Toyota Motor Corp will invest $1 billion in Grab Holdings Inc in the largest bet by a carmaker in a ride-hailing provider, underscoring the push by the auto industry to move from manufacturing to services.
The investment, part of Singapore-based Grab’s latest funding round, values Southeast Asia’s largest car-hailing service at $10 billion, according to a person familiar with the matter.
A Toyota executive will be appointed to Grab’s board, and another Toyota employee will be seconded to Grab to as an executive officer, the carmaker said Wednesday.
Automakers are expanding in vehicle sharing and ride hailing as major technology companies push onto their turf with mobility services aimed at making it less necessary for individuals to own a car.
General Motors Co, Daimler AG and Honda Motor Co are among manufacturers that have invested in ride-hailing applications, while also developing self-driving vehicles.
At Toyota, President Akio Toyoda is working to turn the 81-year-old auto giant his grandfather founded into a mobility-services provider.
The company has also backed Uber Technologies Inc and invested in Japan Taxi, an Uber rival run by the chairman of Tokyo’s biggest taxi operator.
Toyota and Grab representatives declined to comment on Grab’s valuation or the size of Toyota’s stake. The investment is set to take place around the end of this month, Toyota said.
A Toyota Group company already invested an undisclosed amount in Grab last year, and the companies have worked together since August developing connected services.
In March, Grab boosted its grip on Southeast Asia by buying Uber’s business in the region. The six-year-old company faces fierce competition from Indonesian rival Go-Jek, which is expanding ride-hailing and other services in Southeast Asia.
Toyota has sought partnerships with tech companies in a bet that data will be a key part of the company’s future. The cooperation with Grab will focus on services related to fleet management, such as maintenance.
The two companies are exchanging information on autonomous driving, but no decision has been made on collaboration in that area, a Toyota spokeswoman said.
Toyota is still discussing which executive to send to Grab’s board, and is considering dispatching “a number” of Toyota employees to its partner, the spokeswoman said.
At $10 billion, Grab is still a relatively small player. Uber was valued at $62 billion in a stock deal announced in May, and Didi Chuxing was valued at $56 billion after a fundraising round in December.
Grab has powerful backers though, including Uber, Didi and Softbank Group Corp., the Japanese tech giant run by Masayoshi Son that has invested billions in automation and artificial intelligence companies, including GM’s Cruise autonomous-car unit.
Toyota, the world’s most valuable carmaker, has a market capitalization of about $221 billion and about $54 billion in cash, equivalents and short-term investments.
Carmakers are working with and competing against technology companies to figure out how to make money from services to drivers as automation, electrification and on-demand transportation threaten to reshape the industry.
GM has invested in ride-hailing provider Lyft Inc, while also developing self-driving cars to compete with other autonomous-vehicle companies, including Alphabet Inc’s Waymo.
Honda also invested in Grab in a partnership aimed at expanding motorcycle-hailing operations in Southeast Asia.