The investment will allow Grab to expand its range of online-to-offline services such as food delivery and electronic payments in the region.
Reportedly, the investment will allow Toyota to further integrate its services such as user-based insurance and predictive maintenance with the Singapore-based company.
"Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia," Shigeki Tomoyama, Toyota executive vice president, said in a statement included in the announcement.
Commenting on this move, Pinar Ozcan, Professor of Strategic Management at Warwick Business School said "The latest news of Uber's Asian rival Grab receiving $1 billion investment from Toyota is proof that the sharing trend is here to stay. Daimler investing in car sharing company Turo and GM preparing to launch its own car sharing service (Maven) are other contemporary examples".
"As we are going more and more towards a future dominated by Connected, Autonomous, Shared and Electric (CASE) cars, auto manufacturers are realising that making cars for private ownership will not let them survive in the long run."
"This is especially true for metropolitan Asian cities that are fighting premature deaths due to air pollution and where governments are forced to take severe measures to stop the trend (In China, average life expectancy is expected to increase by over 2 years if air pollution is reduced)", Ozcan continued.