Toyota investing $1 billion in ride-hailing company Grab

Daniel Fowler
June 13, 2018

The Japanese giant's investment values Grab, South-east Asia's largest car-hailing service, at just over US$10 billion, Bloomberg reported.

The world's most profitable vehicle manufacturer is investing $1 billion in Singapore's Grab Holdings Inc., valuing Southeast Asia's largest car-hailing service at just more than $10 billion, according to a person familiar with the transaction. Toyota has installed its data recorders in Grab-operated rental cars to collect driving data - a strategy similar to the one it has employed at Japan Taxi.

In return for its capital, Toyota will also get a board seat and the opportunity to place an executive within Grab's team. The US$1 billion sum is the largest-ever investment globally by an automaker in the ride-hailing sector.

Carmakers and technology companies alike are working toward a future where autonomous robotaxis will lessen the need for individual auto ownership.

"I am delighted that we are strengthening our collaboration, which utilizes Toyota's connected technologies", Toyota Executive Vice President Shigeki Tomoyama said in a statement.

Specifically, it aims to let Grab expand its range of online-to-offline services such as food delivery and electronic payments in the region.

But Toyota had also, in 2016, put money in Grab rival Uber - whose South-east Asian operations were acquired by Grab in March - in a strategic investment.

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"A board seat nearly guarantees that Grab will buy cars from Toyota", said Steve Man, an analyst at Bloomberg Intelligence in Hong Kong.

This will be done through both companies' work on the Toyota Mobility Service Platform (MSPF) - such as user-based insurance, financing program and predictive maintenance. The two companies will look for future collaborations aimed to achieve more-efficient ride-hailing businesses and for developing future mobility service solutions and MaaS vehicles.

Toyota, the world's most valuable carmaker with a market capitalization of about $221 billion, has sought partnerships with a pantheon of tech companies including Amazon Inc. and Apple Inc.in a bet that data will be a key part of its future. This strong partnership will enable us to become the one-stop mobility platform in Southeast Asia.

Until March this year, Grab was Uber's biggest competitor in the Asian region.

"Together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", he said. It also has Southeast Asia's biggest land transportation fleet, delivering over six million rides per day.

Last month, Indonesian ride-hailing and online payment firm Go-Jek said it would enter Vietnam, Thailand, Singapore and the Philippines in the next few months, investing $500 million in its global push.

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