Toyota has made a billion-dollar investment into the ride-sharing service Grab, in line with chief executive Akio Toyoda’s belief that car-makers need to expand into other areas to survive.
It is the biggest investment by a car-maker into ride sharing so far, as the companies invest in various technology firms as a way of coping with the rise of autonomous vehicles and the sharing economy.
While announcing a major restructure last year Toyoda—the grandson of Toyota founder Kiichiro Toyoda—said the automotive industry “has now entered a phase of competition and co-ordination that involves entities from other industries”.
He also spoke of “changes of unprecedented speed and scale”, and said the company faced “a ‘now or never’ situation in which not a moment can be spared”.
Ford, BMW, Fiat Chrysler, Peugeot, and Volkswagen—all steered to various degrees by a family, usually the founder’s—are other auto giants contending with the same issue. Volkswagen previously bought shares in on-demand taxi app Gett, for example, and BMW has invested in carpooling tool Scoop. Ford this year launched Chariot in London, a quasi-public transport service using minibuses.
Dr Paul Nieuwenhuis, co-director at Cardiff Business School’s Centre for Automotive Industry Research, said in a recent interview with CampdenFB that founding family-controlled or run businesses did tend to have more of a “survival instinct”.
“So long as they don’t think of themselves as an internal combustion engine car maker, but think of themselves as a family business that needs to adapt, I think they will [adapt] very quickly,” he said.
Singapore-based Grab operates in Southeast Asia and has been working with Toyota since mid-last year, according to a statement from the latter. As part of the new deal, a Toyota executive will also sit on the Grab board.
The two companies have been collecting driving data installed in 100 Grab rental cars and storing it on Toyota’s proprietary “mobility services platform”, a source of information for shared and connected vehicles.
The two companies said they were looking to develop a more efficient ride-hailing business.
Anthony Tan, co-founder and chief executive of Grab, said the companies were working towards a future “that will provide for safer and more affordable rides, more liveable cities, and millions of new micro businesses in the digital revolution”.
Toyota turned over $261 billion in the fiscal year ending 2018.