Automakers 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 Co., Daimler AG and Honda Motor Co. are among manufacturers that are investing in ride-hailing applications and developing self-driving vehicles.
Toyota Motor Corporation is now making its largest bet to date on ride hailing with a $1 billion investment in Singapore’s Grab Holdings Inc. The Japanese auto manufacturer’s investment values Grab, Southeast Asia’s largest car-hailing service, at just over $10 billion. 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 aims to allow Grab to expand its range of online-to-offline services such as food delivery and electronic payments in the region.
“As a global leader in the automotive industry, Toyota’s investment in Grab is based on their conviction in our leadership in driving the adoption of new mobility solutions and expanding [online-to-offline] mobile services, such as GrabFood and GrabPay, in the region,” Ming Maa, president of Grab, said in a statement.
According to Grab, the investment will allow Toyota to further integrate its services such as user-based insurance and predictive maintenance with the Singapore-based company. That could act as an incentive for drivers to drive more safely to enjoy lower insurance premiums.
“Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia,” Shigeki Tomoyama, Toyota executive vice president, said in a statement included in the announcement.
“This is a good decision — Toyota should not be late in this area,” said Tatsuo Yoshida, an equities analyst at Sawakami Asset Management Inc. 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 auto giant his grandfather founded into a mobility-services provider. The company has also backed Uber Technologies Inc. and invested in Japan Taxi, an Uber rival run by the chairman of Tokyo’s biggest taxi operator.