Days After Apple Invests In China's Didi, Toyota Invests In Uber To Boost Car Leasing

Less than two weeks after Apple unveiledan unexpected $1 billion investment in China's Didi Chuxing, an amount some have speculated may be the cost of continuing "business as usual" for Apple's service offerings in China, moments ago Toyota unveiled that it would inject an undisclosed amount of funds in one of the most valuable private "Decacorns" in the US, Uber.

As Bloomberg reports, Toyota said it is making a strategic investment in Uber Technologies. The purpose behind the investment appears to be to expand the company's lease vertical as it will offer auto leases to the ride-hailing company’s drivers.

Uber declined to disclose the size of the investment. Toyota wasn’t immediately available for comment. By leasing Toyota cars, Uber will expand its existing program, which also includes Enterprise Holdings Inc.

BLoomberg adds that automakers have been developing alliances with the various global ride-hailing services, with one simple motive: to find partners that can help sell more cars. Gett Inc., an Uber rival in Tel Aviv, said on Tuesday that it raised $300 million from Germany’s Volkswagen AG. Daimler AG acquired a pair of ride-hailing startups in 2014.

In January, General Motors Co. invested $500 million into Lyft Inc., the second-largest U.S. ride-hailing service. GM leases vehicles to Lyft drivers in Chicago, and the companies plan to expand the program. As noted above, in a less obvious deal, Didi Chuxing, the Chinese car-booking giant, received a $1 billion investment from Apple Inc. this month.

"Ridesharing has huge potential in terms of shaping the future of mobility. Through this collaboration with Uber, we would like to explore new ways of delivering secure, convenient and attractive mobility services to customers," Shigeki Tomoyama, senior managing officer of Toyota, said in a statement.

Indicatively as more car producers shift to a lease-only driven model, it means that the leasing cliff noted here recently will only get greater. The point is to delay the inevitable moment of repricing all those amortized cars to fair value on company balance sheets. Indeed as we noted in "Deflation Is Coming To The Auto Industry As Used Car Prices Drop, Off-Lease Deluge Looms", the best way to avoid recognizing a lease is to replace it with one or more new leases. That is precisely what Toyota hopes to do with its Uber investment.


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