Can South Korean Carmaker Hyundai's Investment Help Ola Beat Uber?
In a strategic partnership, Hyundai Motorcorp and Kia Motors invest $300 million in the Indian ride-hailing company
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South Korean automobile giant Hyundai Motorcorp has formed a strategic partnership with India's biggest ride-hailing startup Ola, and invested $300 million along with its affiliate partner Kia Motors, to develop electric vehicles and explore mobility solutions in global markets.
The three companies will collaborate on developing unique fleet and mobility solutions to build India-specific electric vehicles and infrastructure. The company also plans to nurture best in class opportunities and offerings for aspiring driver partners with customized vehicles, on the Ola platform. The support could help Ola fight the growing dominance of Uber.
Creating Dominance in EVs
The South Korean automotive firm Hyundai is going full throttle to create its dominance in electric vehicles and smart mobility solutions. The company has also invested $250 million in Singapore's unicorn Grab to create its presence in Southeast Asia. Now the company has partnered with Ola to improve India's mobility infrastructure.
Speaking about the development, Euisun Chung, executive vice chairman of Hyundai Motor Group, says, "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."
"Hyundai will proactively respond to market changes and persistently innovate to deliver greater value to our customers," he adds.
Bhavish Aggarwal, Co-founder and CEO of Ola says, "We're very excited about our partnership with Hyundai, as Ola progresses to build innovative and cutting-edge mobility solutions for a billion people. Together, we will bring to market a new generation of mobility solutions, as we constantly expand our range of offerings for our consumers."
He adds, "This partnership will also significantly benefit driver-partners on our platform, as we collaborate with Hyundai to build vehicles and solutions that enable sustainable earnings for millions of them, in the time to come."
As part of the strategic collaboration, the companies will co-create solutions to operate and manage fleet vehicles, marking the Group's first foray into the industry, as they expand operations from automobile manufacturing and sales to total fleet solutions.
The partnership will offer Ola drivers various financial services, including lease and instalment payments, while vehicle maintenance and repair services are expected to enhance customer satisfaction.
Smart Mobility Solutions
Hyundai Motor Group expects to accelerate its transition from a "car manufacturer" into a "Smart Mobility Solutions Provider", as 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.
Hyundai, Kia and Ola will also coordinate efforts to develop cars and specifications that reflect the needs of the ride hailing market (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.
Ola aims to create over two million livelihood opportunities in the mobility ecosystem by 2022. This partnership will help accelerate micro-entrepreneurship in India's growing pool of aspiring driver-partners.
It already hosts over 1.3 million partners on its platform and will further empower hundreds of thousands more, with access to tailored offerings across vehicles, financing, and insurance and more, substantially bringing down the total cost of ownership for partners.