Toyota invests an undisclosed amount in Uber’s Asian rival Grab
TOKYO—Toyota Motor Corp. is pushing deeper into the ride-booking business.
Toyota Tsusho Corp., the automaker’s trading arm, will invest an undisclosed amount in Grab, Southeast Asia’s leading ride-booking operator. Toyota said it will work with Grab to provide services in the region, a year after the carmaker bought a small stake in Uber Technologies Inc. as it explores new revenue models.
“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,” said Shigeki Tomoyama, a senior managing officer at Toyota, in a statement Wednesday.
Automobile manufacturers are working with and competing against technology companies to figure out how to make money from driver services as automation, electrification and on-demand transportation threaten to reshape the current model of individual car ownership. Honda Motor Co. has also invested in Grab, its first in a ride-sharing company, in a partnership aimed at expanding motorcycle-booking operations in Southeast Asia.
Toyota’s investment in Grab will be through the six billion yen ($70 million) Next Technology Fund set up in April by Toyota Tsusho for opportunities in innovative technologies, products and services.
Grab is aiming to raise $2.5 billion from the latest round of funding, of which it has previously announced $2 billion in investment from Didi Chuxing and SoftBank Group Corp. That will take Grab’s valuation north of $6 billion, a person familiar with the matter said in July.
Toyota will record and analyze driving patterns in 100 Grab cars in Singapore, and offer recommendations on what connected services it can provide Grab drivers, the two companies said in separate statements.
“We are confident this will benefit our driver partners,” Grab co-founder and CEO Anthony Tan said in one of the statements. “We look forward to exploring other ways to collaborate with Toyota in the future.”
Toyota’s shares climbed 1 per cent to 6,151 yen on Wednesday, the biggest gain in two weeks. The benchmark Topix index advanced 0.6 per cent.
Carmakers globally are racing to place bets on which companies will emerge as the dominant players in ride-booking. General Motors Co. has joined forces with both Uber and Lyft, while Volvo Cars partnered with the former and Tata Motors Ltd.’s Jaguar Land Rover with the latter. Volkswagen AG has created a mobility services division under the Moia brand and invested $300 million in ride-booking provider Gett Inc.
Beyond ride booking, Toyota is also collaborating with U.S. car-sharing company Getaround to promote the carmaker’s new mobility service platform. It started testing a new suite of car-sharing apps and services this month with Servco Pacific Inc. in Honolulu, Hawaii.
The Toyota City-based automaker is boosting spending in what it calls the “crucial fields” of artificial intelligence and other advanced technologies to as much as a quarter of its total R&D budget, from about a fifth previously. President Akio Toyoda has said a “paradigm shift” is underway in the auto industry, forcing a re-evaluation of traditional business models.
The danger of falling behind became clear in May, when then-Ford Motor Co. CEO Mark Fields was forced out after losing the confidence of the board and of investors that he could keep pace with the rapid pace of change in the industry.
For its part, Grab — which counts more than 1.2 million drivers across seven countries — has also been expanding partnerships beyond automakers. It’s collaborating with Tokyo Century Corp. on leasing and renting cars for drivers; it is integrating its services in Singapore with CapitaLand Ltd.’s network of shopping malls, serviced apartments and offices; and it has teamed up with the Lippo Group, the Indonesian conglomerate founded by billionaire tycoon Mochtar Riady.
In Southeast Asia, Grab claims to have a 95-per-cent share in third-party ride booking and 71 per cent in private vehicle booking. The market is expected to increase fivefold to $13.1 billion by 2025, according to a study by Google and Temasek.