South Korean car manufacturer Hyundai has become very popular in India. It is the most popular brand in the country after Maruti Suzuki. Now Hyundai is planning to make investments with the online taxi firm Ola. As per the reports from Entrackr Hyundai is in talks with Ola to invest up to $300 million(Over Rs. 2,000 crores). Both Hyundai and Ola have already held two rounds of talks and this deal is likely to be finalized in the next four to six weeks.
The South Korean automaker may take up to 4 % stake in Ola, opening up the possibility of other automakers picking up similar stakes in other cab aggregators. Automakers around the world realize that the future belongs to shared mobility rather than individual car ownership. This means that services such as Uber, Ola and Grab will eventually be the biggest buyers of cars around the world.
Hyundai had earlier invested in Singapore based start up Grab which had bought Uber’s Southeast Asia business. Hyundai has worked out a deal with Grab to include Kia vehicles in ongoing EV pilots across South East Asia region. The deal if materializes will provide much-needed push to Ola that has been fighting Uber in the country. It would also give a spark to its proposed plan for electric mobility unit. Ola has recently scooped up Rs 400 crore from Tiger Global, Matrix Partners, and Sarin Family India LLC. Ola had committed to bring 1 million electric vehicles in its fleet by 2021.
The Hyundai’s deal with Ola will also help entrepreneur Bhavish Agarwal to keep SoftBank at bay. Agarwal is not in favour to raise more capital from the Japanese investment giant. At present, Softbank owns 26 percent of stake in Ola.
This is not the first time that Hyundai is involved in some sort of partnership. South Korean automobile giant announced the partnership with Revv and all the cars of Hyundai India’s fleet are available for subscription. This new model allows customers to enjoy the ownership of the vehicle without worrying about the service costs.
At the moment, Hyundai will offer the subscription services as a pilot project in major cities only. Six cities that will offer the services are Delhi NCR, Mumbai, Kolkata, Pune, Bangalore and Hyderabad. The idea behind car subscription is to reach more people who’d be able to afford a subscription rather than an outright purchase.