Mercedes Benz Group AG (OTC: MBGAF) announced on Wednesday a long-term strategic partnership with Alphabet Inc.'s (NASDAQ:GOOG) Google to build its own branded navigation experience in a bid to compete with Tesla Inc. (NASDAQ:TSLA), among others.

What Happened: These features, within Mercedes-Benz Operating System will enable a better navigation experience and will be used to enable assisted driving features such as automatic speed adjustments before intersections, roundabouts, or curves, according to a statement released by Mercedes-Benz.

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In addition, the YouTube app shall also be incorporated into Mercedes-Benz's infotainment system. The companies have also agreed to explore further collaboration, Mercedes said in a statement.

"In addition to enabling Mercedes-Benz to design a customized navigation interface, we'll provide our AI and data capabilities to accelerate their sustainability efforts, advance autonomous driving, and create an enhanced customer experience," Sundar Pichai, Chief Executive Officer of Google and Alphabet, added.

Why It's Important: The Mercedes-Benz-Google partnership is likely to be a win-win proposition for both companies.

For Google, it could be a win against Apple Inc. (NASDAQ:AAPL), which at its 2022 Annual Worldwide Developer Conference said that it was making key changes to its CarPlay software. The tech giant's this software is licensed to automakers.

The German legacy automaker could use tools and technology available to it under the partnership to improve its assisted-driving features, which is a key component of a modern-day auto.

Electric vehicle giant Telsa's equivalent of an assisted driving feature is called Autopilot and the Elon Musk-led company is currently doing advanced beta-testing of full self-driving software, which would allow more autonomy than assisted driving.

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