The injection of US $ 1 billion from Toyota for Grab is the largest of the automotive companies for online taxi applicators.
Online taxi business is a phenomenon in various parts of the world. The Indonesian public is familiar with Go-Jek, while Grab has operated in eight countries in Southeast Asia. Likewise in western countries there are Uber and Lyft.
Today, many people no longer buy vehicles to ride on their own. With a ride sharing scheme, they use it to get additional income by joining online taxi and motorcycle taxi applicator companies. This condition is considered as an opportunity and a challenge for automotive companies.
Trends in sharing a ride that allows people to travel easily using online transportation services can potentially reduce vehicle sales. “For automotive companies, this is a painful reality. But it can be a business opportunity, if they understand correctly,” said Sawakami Asset Management Inc. analyst Tatsuo Yoshida quoted from Fortune on Thursday (13/6) last week.
That condition makes the steps of Toyota Motor Corporation (Toyota) injecting funds of US $ 1 billion or equivalent to Rp. 13.9 trillion to Grab Holding Inc. (Grab) understandable. Because, besides being able to make Grab partners as consumers of the cars they produce, Toyota can also work on various other services, including financial services.
Moreover, Grab and Toyota plan to develop services connected through the Toyota Mobility Service Platform (MSPF) such as user-based insurance, credit programs, and periodic maintenance. “This (investing in Grab) is a good decision. Toyota should not be late in targeting this market,” he said.
The selection of Grab among other online transportation service providers is also considered appropriate. Because, Southeast Asia is a very important market for Toyota. The Toyota Asia unit sells more than 1.5 million vehicles in the first quarter of 2018 outside of Japan and China. The large number of car sales occurred in the Grab coverage area, namely Malaysia, Indonesia, Singapore, the Philippines, Thailand and Vietnam.
This investment is also considered strategic, because Toyota can block opportunities for competitors such as Hyundai and Honda who are also Grab investors to seize the online transportation partner market in Southeast Asia. Toyota took a similar step since 2016, when investing in Uber.
Quoting from TechCrunch, the population of Southeast Asia reaches 600 million people, and half of them are connected to the internet. The population of internet users exceeds the US population. No wonder if the online transportation industry is targeting consumers in this region. So even with automotive companies that target their driver partner segment.
Moreover, Google projects transactions from the share sharing industry to reach US $ 20.1 billion per year by 2025. This value has increased significantly compared to last year which was only US $ 5.1 billion. This potential can be a field of money for automotive companies that are smart in looking for business gaps.
Toyota’s investment in Grab is not the first, although it is called the largest of the automotive companies for online taxi applicators. In Indonesia, PT Astra International Tbk invests US $ 150 million or around Rp.2 trillion to Go-Jek. Through these investments, Astra supports Unicorn. The Land is expanding nationally or even regionally. “Our main dealers there (Papua) are strong, later we can collaborate,” said Astra International President Director Prijono Sugiarto.
While in Malaysia, Grab has received an investment from the Japanese auto giant, Honda, on December 12, 2016. Afterwards, Toyota through Toyota Tsusho Corp along with similar companies from South Korea, Hyundai invested in Grab worth US $ 2.5 billion or around Rp. 33.2 trillion in August 2017. The investment is part of funding led by online-based transportation company from China, Didi Chuxing and Japanese technology giant, SoftBank.
Globally, the trend of automotive companies investing in online-based transportation startups has even occurred since 2016. General Motors (GM) poured an investment of US $ 500 million dollars or around Rp6.8 trillion to Lyft, a Uber competitor in the United States (US), early 2016. In the agreement, GM is willing to lend its vehicle to the driver of Lyft for a fee of US $ 99, equivalent to Rp 1.3 million per week.
While in Europe, the German automaker, the Volkswagen Group, injected funds worth US $ 300 million or equivalent to Rp. Gett, a start-up online transportation based in London, in May 2016. The Gett was first launched in Israel, in 2011.