AMSTERDAM (Reuters) - Shares in Dutch digital mapping company TomTom lost over a quarter of their value on Tuesday, as carmakers Renault, Nissan and Mitshubishi announced a partnership with rival Google.
TomTom shares were down 26.3 percent at 6.28 euros at 0935 GMT, which put them on track for their worst day in seven years, wiping off around 500 million euros ($584 million) in market value.
Renault, Nissan and Mitsubishi said they had closed a partnership with Google, which will supply new infotainment systems for their vehicles, including services such as Google Assistant and Google Maps.
TomTom made its name in the beginning of the 2000s with the introduction of popular personal navigation devices, but has seen the market falter in recent years with the advent of smartphones.
A large part of its 1.5 billion euro market cap is now based on hopes the company can strike deals with carmakers to supply them with maps for their built-in navigation devices. These licensing deals formed a third of TomTom’s revenue last year.
“This is a huge blow for TomTom,” InsingerGilissen analyst Jos Versteeg told Reuters.
“TomTom always said that carmakers wanted independent map suppliers. But Google has now made its way to the car. It makes TomTom’s bid to compete with Google in the car industry rather hopeless.”
TomTom reported a net loss of 204 million euros ($238 million) on 903 million euros in revenue in 2017, and it expects sales to fall to around 825 million euros this year.
TomTom could not immediately be reached for comment.
Reporting by Bart Meijer, editing by David Evans