Published: Wed, June 13, 2018
Money | By Ralph Mccoy

Toyota investing $1 billion in ride-hailing company Grab

Toyota investing $1 billion in ride-hailing company Grab

The US$1 billion sum is the largest-ever investment globally by an automaker in the ride-hailing sector.

General Motors Co has invested in USA ride services firm Lyft, whose rival Uber Technologies Inc [UBER.UL] is also backed by Toyota. The investment is set to take place around the end of this month, Toyota said.

"We are honored to be supported by industry leaders including Toyota, Uber, Didi and SoftBank", Ming Maa, president of Grab, said.

Japan's SoftBank Group Corp last month announced it would invest $2.25 billion in the Cruise autonomous vehicle unit of General Motors Co, while Fiat Chrysler Automobiles NV and Jaguar Land Rover Automotive PLC have agreed to supply vehicles for Alphabet Inc's self-driving auto subsidiary Waymo.

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 a bet that data will be a key part of its future.

More from The $1.4 Trillion U.S. In 2016, General Motors invested US$500 million in Lyft, and Volkswagen also poured US$300 million into Israeli taxi app Gett in the same year.

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Data collected from the recorders could also help Toyota in its own development of next-generation mobility services, including a self-driving electric vehicle it plans to develop for companies to use for tasks such as ride-hailing, package delivery and mobile shops. The two companies are exchanging information on autonomous driving, but no decision has been made on collaboration in that area, a Toyota spokeswoman said. The automaker is discussing which executive to send to Grab's board, and is considering dispatching "a number" of Toyota employees to its partner, the spokeswoman said.

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.

To be sure, no partnership in the vehicle industry is a guaranteed success. Toyota's relationship with Tesla unraveled after four years amid culture clashes and recalls. The deal values Grab at $10 billion, a source close to the company told TechCrunch. This time, the automaker is lead investor in a financing round launched after Grab acquired Uber's operations in Southeast Asia, a region of 640 million people.

Other Grab investors include Japan's Honda Motor Co Ltd, South Korea's Hyundai Motor Co and Chinese ride-hailing firm Didi Chuxing.

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. "It's a kind of r&d".

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