Japan’s Toyota Motor is investing $1 billion into Southeast Asian ride-sharing app Grab, the Singapore-based company said Wednesday, valuing Southeast Asia’s largest car-hailing service at just over $10 billion.
The world’s most profitable car manufacturer is making the largest ever bet by an automaker on ride-hailing as it embraces new businesses that threaten to disrupt the industry’s traditional model of vehicle ownership.
The recent investment by the automaker follows a same one last year through Toyota’s trading arm in the company that forced Uber Technologies Inc. out of the region.
The investment will see the two companies expand on their existing partnership and explore new mobility strategies across the region, Grab said.
Additionally, an executive of the Japanese manufacturer will be appointed to Grab’s board of directors while a Toyota team member will become an executive officer in the ride-sharing company.
“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.
As for Toyota, its outlay in Grab is double the size of General Motors Co.’s investment in Lyft Inc. in 2016, underscoring the sense of urgency Chief Executive Officer Akio Toyoda has in shifting the company toward mobility services.
The 81-year-old automaker, founded by Toyoda’s grandfather, is preparing for intensifying competition from peers as well as technology giants as the industry transforms.
“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.
Carmakers and technology companies alike are working toward a future where autonomous robo-taxis will lessen the need for individual car ownership.
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.
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