Toyota to invest in Grab
Japan’s biggest carmaker pushing deeper into ride-sharing business
TOKYO: Toyota Motor Corp is pushing deeper into the ride-sharing business.
Japan’s biggest carmaker will invest an undisclosed amount in Grab, South-East Asia’s leading ride-hailing operator, and said it would work with the company to provide services in the region.
The latest deal comes a year after Toyota bought a small stake in Uber Technologies Inc as part of alliances it is stitching together to explore new revenue models.
“Through this collaboration with Grab, we would like to explore new ways of delivering secure, convenient and attractive mobility services to our fleet customers in South-East Asia,” Shigeki Tomoyama, a senior managing officer at Toyota, said in a statement.
Automobile manufacturers are working with and competing against technology companies to figure out how to make money from services to drivers as automation, electrification and on-demand transportation threaten to reshape the current model of individual car ownership.
Honda Motor Co has also invested in Grab, its first in a ride-sharing company, in a partnership aimed at expanding motorcycle-hailing operations in South-East Asia.
Toyota’s investment in Grab will be through the six billion yen (US$55mil) Next Technology Fund set up in April by unit Toyota Tsusho Corp for opportunities in innovative technologies, products and services.
Grab is aiming to raise US$2.5bil from the latest round of funding, of which it has previously announced US$2bil in investment from Didi Chuxing and SoftBank Group Corp. That will take Grab’s valuation north of US$6bil, a person familiar with the matter said in July.
Toyota would record and analyse driving patterns in 100 Grab cars in Singapore, and offer recommendations on what connected services it can provide Grab drivers, the two companies said in separate statements.
“We are confident this will benefit our driv- er partners,” Grab co-founder and CEO Anthony Tan said in one of the statements. “We look forward to exploring other ways to collaborate with Toyota in the future.”
Carmakers globally are racing to place bets on which companies will emerge as the dominant players in ride-sharing. General Motors Co has joined forces with both Uber and Lyft, while Volvo Cars had partnered with the for- mer and Tata Motors Ltd’s Jaguar Land Rover with the latter. Volkswagen AG has created a mobility services division under the Moia brand and invested US$300mil in ride-hailing provider Gett Inc.
Beyond ride hailing, Toyota is also collaborating with US car-sharing company Getaround to promote the carmaker’s new mobility service platform. It started testing a new suite of car-sharing apps and services this month with Servco Pacific Inc in Honolulu, Hawaii.
The Toyota City-based automaker is boosting spending in what it calls the “crucial fields” of artificial intelligence and other advanced technologies to as much as a quarter of its total R&D budget, from about a fifth previously. President Akio Toyoda has said a “paradigm shift” is underway in the auto industry, forcing a reevaluation of traditional business models.
The danger of falling behind became clear in May, when then-Ford Motor Co CEO Mark Fields was forced out after losing the confidence of the board and of investors that he could keep pace with the rapid pace of change in the industry.
For its part, Grab – which counts more than 1.2 million drivers across seven countries – has also been expanding partnerships beyond automakers.
It’s collaborating with Tokyo Century Corp on leasing and rental cars for drivers; it is integrating its services in Singapore with CapitaLand Ltd’s network of shopping malls, serviced apartments and offices; and, it has teamed up with the Lippo Group, the Indonesian conglomerate founded by billionaire tycoon Mochtar Riady.
In South-East Asia, Grab claims to have a 95% share in third-party ride-hailing and 71% in private vehicle hailing. The market is expected to increase five-fold to US$13.1bil by 2025, according to a study by Google and Temasek.