Amazon is reportedly in talks with a consortium of German carmakers to buy a stake in digital mapping company HERE.
While global automakers have shown interest in buying mapping services companies in the past to meet the requirements of their self-driving car projects, Amazon’s move is possibly the first in the e-commerce industry.
In August last year, a consortium consisting of BMW, Audi and Mercedes agreed to buy Nokia’s mapping business for $2.8bn for their self-driving car project needs.
After the acquisition, the consortium started looking out for "potential partners", particularly from the automotive industry, to buy stake in mapping firm. For them, Amazon could turn out to be a strategic partner.
"Amazon would take a stake as part of a broader deal to lock them in as a provider of cloud computing services," a source familiar with the talks told Reuters.
The consortium has a need for cloud computing services in order to ensure maps provide live updates on traffic and road conditions from data captured from sensors on a significant number of Mercedes, BMW and Audi cars.
Amazon is one the cloud computing providers with which the consortium has been negotiating for a while now, a source told Reuters.
Acquiring a stake in HERE could be a strategic move for Amazon, as it is looking to launch one- and two-hour delivery services in some of the big cities in the US and Europe in a bid to compete with its competitors in providing fast services.
However, to deliver products ordered by the customers in two hours, Amazon needs accurate, real-time maps like those provided by HERE.
Self-driving cars mainly depend on intelligent mapping systems that can carry out important tasks such as finding out a route for the destinations.
Having more partners in mapping services will be a cost effective solution for the consortium, as more data about traffic information can be included in the maps by collections data from vehicles of the partners.
BMW said: "The new owners Audi, Daimler and BMW have said from the start that they are open for new partners to join. We have noticed that there is lots of interest not only from potential partners from within the automotive industry, but also from other sectors."
Renault and automotive supplier Continental are keen to become partners in the consortium. Continental will finalise its decision to acquire a stake in HERE within the next few months.
Besides, Ford is also keen to buy a stake in the HERE consortium, a third auto industry source told the news agency.
A spokesman for Ford said: "We have been and will continue working with many companies and discussing a variety of subjects related to our Ford Smart Mobility plan. We keep these discussions private for obvious competitive reasons and we don’t comment on speculation."
According to analysts at Exane BNP Paribas, self-driving and connected car services market is estimated to grow to $50bn.
