Toyota is set to invest $1bn in Grab Holdings, in the largest bet by a car maker in a ride-hailing provider. The deal underscores the push by the automotive industry to move from manufacturing to services. The investment which is part of Singapore-based Grab’s latest funding round, values Southeast Asia’s largest car-hailing service at $10bn, according to a familiar source. A Toyota executive will be appointed to Grab’s board, and another Toyota employee will be seconded to Grab to as an executive officer, the investment was set to take place near the end of this month, as mentioned by Toyota on Wednesday.
Car makers are expanding in vehicle sharing and ride hailing as major technology companies push onto their turf with mobility services aimed at making it less necessary for individuals to own a car. General Motors, Daimler and Honda Motor are among manufacturers that have invested in ride-hailing applications, while also developing self-driving vehicles. At Toyota, president Akio Toyoda is working to turn the 81-year-old 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 chairman of Tokyo’s biggest taxi operator. A Toyota Group company already invested an undisclosed amount in Grab last year, and the companies have worked together since August developing connected services. In March, Grab boosted its grip on Southeast Asia by buying Uber’s business in the region. Toyota has sought partnerships with tech companies in a bet that data will be a key part of the company’s future.
The co-operation with Grab will focus on services related to fleet management, such as maintenance. The two companies were exchanging information on autonomous driving, but no decision had been made on collaboration in that area, a Toyota spokeswoman said. At $10bn, Grab is still a relatively small player. Uber was valued at $62bn in a stock deal announced in May, and Didi Chuxing was valued at $56bn after a fundraising round in December. Grab has powerful backers though, including Uber, Didi and Softbank Group, the Japanese tech giant run by Masayoshi Son that has invested billions in automation and artificial intelligence companies, including GM’s Cruise autonomous-car unit. Toyota, the world’s most valuable car maker, has a market capitalisation of about $221bn and about $54bn in cash, equivalents and short-term investments. Car makers 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 transport threaten to reshape the industry. Honda also invested in Grab in a partnership aimed at expanding motorcycle-hailing operations in Southeast Asia.
Original Post on Businesslive.