NAGOYA - Toyota Motor Corp. is considering investing up to ¥60 billion ($550 million) in Chinese ride-hailing giant Didi Chuxing Technology Co. in an effort to expand its business in China, sources close to the matter said Wednesday. Toyota and Didi are looking to set up a joint venture to offer mobility services, including ride-sharing in the world's largest auto market, the sources said. Didi has secured an overwhelming ride-hailing market share in China through the acquisition of Uber Technologies Inc.'s Chinese business. The Chinese ride-hailing service operator has already aligned with Toyota in the so-called e-Palette project to develop electric and autonomous vehicles that can be used as mobile stores, together with other global technology giants, including Amazon.com Inc. The move comes amid Toyota's continuing transformation into a "mobility company" that offers a wide range of services.
Two titans of Japanese industry, Toyota Motor Corp. and SoftBank Group Corp. said Thursday they are setting up a new joint venture to develop autonomous driving technologies and other on-demand services, including food deliveries, medical care and office space. Funded with an initial investment of ¥2 billion (around $17.5 million), the new company, Monet Technologies Corp., will begin operations as early as next March. While the on-demand services will initially roll out using traditional vehicles, by 2020 the company is aiming to utilize Toyota's driverless concept vehicle, E-Palette. Both Toyota President Akio Toyoda and SoftBank Chairman Masayoshi Son painted the partnership as part of a broader vision to embrace new business ideas in an age of artificial intelligence. Speaking before a throng of reporters, SoftBank founder Son said that the partnership will be able to harness the synergy and strengths offered by each company.
Uber has been seeking ways to lower development costs and losses in its autonomous-vehicle unit following a fatal crash involving one of its cars earlier this year in Arizona. Last year, the Uber division spent about $750 million on self-driving car development before making cuts this year, according to people familiar with the matter. In recent months, Uber has closed its Arizona autonomous-vehicle operations and laid off about 400 test drivers, some of whom it will rehire after undergoing new training. Uber also has taken its self-driving vehicles off the roads in the San Francisco Bay Area, Pittsburgh and Toronto while investigators look into the circumstances of the Arizona crash. For ride-sharing concerns like Uber and Lyft Inc., autonomous vehicles could cut their biggest expense: paying human drivers.
The two companies said they would form a joint venture by the end of March, with 50.25% owned by SoftBank and 49.75% owned by Toyota, to deploy vehicles in a country where 83% of its bus operators aren't profitable. Toyota and SoftBank hope to deliver robot-cooked meals or provide medical checkups using Toyota electric vehicles by the latter half of the 2020s, they said. The two are also studying other services, such as mobile offices, they said. "Many people must be wondering why SoftBank and Toyota are partnering," Toyota CEO Akio Toyoda said, noting that the automotive giant and the technology investor have long been seen as incompatible. But "the automotive industry is at a once-in-a-century transformation, he said, adding that working with SoftBank will be important to unlocking new partnerships in a self-driving, connected era.
On Wednesday, Honda Motor Co Ltd said it would invest $2.75 billion (£2.13 billion) and take a 5.7 percent stake in General Motors Co's Cruise self-driving vehicle unit, in which SoftBank is also an investor. At the Paris Auto Show on Wednesday, the heads of Daimler AG and Renault said the two companies may expand their cooperation to batteries, self-driving vehicles and mobility services. Toyota and SoftBank do not have any major partnerships in mobility technologies at the moment, although both are developing technologies for self-driving vehicles, car sharing and other services. Toyota, one of the world's largest automakers, has been developing automated driving and artificial intelligence technologies in-house and with its group suppliers, while acquiring some technology start-ups. Both Toyota and SoftBank have investments and partnerships with Uber Technologies and ride-hailing firm Grab, and Didi Chuxing.