Honda, Hino, hitch and drive a self-driving car service business of SoftBank, Toyota

TOKYO (Reuters) – Honda Motor and Hino Motors (a company of SoftBank Corp Toyota Motor that the development of self-driving car service in Japan, such as alliances between car manufacturers and tech firms to broaden.

A sort of self-driving car e-Palette is shown at a press conference on Monet Technologies Inc., a joint venture of SoftBank Group Corp Toyota Motor Corp on self-driving technologies, in Tokyo, Japan on March 28, 2019. REUTERS/Issei Kato

Under an agreement, Honda and truck maker Hino, in which Toyota owns a majority stake, would each invest around 250 million yen ($2.27 million) in the joint venture, Monet Technologies, and 10 per cent stake in the company, Monet said on Thursday.

Tech conglomerate SoftBank Group Corp domestic telco and Toyota formed the company last year. The trip in the ride-sharing area that is dominated by startups such as Uber, Didi Chuxing and Lyft.

Honda and Hino, the participation in the joint venture highlights the challenges facing automakers in the development of new transport services and the emergence of self-driving cars could threaten the sales of vehicles in the future, with users opting for pay-per-use services over car ownership.

It is also the latest example in the growing trend of consolidation among vehicle manufacturers, and technology and communications companies as they struggle with the huge investment and software expertise required to develop new services for which demand has yet to be tested.

“The more manufacturers we can get to join the partnership, the smarter we can be our platform,” Junichi Miyakawa, chief executive of Monet and chief technology officer of SoftBank Corp, said at an event to promote the company.

The new investment by Honda and Hino would leave SoftBank with a 40.2% of the shares in Monet, of slightly more than 50 percent in the joint venture was established. Toyota holds a 39.8 per cent of the shares.

Toyota President Akio Toyoda said that the increased cooperation between car manufacturers and companies in other sectors would help the mobility of the services more transparent.

With the participation of Honda and Hino, “the auto world is a big step in the direction of openness,” he said at the event.

Honda’s investment in Monet will be the last in new mobility services after it invested $2.75 billion for a 5.7 percent of the shares of General Motors Co.’ s Cruise self-driving vehicle unit last year.

The Japanese carmaker, which remained many of his rivals in the development of self-driving cars, is also an investor in Southeast Asian ride-hailing service Grab. SoftBank also invests in Cruise and Grab.

The most recent investment in Monet values the company at just $22.7 million, for now it is a small player in comparison with Cruise, which is estimated at approximately $15 billion, and Uber, which is valued at about $120 billion compared to the expected initial public OFFERING.

For now the size of the company is “slight in comparison with SoftBank Corp’s enterprise value,” said Dan Baker, an analyst at Morningstar. The telco is looking to diversify outside its core cash-generative wireless business in the midst of the pressure on the carrier.

SoftBank Group and the $100 billion Vision Fund already is a major player in the ride-sharing. Founder and Chief Executive Masayoshi Son, says its portfolio companies, including Uber, Didi, Pak and Ola, control 90 per cent of the industry.

Slideshow (5 Images)SERVICES ON WHEELS

Monet plans for the rollout of on-demand bus and a car in Japan in the next year, and a platform to operate self-driving vehicles as early as 2023 based on Toyota’s “e-palette”, a boxy multi-purpose vehicle that can be used for on-demand mobile shops, offices and other services.

The plans leverage data gathered from users of mobile phones, including the location of the user and the data of the steering, brakes, vehicle, and environment collected from the Toyota cars, to create a domestic platform for the transport of people and goods, along with mobile shopping, restaurants and public facilities.

Monet also said that it had formed a consortium of 88 Japanese companies, including Coca-Cola Bottlers Japan, beverage maker Suntory Holdings Ltdand Yahoo Japan Corp to work together on projects, which may include delivery of the product or product-related services.

Reporting by Naomi Tajitsu and Sam Nussey; Editing by Stephen Coates and Muralikumar Anantharaman

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