The Japanese multinational automotive company, Toyota Motor Corp., will invest in Southeast Asia’s leading ride-hailing company, Grab, through its trading arm to offer its services throughout the region and expand its Toyota Mobility Service Platform.
The Japan’s biggest car maker is the latest participant in Grab’s current financing round that is expected to raise $2.5 billion, which is led by Chinese peer Didi Chuxing and Japan’s Softbank Group Corp, a figure that would make it Southeast Asia’s largest ever venture financing. Today, Grab unveiled that it has received funding as part of a strategic investment by Toyota Tsusho’s Next Technology Fund, a general trading firm within Japanese automotive giant Toyota.
However, the total amount of Toyota Tsusho Corp.’s latest investment remains undisclosed.
“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 Southeast Asia,” Shigeki Tomoyama, a senior managing officer at Toyota, said in a statement.
This deal comes a year after Toyota bought a small stake in Grab’s main rival in Asia, Uber Technologies Inc., as part of the partnership it is joining together to dive into new revenue models.
The investment also indicates the automaker’s urge to grow, as a lot of major companies seek growth in Southeast Asia’s huge developing economies with young, tech-savvy demographics.
“Toyota is a global leader in the automotive sector and one of the most popular brands with drivers on our platform right across Southeast Asia, and we’re excited to work together to explore how we can extend more and better connected car services to our driver’s partners,” said Anthony Tan, cofounder and CEO of Grab Inc.
Automobile makers are working with and competing against technology firms to determine how to build money from services to car drivers as automation, electrical, and on-demand transportation threaten to redesign the current model of individual car ownership.
Toyota is joining forces with U.S. car-sharing firm Getaround to promote the automaker’s new mobility service platform. It began testing a new suite of car-sharing apps and services this month with Servco Pacific in Honolulu, Hawaii.
The Toyota city-based automaker is increasing spending in what it calls the “crucial fields” of artificial intelligence and other advanced technologies to as much as 25% of its total research and development budget, from about 20%.
According to a person with knowledge of the matter, Grab’s $2.5 billion fund raising would value it at $6 billion.
In Southeast Asia, Grab claims to have a 95% share in third-party ride hailing and 71% of private-vehicle hailing. The market is expected to rise fivefold to $13.1 billion by 2025, according to a study.
It operates private car, motorcycle, taxi and carpooling services across seven countries with $1.2 million drivers. It recently participated in a social media campaign with rival Uber to promote reducing of traffic emissions.
Toyota and Grab Services
Grab will share data on driving patterns from 100 Toyota cars in its fleet with its partner companies. Then, Toyota will have its TransLog device installed in 100 rental cars operated by Grab, enabling Toyota to record and analyze the shared data and use them to give recommendations on what connected services it can provide, such as user-based insurance, car financing, and predictive maintenance, to Grab drivers, both companies said in a separate statement.
“We are confident this will benefit our driver partners,” Tan said.
“We look forward to exploring other ways to collaborate with Toyota in the future.”
Toyota’s partnership deal with Grab will also include Aioi Nissay Dowa Insurance, according to the startup company.
A lot of automakers around the globe are setting their own bets on which companies will surface as the prevailing players in ride-sharing. For instance, General Motors has partnered with both Uber and Lyft, Volvo Cars had also joined forces with Lyft, which also includes Tata Motor’s Jaguar Land Rover as another investor of the ride-hailing firm.
Honda Motor Co. has also invested in Grab, and is working with the company to widen motorcycle-hailing operations in Southeast Asia. Volkswagen has developed a mobility services division under the Moia brand and invested $300 million in ride- hailing provider Gett.
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