South Korean carmaker Hyundai Motor Co. on Thursday has invested in ride-hailing firm Grab, as the companies seek to jointly create new services in Southeast Asia.
The Seoul-based auto group stated that its first direct investment in a carpooling service provider gives it a foothold in the world’s third-largest ride-hailing market after China and the US.
Hyundai and Grab did not disclose the specific amount of the investment. The investment forms a part of the Singapore-based company’s latest funding round that has so far raised more than $2.5 billion.
The newest fundraising round also included Chinese counterpart Didi Chuxing, Japan’s SoftBank Group Corp., and Toyota Tsusho Corp.
Shares of Hyundai closed up 0.8 percent higher to ₩93,000 on Thursday.
Hyundai and Grab to Jointly Develop Mobility Service
The companies announced in a joint statement that they will be working on developing a new mobility service platform.
Analyst Lee Sang-hyun stated that the deal should help boost exposure of Hyundai, while responding to the future mobility market. The South Korean group has been aiming to expand beyond its traditional business of building and selling cars.
Southeast Asia caters about 500 million people and is dominated by Japanese automakers. Hyundai has only been focused on China and the US prior the partnership.
The plan would include Hyundai’s eco-friendly vehicles, such as the Ioniq Electric models. The carmaker said that it has high expectations for the service to reestablish brand image in the region.
With this, Hyundai will gain some insight on the ways that works in the ride-sharing economy, which Grab currently dominates.
The EV-maker is also trying to catch up with its competitors in future mobility. While it does provide third-party car hailing service in the US and Europe, until now it only has been observing its peers join with ride-hailing partners.
Hyundai’s chief innovation officer Strategy and Technology YoungCho Chi said that the auto group’s eco-vehicle, combined with Grab’s expertise will create innovative services to customers.
Grab, Southeast Asia’s largest taxi-booking platform, has expanded its operations into eight in the region.
Hyundai has already teamed up with several carpooling service providers in and outside of South Korea as well. In October last year, it launched a ride-hailing platform that utilized 100 Ioniq units in Amsterdam.
It will also collaborate with self-driving startup Aurora, which is its first ever self-driving tech partnership. This marked a significant shift from the company’s standard preference for making technology itself.