TomTom suspends 2025 targets as weak car demand hits sales

DIGITAL mapping specialist TomTom suspended its revenue target for 2025 and trimmed its expectations for this year on Monday (Jul 15), as weak demand for new cars weighs on its automotive location technology business.

The Amsterdam-based company said it would not meet its 600 million euro (S$878.5 million) target for 2025 location technology revenue, and that 2024 sales are expected to be at the lower end of its previously indicated range of 570 million to 610 million euros.

“A combination of downward revisions for near-term car production volumes and delays in new model introductions has resulted in a generally less predictable market environment,” chief executive Harold Goddijn said.

European new car sales were down 3 per cent year on year in May.

“There’s nothing fundamentally going wrong here, but there are some headwinds in automotive that’s affecting our revenue, in the short term,” finance chief Taco Titulaer noted.

Sales in the automotive location technology business fell by about 4 per cent to 87.3 million euros in the second quarter, making up for more than half of TomTom’s total revenue of 152.2 million euros.

Titulaer said that group sales were also affected by its new mapping platform, TomTom Orbis, taking longer than expected to come online.

The company will provide new targets for next year when it reports 2024 full-year results.

For the second quarter, it posted a loss of 5.2 million euros before interest and tax, widening from a loss of 3.6 million euros a year earlier.

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The consensus from analyst forecasts compiled by the company was a loss of four million euros.

The finance chief said that the company is also deepening and extending its collaboration with Microsoft – including adoption of TomTom Orbis across its products – with a new contract running until the end of this decade. REUTERS