On Thursday, Hyundai Motor Co announced plans to invest in Southeast Asia based ride hailing company, Grab in hopes to expand into the region to decrease their reliance on China as well as damaging relations between Beijing and Seoul. This marks the company’s very first direct investment in a ride hailing firm giving them a start in business in the world’s third largest ride hailing market after China and the U.S.
Grab has become the biggest operator in the region’s third party taxi hailing and private hailing sector and already expanded to 8 Southeast Asian countries. Last year, South Korean firms were targeted in a Chinese backlash over Seoul’s decision to deploy a U.S. missile defense system against Beijing’s objections. This has increased Hyundai’s interest in the Southeast Asia area.
The two firms will develop a joint partnership to utilize Hyundai’s eco friendly vehicles including the IONIQ Electric to enhance future mobility such as innovations in ride sharing and self driving cars. Recently, Grab raised $2.5 billion in financing that included other companies such as Didi Chuxing, Toyota Tsusho, and SoftBank Group Corp. Plans to also build a car plant in Southeast Asia in areas like Vietnam or Indonesia is expected to take place.