Nasdaq-listed Garmin aims to grow its market share in Africa and will bolster its presence through its acquisition of Garmin Distribution Africa (GDA) and its agreement with Navteq.
Last week, Garmin said it was looking to buy out GDA, which has exclusive rights to distribute the international company's portable navigation devices in SA. The move follows an agreement between Garmin and Navteq to provide enhanced content for Garmin's range of Nuvi devices in the local market.
Ted Gartner, Garmin International's director of corporate communications, says buying out GDA will strengthen Garmin's presence in the South African market. Garmin has the largest share of the local market. Its only competition is Tom Tom, as other brands have failed to meaningfully dent its market share.
Gartner says the buyout will aid GDA in more effectively supporting its key retailers, customers, and original equipment manufacturers in the region. He adds GDA will be able to “capture more opportunities through full integration into Garmin”.
GDA CEO Richard Fearon said at the time of the announcement that the deal will aid the company in expanding further into Africa, which is an important area of growth for Garmin.
Gartner says Garmin's goal is to increase its market share throughout the African continent, but mapping has historically been a challenge.
However, the company's deal with Navteq will aid it in overcoming this obstacle, says Gartner. “We believe that our recent agreement with Navteq will help us provide the most accurate and up-to-date maps for more and more areas.”
Garmin has used Navteq maps and content in most of the countries in which it has had a presence for a decade. The agreement with Navteq will see its maps integrated with devices sold locally.
Gartner says the continent will also benefit from increased improvements to its product line. “Now that we have an agreement in place with Navteq, we hope to leverage some of their live services, like real-time traffic, weather, and more, into our connected devices for SA and elsewhere,” adds Gartner.
Garmin has already started due diligence on GDA, but the company doesn't have an exact timeframe for when the deal should be wrapped up, says Gartner. It anticipates completing the deal around the middle of the year.
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