How Toyota prepares for the future without cars
- Oct 01, 2018
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Asia's largest carmaker, Toyota Motor is gearing up for a future in which people will not buy cars.
This is the rationale behind the Japanese company's huge investments in individual transportation services, especially the $ 1 billion stake in Grab, the leader in the segment in Southeast Asia. For Toyota, the partnership is an opportunity to get Grab to buy more cars from the brand and to offer services such as vehicle insurance and maintenance, said Shigeki Tomoyama, global head of Toyota's connected car division, in an interview in Nagoya .
The Singapore-based Pact is the mainstay in Asia of Toyota's strategy to join the largest individual transportation companies in each region and then integrate its hardware and software into its services. Toyota tries to stay ahead of rival automakers in the face of an uncertain future, in which autonomous cars and shared economy threaten the traditional model of vehicle ownership.
"We recognize that service-minded people control large numbers of drivers and users and are gaining supremacy over their local transportation systems," said Tomoyama, who now has a seat on Grab's board of directors. "It is unrealistic for us to attempt to set up an individual car rental or transportation service from scratch in a market like the US or Asia."
Tomoyama wants Grab to hire its drivers almost exclusively from Toyota vehicles, he said. Currently, there are three of the brand in every five leased. The automaker also plans to install handsets that record data on all 7,000 cars of the GrabRentals division's fleet in Singapore by the end of March and then expand the initiative to the rest of the region. This will help Toyota offer services such as insurance and maintenance to drivers through the connected vehicle system.
At Uber Technologies, Toyota dumped half a billion dollars last month and is designing a minivan for the company's robot-taxi project. In China, Tomoyama discusses with Didi Chuxing the ideal car type for a possible collaboration, but has not yet come close to considering an investment.
Toyota is not alone. Hyundai Motor also invested an undisclosed sum at Grab as part of an agreement to put less environmentally-friendly cars on the GrabRentals fleet. Honda Motor also invested in the company.
Outside Asia, General Motors injected half a billion dollars into Lyft in 2016 and works on a robot-taxi project with the automation division. Daimler and BMW have merged their car-sharing operations this year after setting up several individual transportation projects.
For Toyota president Akio Toyoda, the move threatens the very survival of the company his grandfather founded in 1937 and plans to turn it into a mobility services provider.
Tomoyama understands that Uber's area of advanced technologies - which does research with autonomous cars - is essential to the value of the company and that the two partners have high expectations of each other.
He says Toyota accelerated the decision-making process by taking another hierarchical approach. He and his six executive directors maintain constant contact via social network, which Tomoyama considers a huge change.
"All the core issues are decided by instant messaging," he said.