Published: Fri, June 15, 2018
Markets | By Noel Gibbs

Toyota to Buy $1 Billion Grab Stake in Push to Ride Hailing

Toyota to Buy $1 Billion Grab Stake in Push to Ride Hailing

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.

The fresh funds will allow Grab to further expand services such as its food delivery service GrabFood and mobile payments GrabPay to more countries across the region.

Toyota has installed its driving recorder devices in some vehicles operated by Grab, using the collected data stored in its mobility services platform to analyze driving patterns and develop vehicle services.

It also said Toyota will appoint an executive to Grab's board of directors while a dedicated Toyota team member will be seconded to Grab as an executive officer.

Vehicle companies need to partner and invest in ride-hailing startups and other service providers "to capture their share of the growing profit pool [and] to compensate for slower growth in vehicle sales", said the report, which focused on China, the world's biggest auto market.

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Toyota's standalone investment today puts the company's value around $US7 billion.

Both companies have already begun collaboration in the field of connected vehicles by, for example, providing driving-data-based automotive insurance for Grab's rental fleet in Singapore through local insurance companies.

Through this new agreement, Toyota and Grab plan to shift into full-scale implementation of services they have been developing to customers.

The deal will see Toyota and Grab strengthen and expand an existing partnership in the area of connected cars, and drive the adoption of new mobility solutions in South-east Asia, Grab said in a press release.

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.

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This is not Toyota's first foray into ride-hailing. That strategic investment was the beginning of Toyota Motors partnership with Grab. Toyota is an incredible company that has done so much for the world.

From its beginnings as a taxi-booking app - its original name is GrabTaxi - the company is morphing into an online platform for connecting users and offline services, and is venturing into financial services and venture capital.

"I am delighted that we are strengthening our collaboration, which utilises Toyota's connected technologies, with Grab".

Last month, Indonesian ride-hailing and online payment firm Go-Jek said it would enter Vietnam, Thailand, Singapore and the Philippines in the next few months, investing $500 million in its global push. In particular, that will involve close collaboration with the Toyota Mobility Service Platform (MSPF), which is working on areas such as user-based insurance, new types of financial packages and predictive auto maintenance.

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