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Wednesday, August 30, 2017

Vehicle Manufacturers: Toyota invests $55m in Grab, Southeast Asia’s ride-hailing service

Japan’s biggest car maker will invest an undisclosed amount in Grab, Southeast Asia’s leading ride-hailing operator, and said it will work with the company to provide services in the region. The latest deal comes a year after Toyota bought a small stake in Uber Technologies as part of alliances it is stitching together to explore 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," Shigeki Tomoyama, a senior managing officer at Toyota, said in a statement on Wednesday.

Vehicle manufacturers are working with and competing against technology companies to figure out how to make money from services to drivers as automation, electrification and on-demand transportation threaten to re-shape the current model of individual car ownership. Honda Motor has also invested in Grab, its first in a ride-sharing company, in a partnership aimed at expanding motorbike-hailing operations in Southeast Asia.

Toyota’s investment in Grab will be through the ¥6bn ($55m) Next Technology Fund set up in April by unit Toyota Tsusho for opportunities in innovative technologies, products and services.
Grab is aiming to raise $2.5bn from the latest round of funding, of which $2bn in investment has already been announced from Didi Chuxing and SoftBank Group. This will take Grab’s valuation north of $6bn, a person familiar with the matter said in July.

Connected services
Toyota will record and analyse 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."
Car makers globally are racing to place bets on which companies will emerge as the dominant players in ride-sharing. General Motors has joined forces with both Uber and Lyft, while Volvo Cars had partnered with the former and Tata Motors’s Jaguar Land Rover with the latter. Volkswagen has created a mobility services division under the Moia brand and invested $300m in ride-hailing provider Gett.

Beyond ride hailing, Toyota is also collaborating with US car-sharing company Getaround to promote the car maker’s new mobility service platform. It started testing a new suite of car-sharing apps and services this month with Servco Pacific in Honolulu, Hawaii.
The Toyota city-based car maker is boosting 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%. President Akio Toyoda has said a "paradigm shift" is underway in the automotive industry, forcing a re-evaluation of traditional business models.
The danger of falling behind became clear in May, when then-Ford Motor 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 car makers. It’s collaborating with Tokyo Century on leasing and rental cars for drivers; it is integrating its services in Singapore with CapitaLand’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% share in third-party ride hailing and 71% in private-vehicle hailing. The market is expected to increase five fold to $13.1bn by 2025, according to a study by Google and Temasek.
 
Bloomberg

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