Hyundai, Kia invest big in Grab

Hyundai Motor and Kia Motors will jointly invest $250 million into the world’s third-largest ride-hailing operator Grab, eyeing shared mobility services as a way to overcome faltering car sales, the companies said Wednesday.  Hyundai has already injected $25 million into Grab in January, so total investment on the Singapore-based company adds up to $275 million. This is the largest investment made in a single company by the two sister automakers under Hyundai Motor Group, the group said.

Grab, which has operations in 235 cities in eight countries in Southeast Asia, is the largest ride-hailing service provider in the region, though it is smaller than China’s Didi Chuxing and U.S. company Uber, which have larger operations elsewhere.

The big bet in Grab comes as the largest auto group in Korea seeks fresh business models for growth. The group said it will make the two carmakers core players in an era where shared mobility is becoming ever more important.

The three companies will start their collaboration by deploying Hyundai and Kia-made electric cars in Grab’s Singapore business. Hyundai will first supply 200 electric vehicles to the ride-hailing company by early next year. Kia is mulling whether to follow suit soon after.

The vehicles will be rented out to Grab drivers. This way, Hyundai can introduce its electric cars to Singapore and other Southeast Asian markets once the pilot test in Singapore proves successful.

“Targeting emerging markets based on strong partnerships with local companies like Grab could be a sustainable way of making profits,” Hyundai said in statement.

If more people use ride-sharing services and other apps rather than driving their own cars, these large mobility service companies could become the major customers for carmakers in the future, and automakers are already aware of this.