Ola fight against Uber to get a $300-mn push from Hyundai and Kia
The three companies - Ola, Hyundai and Kia - will co-create solutions to operate and manage fleet vehicles
Last Updated at March 26, 2019 15:44 IST
South Korean conglomerate Hyundai Motor Group and Indian ride-hailing company Ola have formed a strategic partnership under which the former's automobile brands — Hyundai and Kia Motors — will invest $300 million in Bengaluru-based Ola. This would be the biggest combined investment for Hyundai and Kia to date. The partnership is expected to help Ola intensify its battle with US rival Uber, which is rapidly gaining share of the Indian market.
The three companies would collaborate on developing fleet and mobility solutions, building India-specific electric vehicles and infrastructure. They would also innovate opportunities for aspiring driver partners with customised vehicles on the Ola platform.
“India is the centerpiece of Hyundai Motor Group’s strategy to gain leadership in the global mobility market and our partnership with Ola will certainly accelerate our efforts to transform into a smart mobility solutions provider,” said Euisun Chung, executive vice-chairman of Hyundai Motor Group.
The companies have agreed to co-create solutions to operate and manage fleet vehicles. This marks Hyundai Motor Group’s first foray into the industry, as it expands operations from automobile manufacturing and sales to total fleet solutions.
The partnership would offer Ola drivers various financial services such as lease and instalment payments.
“We’re very excited about our partnership with Hyundai, as Ola progresses to build innovative and cutting-edge mobility solutions for a billion people,” said Bhavish Aggarwal, CEO of Ola.
Ola has so far raised a total of $3.5 billion in funding over 20 rounds from global investors including SoftBank, Accel and Tiger Global Management, according to data platform Crunchbase.
Hyundai, Kia and Ola have also agreed to coordinate efforts to develop cars and specifications that reflect the needs of the ride-hailing market which includes both users and drivers. Data accumulated during service operation will allow the companies to make constant vehicle improvements to better meet local needs and specifications.
Hyundai Motor Group said the partnership’s initiatives will allow it to engage in all aspects across the entire mobility value chain ― including vehicle production, fleet operation and mobility services. Last November, Hyundai and Kia announced to invest an additional amount of $250 million in Singapore-based ride-hailing firm Grab.
Experts say that traditional automakers are making investments in new age companies because with autonomous driving, electrification and shared services, the car industry is going through a massive shift. Also firms like Tesla, Google and Apple are becoming the new competitors for traditional players such as Daimler and Hyundai. At this year’s CES, the world's largest tech convention, Hyundai showcased Elevate concept vehicle, which is a car and also a robot as it can walk across rough terrain instead of just rolling on the ground. The vehicle has four extendable legs with wheels and can step over obstacles along the way.
“Monumental shifts are taking place in the automotive sector. Autonomy, connectivity, electrification, and sharing (ACES) require a set of capabilities that traditional auto has never encountered before,” says research firm CB Insights. Facebook, Amazon, Microsoft, Google, and Apple’s (FAMGA) investments across auto and mobility encompass startups working on mobility services, autonomous driving, vehicle connectivity, electric vehicle technology, and auto commerce, according to CB Insights.
Ola which hosts over 1.3 million partners on its platform said that it aims to create over two million livelihood opportunities in the mobility ecosystem by 2022. It said this partnership will help accelerate micro-entrepreneurship in India’s growing pool of aspiring driver-partners.