The deal extends Toyota's cooperation with Grab, the largest ride-hailing service in Southeast Asia, the carmaker said in a statement Wednesday, without disclosing what percentage of Grab it will own. Grab said it plans to work with its new investor "to create a more efficient transport network that will ease traffic congestion in Southeast Asia's megacities" and help its drivers increase their income.
Toyota Motor Corp has agreed to buy a $1 billion stake in Southeast Asia's Grab in the biggest investment by a carmaker into a ride-hailing firm, at a time when traditional automakers are racing to team up with disruptive tech companies. The US$1 billion sum is the largest-ever investment globally by an automaker in the ride-hailing sector.
Toyota is investing a further $US1 billion in ride-sharing giant Grab.
Wednesday's announcement deepens Toyota's partnership with Grab, following an earlier, undisclosed investment by the automaker's trading arm previous year.
It is also the latest collaboration between a global vehicle maker and a technology firm as ride-hailing companies dominate the fast-growing field of mobility services, raising the risk of a future where auto ownership declines in favour of such services.
"A board seat nearly guarantees that Grab will buy cars from Toyota", said Steve Man, an analyst at Bloomberg Intelligence in Hong Kong.
"As a global leader in the automotive industry, Toyota's investment in Grab is based on their conviction in our leadership in driving the adoption of new mobility solutions and expanding O2O mobile services, such as GrabFood and GrabPay, in the region", said Ming Maa, president at Grab.More news: Here's how Google's smart speaker is getting 'smarter'
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There has been speculation for several years about a potential IPO for Grab, but in April, CEO Anthony Tan told CNBC it was just one of "many options" for the company.
Toyota said it aimed to offer financing, insurance and maintenance services to drivers based on data collected through recorder devices already installed in some Grab vehicles. It also has Southeast Asia's biggest land transportation fleet, delivering over six million rides per day.
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.
Other Grab investors include Japan's Honda Motor Co Ltd, South Korea's Hyundai Motor Co and Chinese ride-hailing firm Didi Chuxing.
Grab will also work with Toyota on connected vehicle services such as user-based insurance, financing programmes and predictive maintenance features for Grab's drivers.
On April 8, Uber's rideshare service disappeared and commuters in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam switched over to the Grab app.