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Highlights:
- Lowered Sales Forecast: TomTom anticipates annual sales from its location technology unit to fall at the lower end of €490-520 million due to weak demand in the global automotive market.
- Impact of Declining Car Sales: The significant drop in new car sales, particularly an 18.3% decline in the EU in August, has heavily affected TomTom’s revenue.
- Strategic Focus on Orbis: TomTom is shifting its focus to its new mapping platform, Orbis, to counter the downturn in its consumer division as free mobile apps like Waze continue to grow.
TomTom, the leading global provider of location technology and navigation solutions, has revised its revenue expectations for 2024, citing declining demand for new cars in the automotive industry. The company announced that sales from its location technology unit are expected to reach the lower end of the forecasted range of €490-520 million ($536-569 million). This adjustment comes as the global decline in car sales, particularly in Europe, continues to weigh heavily on TomTom’s performance.
The company has maintained its full-year revenue guidance between €570-610 million but has indicated that results will likely fall at the lower end of this range. A significant portion of TomTom’s revenue stems from its automotive location technology business, which has been negatively impacted by the slowdown in car sales. New car sales in the European Union dropped by 18.3% in August, further deepening the challenges for the Dutch firm.
In response to these market conditions, TomTom has shifted its focus towards its new Orbis mapping platform. This strategic pivot is aimed at compensating for the downturn in its consumer division, where the rise of free mobile apps like Waze has eroded market share and put pressure on revenues.
Despite the challenging environment, TomTom managed to narrow its year-over-year losses in the third quarter. However, revenue during the quarter fell short of expectations, totaling €140.7 million. The company remains optimistic about the long-term potential of its Orbis platform, which is designed to meet the growing demand for advanced mapping and location technology, particularly in smart cities and autonomous driving sectors.
TomTom continues to focus on innovation as it navigates the evolving automotive and consumer landscape, working towards bolstering its competitive edge through its cutting-edge mapping technologies.
