Toyota Motor Corp. said Wednesday it will invest $1 billion in major ride-hailing company Grab Holdings Inc. to deepen their tie-up, as the automaker looks to adapt to the growth of app-based mobility services.
Under the alliance, Toyota is collecting and analyzing data from the Singaporean company's operations and seeks to use the data for new automobile services elsewhere.
Grab provides services in 217 cities in eight Southeast Asian countries, and strengthened its business in March when it acquired Uber Technologies Inc.'s Southeast Asian operations.
Global automakers face a dramatic shift with automobile app services giving customers the choice not to buy and own vehicles.
As demand for app-based services is growing in emerging markets, Toyota, Japan's biggest automaker, and other major carmakers are making efforts to diversify their businesses from manufacturing and selling vehicles to ride-sharing and other new services.
Toyota President Akio Toyoda said last month the carmaker will expand investment in new technologies and new fields, as the auto industry responds to electrification, automation and connectivity.
"Toyota is expanding its investment in new technologies and in new fields. Additionally, we're strengthening our alliances, not only within the Toyota group but also with other companies inside and outside our industry" for long-term growth, Toyoda said at the time.
Japan's No. 3 automaker Honda Motor Co. in 2016 took a stake in Grab, as it is considering launching a motorcycle-sharing service.
Additionally, Nissan Motor Co., Japan's second-largest carmaker, and its alliance partner Renault SA of France has agreed with major European public transportation operator Transdev to jointly develop a ride-hailing service using self-driving vehicles.
And Suzuki Motor Corp. has teamed up with Indian ride-hailing company ANI Technologies Pvt. Ltd. to sell cars to first-time taxi drivers and also teach them how to drive.
A Toyota executive will be appointed to the board of directors at Grab, and a Toyota official will be seconded to Grab as an executive officer, Toyota said.
Anthony Tan, co-founder and CEO of Grab, said in a release that the partnership with Toyota will "enable us to become the one-stop mobility platform in Southeast Asia."
"I am delighted that we are strengthening our collaboration, which utilizes Toyota's connected technologies, with Grab," said Shigeki Tomoyama, Toyota executive vice president.