to the map from vehicles on the road.

Last week carmakers Renault-Nissan (RENA.PA), and supplier Continental (CONG.DE) said they were considering taking a stake in the HERE mapping consortium.

Intelligent mapping systems like HERE’s are the basis on which self-driving cars, linked to wireless networks, can perform functions such as recalculating a route to the nearest electric charging station or around a traffic jam or accident.

Talks with third parties only started in the past two months because the consortium waited until the deal closed before talking to other partners, Zetsche said. Having only three members in the consortium made negotiations to close the deal simpler, Zetsche said.

“Interest will not only be limited to Renault-Nissan and Continental,” Zetsche added.

Self-driving and connected car services could become a $50 billion market, analysts at Exane BNP Paribas have estimated. Germany’s carmakers decided to club together to bid for the asset to accelerate plans for self-driving cars after Internet rival Alphabet (GOOGL.O) unveiled a prototype autonomous vehicle.

Now Daimler is ready to expand the business which will form the basis for interactive maps which include live data on traffic flows gathered by thousands of sensors on BMW, Audi and Mercedes-Benz vehicles.

“It is clear that we want to aggressively expand this platform, we will make the means available to do this,” Zetsche said.

There are talks with the telecommunications industry about how to spread the availability of ultra-high-speed 5G networks, Zetsche said.

Mercedes-Benz, BMW and Audi are also evaluating whether their cooperation on maps can be broadened, Zetsche said.

“When it concerns navigation, we have broadly identical needs. Setting communication standards, which language we should speak and what signals we send, we can decide together,” Zetsche said.

Daimler is on the lookout for software and information technology specialists to help develop its digital businesses, including through further takeovers.

“To get access to the right resources we will continue making acquisitions,” Zetsche said, explaining that there are currently no live talks for a deal. Daimler has already bought the MyTaxi App and any further deals will be about buying smaller companies, Zetsche said.

(Reporting by Ilona Wissenbach; Writing by Edward Taylor; Editing by Stephen Powell)