Published: Wed, June 13, 2018
Markets | By Otis Pena

Toyota investing $1 billion in Grab

Toyota investing $1 billion in Grab

The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo vehicle purchases by connecting them with drivers.

Grab operates across Asia and agreed to acquire Uber's Southeast Asian business earlier this year.

On April 8, Uber's rideshare service disappeared and commuters in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam switched over to the Grab app.

Toyota is investing a further $US1 billion in ride-sharing giant Grab.

Other automakers have put money into the ride-hailing industry.

The investment by Toyota, which is the largest ever by an automotive manufacturer in the global ride-hailing sector, will allow Grab to expand its range of O2O services like GrabFood and GrabPay, according to a company statement.

The data could also help Toyota develop its own next-generation mobility services, including a self-driving electric vehicle aimed at companies for use in tasks such as ride hailing, package delivery and mobile shops.

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A man walks past a Grab office in Singapore March 26, 2018.

Toyota has installed its driving recorder devices in some vehicles operated by Grab, using the collected data stored in its mobility services platform to analyse driving patterns and develop vehicle services. This strong partnership will enable us to become the one-stop mobility platform in Southeast Asia.

Toyota will place one of its executives on Grab's board, and a second Toyota team member will serve as an executive officer at the company, which Toyota called the "partner of choice for ride-hailing in the region".

The automaker on Wednesday said by deepening the partnership, it hoped to achieve connectivity for Grab's rental auto fleet across Southeast Asia and offer financing, insurance and maintenance services to drivers based on data collected on its platform. Since then, Grab has boosted its grip on Southeast Asia by buying Uber's business in the region. The company's app has been downloaded onto over 100 million mobile devices and the firm logs over 6 million rides per day.

Earlier this year, Uber sold its regional operations to Grab for a 27.5 per cent stake in the Singapore-headquartered firm, ending a bruising battle between the two for regional dominance. General Motors Co. and Honda Motor Co. are among carmakers that have invested in ride-hailing applications.

Founded in 2012 by Malaysian Harvard Business School graduates Anthony Tan and Tan Hooi Ling, Grab now dominates the third-party and private vehicle hailing markets across Singapore, Indonesia, Philippines, Malaysia, Thailand, Vietnam and Myanmar.

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