Toyota grabs Grab
Japanese car manufacturer Toyota announced on Wednesday that it will invest $1 billion in Singapore-based ride-hailing firm Grab.
Although many people attribute ride-hailing and ride-sharing with companies like Uber and Lyft, Grab has made a name for itself in Asia. In fact, the company bought out Uber’s Southeast Asia back in March, making Grab the major player in the region. After the investment, Grab is worth $10 billion, and it will use this new money to develop its food delivery service (similar to Uber Eats) and mobile payment platform.
The deal will also significantly help Toyota expand. Further, Grab will now share its technological research and advancements with the traditional car manufacturer, which will potentially help the company acquire self-driving technology. Indeed, consulting firm Bain and Co. reported recently that traditional automobile manufacturers need to invest in ride-hailing or ride-sharing companies as autonomous cars become more popular.
Moreover, companies have taken notice and are planning ahead. In 2016, GM invested $500 million in Lyft, Volkswagen bought $300 million worth of shares from Gett, and Honda also invested in Grab.
The investment will put a Toyota executive on the board of directors, and it will make another Toyota employee an executive officer of Grab.
If Grab can continue to make technological advancements and fend off new entrants like Indonesia’s Go-Jek, this investment could prove to be brilliant for Toyota. Car manufacturers will eventually need to move to autonomous driving one way or another, and this investment by Toyota puts them one step ahead of their competitors.
Featured image via Pixabay/Cicero7
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