A number of high-end vehicle manufacturers are reportedly joining forces in a bid to acquire a majority stake in Nokia's mapping business Here, with the help of Chinese search company Baidu.
The Wall Street Journal on Tuesday reported that German automakers Audi, BMW, and Mercedes-Benz have formed a consortium to buy Nokia's Here unit in a defensive move designed to prevent Silicon Valley companies from controlling the future of autonomous cars.
A person familiar with the joint bid told the WSJ that the auto industry's biggest fear is the prospect of Google developing an Android-like 'free' operating system for self-driving cars - of which maps, not surprisingly, would be a crucial component.
Google has made inroads into the vehicle mapping market through its Open Automotive Alliance, and counts Audi as a member - one of the three car makers thought to be bidding for Here.
According to the WSJ, the consortium's current proposal would see Nokia retain a minority stake in Here, while the three German car makers would take a majority stake. Baidu would also have a minority stake in the venture.
Nokia has long-established ties with all four reported members of the consortium and claimed last year that 80 percent of all new cars shipped in 2014 used Here maps for in-vehicle navigation.
Baidu uses Here for all its mapping capabilities outside of China and struck a deal with Nokia last year to give China's 100 million "globetrotters" location services through Baidu when travelling abroad.
The bid for Nokia's Here unit, however, would see Baidu limited to using Here technology within China.
Over the past three years Nokia has developed its mapping capabilities for autonomous vehicles through its sensor-laden True fleet of cars. So far it has created 3D imagery covering two million kilometers of road across six continents. According to a recent Wired report, Nokia has about 200 hundred True cars, all kitted out with GPS, cameras, and lidar cameras for measuring distances.
The WSJ report also claims that the luxury car makers have asked German chancellor Angela Merkel to encourage the Finnish government to back the proposal.
Nokia said it was open to selling off Here when it announced its proposed takeover of Alcatel-Lucent. The company initially questioned the value of Here after selling its devices and services unit to Microsoft, since Here was seen as strategically valuable to its handset business.
Besides Here maps, Nokia also licenses its Here real-time traffic data service to the likes of Ford, Honda, and Mazda. It recently acquired US firm Medio to give it real-time predictive analytics, and Desti, which gave it artificial intelligence and natural language processing technology to recommend destinations to travellers.
Numerous companies are said to have been approached about the sale of Here, including Facebook and Uber, though the vehicle makers were said to be nervous about the prospect of Here being owned by either of these US companies.
The car consortium values Here at much more than the $2bn Nokia is said to be seeking for the unit, according to the WSJ.
Audi, BMW, and Mercedes-Benz declined to comment.