Companies in automotive industry are evolving towards data-based business model either by merging with the existing companies or by acquiring the companies those are excel in data capability. Suppliers and manufacturers are planning to be a part of an initiative called the automotive service provider and move forward from conventional way of doing business. Suppliers and automakers consider telematics in automotive can shift the automaker from conventional way of doing business to more service oriented.
Bridgestone acquired telematics business of TomTom for €910 million. This acquisition will provide the leading tire manufacturer to create an analytics solution for the connected vehicle market. This transaction will allow Bridgestone to strengthen its portfolio for digital business.
With the increase in competition in the industry, merger and acquisition is the smartest move by companies. In addition, to be a part of autonomous, connected, electric and shared services (ACES) architecture, companies are required to make such moves to gain major market share.
TomTom is the top telematics solution provider in Europe and ranked third globally. TomTom business will also get the advantage of Bridgestone large customer base and strong tie-ups with the OEM’s around the world. At present, TomTom has nearly 50,000 customers comprised of fleet leasing companies and commercial fleet. In addition, Thus, Bridgestone can pitch its digital solutions such as Fleetpulse, Telematics, Mobox, and Bridgestone Connect and Tires to TomTom existing user base. Furthermore, with the acquisition, Bridgestone can access millions of data points from TomTom telematics solutions such as driving patterns, road conditions, and others. These insights can help the Bridgestone to develop reliable and robust solutions to enhance driver experience. This acquisition provide Bridgestone a chance to become the number one provider of telematics with respect to installed base. This acquisition puts Bridgestone in competition with Continental, Michelin, Goodyear, Pirelli, and others.
In coming years, the market for autonomous driving and autonomous driving assistance system is expected to expand. TomTom with this acquisition is planning to reposition itself as the software supplier for service-oriented business and offering a solution with respect to licensing or subscription-based business model. The company is also developing a vendor ecosystem to collaborate and develop new services and products of the market requirement. As the market is witnessing a lot of new competitors entering the market, it will be difficult for TomTom to offer the same solution in navigation. The company needs to scale its current offering and also develop an innovation ecosystem for smart offerings.