INTERNATIONAL - Dutch navigation firm TomTom said on Tuesday it had lost a contract with carmaker Volvo, overshadowing a forecast-beating earnings report to knock shares as much as 9 percent lower.
The company said the contract to provide location and navigation services to Volvo, which was announced in 2016, had been ended before it was due to go into force in 2019.
That fed into fears of critics who said a deal Google made last month with Renault, another TomTom customer, meant the company risked being relegated to third place in its main market, with lower margins.
Volvo could not immediately be reached for comment on the contract. ING analysts said in a trading note that they believe the Swedish carmaker had switched to Google, rather than the current leading player in the navigation market, HERE.
“Now that Google is making inroads, the mapping business has become a three-player market with TomTom, HERE and Google, which is clearly less attractive for TomTom than the two-player market it was before,” they said.