Hyundai makes second investment of $342m in Grab, Latest Business News - The New Paper

Hyundai makes second investment of $342m in Grab

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Carmaker raises stake in ride-hailing firm comes as it battles sluggish sales

SEOUL/SINGAPORE : Hyundai Motor Co has raised its stakes in growing South-east Asian markets with a US$250 million (S$342 million) investment in Singapore's Grab, its second in the ride-hailing firm, as it chases rivals in the race for new-age transportation.

The investment is Hyundai's biggest in an auto-tech firm, yet is smaller than those made by others including Toyota Motor Corp.

Nevertheless, it marks a shift in strategy at a South Korean conglomerate that has typically shunned partnerships in favour of developing its own technologies.

Hyundai and affiliate Kia Motors Corp will launch pilot electric vehicle (EV) projects in South-east Asia next year, starting with Singapore, where 200 EVs will be leased to Grab drivers, Hyundai said.

It said the project will later be expanded to countries including Malaysia and Vietnam.

The move comes as Hyundai battles sluggish sales in its two biggest markets, China and the US, while its stock price has fallen nearly a third this year.

Hyundai has joined the global race to invest in mobility firms as individual car ownership is widely expected to fall due to in part to increasing car-sharing options in big cities.

"Not only Hyundai, but all global auto manufacturers have realised that generating revenue solely from selling vehicles is not a sustainable, viable option," Hyundai's chief innovation officer, Mr Chi Young Cho, told reporters in Seoul.

Earlier this year, Hyundai said it invested US$25 million for a 0.45 per cent stake in Grab, joining investors such as Chinese ride-hailing firm Didi Chuxing, Japan's SoftBank Group Corp and Toyota Motor Corp.

Grab said it has so far raised US$2.7 billion in funding, including Hyundai's latest investment, and is on track to attract over US$3 billion by the end of this year.

Grab president Ming Maa told Reuters that the company does not yet have plans to go public.

The partnership will help Grab lower car ownership and operating costs for its drivers, Mr Maa said.

Lower costs help ride-hailing firms attract and retain drivers.

Hyundai expects to launch its own ride-sharing service next year, said Mr Chi, who oversees Hyundai's new businesses such as those involving ride-sharing, artificial intelligence and robotics.

The automaker aims to collect data such as on battery charging from cars it leases to Grab to develop vehicles better tailored for Southeast Asia.

It also hopes to explore the possibility of building a factory in the region in the longer term.

South-east Asia's EV market is very small.

Only 142 battery-powered cars are likely to be sold in the market this year, versus six last year, showed data from market researcher LMC Automotive.

EV sales this year are likely to reach 693,894 units in China and 172,744 units in the US, LMC data showed. - REUTERS