Toyota out to Grab a $1bn share in ride app
Appoints executive to board
TOYOTA is making its largest bet to date on ride hailing with a $1 billion (R13.2bn) investment in Singapore’s Grab Holdings.
The Japanese vehicle manufacturer’s investment values Grab, Southeast Asia’s largest car-hailing service, at just over $10 billion, according to a person familiar with the transaction. A Toyota executive will be appointed to Grab’s board, and another Toyota employee will be seconded to Grab as an executive officer, the carmaker said yesterday.
Carmakers are taking steps toward a future where mobility services will make individual car ownership less necessary, while trying to fend off technology giants targeting the same market.
General Motors, Daimler and Honda are among manufacturers investing in ride-hailing applications and developing self-driving vehicles.
“This is a good decision – Toyota should not be late in this area,” said Tatsuo Yoshida, an equities analyst at Sawakami Asset Management in Tokyo. “Ride sharing is coming. For car companies, this is a painful reality, but it can be a business opportunity if they understand it correctly.”
Toyota president Akio Toyoda is working to turn the 81-year-old car giant his grandfather founded into a mobility-services provider. The company has also backed Uber Technologies and invested in Japan Taxi, an Uber rival run by the chairperson of Tokyo’s biggest taxi operator.
Toyota and Grab representatives declined to comment on Grab’s valuation or the size of Toyota’s stake. The investment is set to take place around the end of this month, Toyota said.
Toyota’s trading arm, Toyota Tsusho, already invested an undisclosed amount in Grab last year, and the companies have worked together since August developing connected services. Toyota has installed its data recorders in Grab-operated rental cars to collect driving data – a similar strategy it has employed with Japan Taxi.
Toyota, the world’s most valuable carmaker with a market capitalisation of about $221 billion, has sought partnerships with tech companies in a bet that data will be a key part of its future. The company had about $54 billion in cash, equivalents and short-term investments as of March 31.
The co-operation with Grab will focus on services related to fleet management, such as maintenance. The two companies are exchanging information on autonomous driving. – Bloomberg