Toyota Motor Corp. will acquire a $1 billion stake in Grab in one of the largest investments by a carmaker in a ride-hailing provider, underscoring the push by the auto industry to move from manufacturing to services.
The deal extends Toyota's cooperation with GrabTaxi Pte. Ltd., the largest ride-hailing service in Southeast Asia, the carmaker said in a statement Wednesday, without disclosing what percentage of Grab it will own. 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 car industry is racing with technology companies to gain ground in mobility services such as vehicle sharing and ride-hailing, which are set to reduce the need for auto ownership. Toyota has also backed San Francisco-based Uber Technologies Inc. and made investments in Japan Taxi Co. Ltd., an Uber rival run by the chairman of Tokyo's biggest taxi operator.
Toyota President Akio Toyoda has also sought out partnerships with tech companies as part of his bet that data will be a key part of the company's future.
Toyota already invested an undisclosed amount in Grab last year. Since then, Grab has boosted its grip on Southeast Asia by buying Uber's business in the region. Six-year-old Grab faces fierce competition from Indonesian rival Go-Jek, which is expanding ride-hailing and other services in Southeast Asia.
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 current model of individual car ownership. General Motors Co. and Honda Motor Co. are among the carmakers that have invested in ride-hailing applications.
Honda also invested in Grab in a partnership aimed at expanding motorcycle-hailing operations in Southeast Asia.