Placing a big bet on Southeast Asia’s largest ride- hailing company, Japan based Toyota is investing $1 billion on Singapore based Grab making this the biggest ever investment by a traditional automaker in a ride- hailing firm. According to a person close to the company, the new investment values Grab at just over $10 billion.
Grab also bought out Uber’s business in Southeast Asia in a multibillion dollar deal in March. After the investment, one of the Japanese company’s executives will join Grab’s board of directors, and a Toyota employee will be an executive officer.
According to Toyota Executive Vice President Shigeki Tomoyama:
“I am delighted that we are strengthening our collaboration, which utilizes Toyota’s connected technologies.”
Toyota also intends to share technology such as software that predicts when cars need maintenance with Grab as the carmaker invests to use the money to further expand Grab’s business into food delivery service and mobile payment platform across the region. Toyota had already invested an undisclosed amount in Grab last year
Toyota had also invested an undisclosed sum in Uber in 2016 and it is not the first company to invest into ride hailing company. In 2016, General Motors (GM) invested $500 million into Lyft; Volkswagen invested $300 million into Gett, whilst Honda and Hyundai have also invested an undisclosed amount into Grab. According to a report last month from consulting firm Bain & Company, it is no longer enough just to design, manufacture and sell cars but also invest into ride hailing companies as they pose serious challenges for automakers.
According to the report which had a special focus on China:
“Car companies need to partner and invest in ride-hailing startups and other service providers to capture their share of the growing profit pool [and] to compensate for slower growth in car sales.”
Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan. It was founded by Kiichiro Toyoda in 1937, as a spinoff from his father’s company Toyota Industries to create automobiles.
Toyota Motor Corporation produces vehicles under five brands, including the Toyota brand, Hino, Lexus, Ranz, and Daihatsu. It also holds a 16.66% stake in Fuji Heavy Industries, a 5.9% stake in Isuzu, a 3.58% stake in the Yamaha Motor Company and a 0.27% stake in Tesla.
Headquartered in Singapore, Grab Taxi holdings through its subsidiaries provide location based smartphone booking and dispatching service or the taxi industry.