German car makers’ search for a tech partner

The Wall Street Journal The Wall Street Journal

HERE and Now: The Digital-Map Battleground

German car makers’ search for a tech partner highlights the growing sophistication of digital maps

Now, they’re seeking allies among the world’s biggest tech companies to help expand the venture into a platform for everything from directing self-driving cars to providing Internet-connected, digital services for the automobile.

The partners, Daimler AG , Volkswagen AG’s Audi and BMW AG , are in talks with other tech giants Amazon.com Inc., Microsoft Corp. and other car makers about joining their Here venture as strategic investors, Daimler board member Thomas Weber said on Tuesday.

The owners are looking for a partner to provide cloud-computing services for the huge amount of data created by Here and its users’ cars, he said. Connected cars can funnel information about road conditions, parking availability among other things.

Amazon didn’t reply to requests for comment. Here and Microsoft declined to comment.

A tie-up between Germany’s most prestigious luxury auto makers and some top tech firms in the U.S. is far from certain. But the talks underscore how the auto and tech industries are rapidly converging in a high-stakes game to shape the future of mobility.

The central focus is the automobile. Next to the home and office, it is where most people spend large amounts of time. Until recently, the car’s potential as a place to provide digital services and entertainment was largely untapped.

The auto industry is doing all it can to prevent the car from becoming just another smartphone on wheels, a piece of hardware that tech firms like Alphabet Inc. ’s Google and Apple Inc. can use to mine the data riches and potentially reap profits. The driving force behind the German auto makers’ acquisition of Here was the desire to retain control of their core product and remain independent of Silicon Valley.

“We’ve always said that we wanted to protect our independence,” said Mr. Weber, who is in charge of research and development at Daimler.

The three car makers acquired Berlin-based Here from Nokia Corp. last year. They previously have said that they want to bring others into the venture to expand the fledgling business into a global platform.

Here is the largest, by sales, of an emerging field of digital-map makers. Its main competitors are Google and TomTom NV, but most major auto makers are working on or investing in mapping technology.

General Motors Co. ’s investment arm, GM Ventures, took a stake in Canada-based GeoDigital International Inc. in mid-2014. Robert Bosch GmbH, one of the world’s biggest auto suppliers, teamed up with TomTom last year. German auto-parts supplier Continental AG said last month that it was considering taking a stake in Here.

These digital-map makers are coveted for reasons that go beyond the ability to spit out directions. They are developing 3-D maps that are key to self-driving cars.

While autonomous cars use cameras and radars to sense objects around them and adjust accordingly, these cars also require 3-D mapping to help them discern their exact location.

Here and its competitors also are building this 3-D mapping system to include real-time updates. Connected cars would share data about traffic, weather and road conditions. Cars traveling in winter, for example, could provide information about temperature and road conditions that could be shared through the cloud with cars coming up behind them, potentially improving road safety.

The service could also alert drivers to sudden changes on the road, such as new construction or even accidents that a static route-finding map wouldn’t contain.