Toyota investing $1 billion in ride-hailing company Grab

Toyota investing $1 billion in ride-hailing company Grab

Grab recently took over Uber's Southeast Asia operations after years of competition, and is now going head-to-head in Indonesia with rival Go-jek.

Toyota Motor Corp. will invest $1 billion in Southeast Asian ride-hailing firm Grab Inc., reflecting Chief Executive Akio Toyoda's view that the company needs to expand beyond making cars to survive. Toyota has installed its data recorders in Grab-operated rental cars to collect driving data - a similar strategy it has employed with Japan Taxi.

One Toyota executive will be appointed to Grab's board of directors and a dedicated Toyota team member will be seconded to Grab as an executive officer.

General Motors Co has invested in USA ride services firm Lyft, whose rival Uber Technologies Inc [UBER.UL] is also backed by Toyota. The six-year-old company faces fierce competition from Indonesian rival Go-Jek, which is expanding ride-hailing and other services in Southeast Asia.

It is also the latest collaboration between a global vehicle maker and a technology firm as ride-hailing companies dominate the fast-growing field of mobility services, raising the risk of a future where auto ownership declines in favour of such services.

Besides the namesake app that we're familiar with, Grab operates online-to-offline (O2O) mobile platforms in transportation, food and package delivery, mobile payments and financial services in 217 cities across eight ASEAN countries.

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When Grab claimed the Softbank investment of $US250 million in 2014, it was at the time the largest made into a South East Asian internet company on public record.

"A board seat nearly guarantees that Grab will buy cars from Toyota", said Steve Man, an analyst at Bloomberg Intelligence in Hong Kong. The two companies will look for future collaborations aimed to achieve more-efficient ride-hailing businesses and for developing future mobility service solutions and MaaS vehicles.

This will be done through both companies' work on the Toyota Mobility Service Platform (MSPF) - such as user-based insurance, financing program and predictive maintenance. Toyota said the Singapore-based startup has big growth potential in a region that is home to around 600 million people. It invested an undisclosed sum in the U.S. company in 2016.

Toyota, the world's most valuable carmaker with a market capitalization of about $221 billion, has sought partnerships with tech companies in a bet that data will be a key part of its future.

"Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", Toyota executive Shigeki Tomoyama said in a statement.

Ma estimated that Grab will reach over US$1 billion in revenue this year, as its users exceed 100 million in the region.

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