SEOUL • Hyundai Motor has raised its stakes in growing South-east Asian markets with a US$250 million (S$343 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.
Nevertheless, it underscores a shift in strategy at a South Korean conglomerate that has typically shunned partnerships in favour of developing its own technologies.
Hyundai and its affiliate Kia Motors will launch pilot electric vehicle projects in South-east Asia next year, starting with Singapore, where 200 electric vehicles will be leased to Grab drivers, Hyundai said in a statement.
It said that the project will later be expanded to countries including Malaysia and Vietnam, where markets for traditionally powered cars are dominated by Japanese rivals.
The move comes as Hyundai battles sluggish sales in its two biggest markets, China and the United States, 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, in part due 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 chief innovation officer Chi Young-cho told reporters in Seoul. "It is better to disrupt than being disrupted."
Earlier this year, Hyundai said it had 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 and Toyota Motor.
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 year end.
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, he added.
Lower costs help ride-hailing firms attract and retain drivers.
Hyundai expects to launch its own ride-sharing service in select markets next year, said Dr Chi, who oversees Hyundai's new businesses such as those involving ride-sharing, artificial intelligence and robotics.
He also said the automaker is looking at acquisition opportunities, without giving details.
South-east Asia's electric vehicle 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.
REUTERS
