There is no doubt about it, from automotive manufacturing to Mobility as a Service (MaaS), any company whose core focus is vehicles will have to begin focusing more on people. This is what Hotai Motor, Toyota's exclusive distributor in Taiwan, has done.
Since 2019, Hotai set up a MaaS advancement office under its president Justin Su, using a top-down approach to implement strategic reforms. The office quickly grew into its own division led by Pin-Tsung Wu, then head of the Lexus business division. In July 2019, Hotai Group announced an organizational change and formally established the MaaS Advanced Strategic Management Group. Wu stepped down from his role in the Lexus business division to focus on MaaS and Hotai's network business.
Hotai Motor's sales in the first 11 months of 2021 surpassed 134,000 units and held a market share of approximately 32%, once again ranking in the top of auto sales in Taiwan. Hotai's annual revenue has exceeded NT$200 billion (US$7.19 billion) for the last three years, with Toyota and Lexus continuing to compete for top sales records in Taiwan.
Wu explains why a company that brings in so much revenue is spending NT$500 million on launching MaaS and peripheral services, as well as expanding its Hotai Pay, Hotai Point and Hotai Shop businesses.
Wu said that when consumers start pursuing user rights instead of ownership rights to vehicles companies whose main business is to build, sell and repair cars will find themselves in crisis. Therefore, MaaS to Hotai is a form of advanced deployment. Hotai believes, whoever is able to take the lead and establish a data platform, membership mechanism, and have the most mobile users before this trend takes off will be the biggest winner in the next-generation mobile industry.
Hotai's iRent car rental platform currently has 5,500 vehicles, 4,500 scooters, and is valued at NT$3-4 billion. Yoxi, Hotai's ride-hailing service, is available in all major cities in Taiwan and has 3,500 vehicles. With these platforms, Hotai has established a threshold that will be difficult for others to cross. Wu believes Hotai's transformation from a company that sells products into one that provides MaaS tools emphasizes the company's format change from one that sells cars into a platform that focuses on people and data.
The biggest change for Hotai is its relationship with users. Wu said in the past it was difficult for them to gather customer data since once cars were sold, they would only see the customer once a year for maintenance during the 10-20 years the customer had the car. By establishing a customer data platform (CDP), data collected by all services of the Hotai Group for each customer can be identified by one ID. Information from Hotai's MaaS services iRent and Yoxi is combined with data from My Toyota, Lexus Plus, Hotai Pay, Hotai Point, and joint cards with CTBC Bank to create a comprehensive user database.
Digital data and mobile experiences will further push Hotai's development and bring with it unlimited potential. Wu provided two examples to explain. First, Toyota's entire line of cars will be available to customers through MaaS. Customers can experience various Toyota models through Yoxi and iRent, with the ultimate goal still to sell cars. Second, onboard vehicle data and user behavioral data can be linked in order to increase external business revenue via targeted marketing and insurance mechanisms.
Looking back, Wu said the biggest difficulty has been in cross-department and cross-enterprise communications. Recruiting professionals is also difficult. In the past, Hotai focused mostly on the automotive industry and less on digital technology professionals. In the future, when recruiting data and engineering professionals, Hotai's competitors will no longer be other carmakers. Instead, it will be competing with the overall digital technology industry.
Hotai has managed to complete internal mergers and launch new services in under two years. Wu said it was possible due to the support of executive decision-makers. Not only did they give them money, resources and policy power, they were also willing to break with the previous Japanese business model and adopt a faster trial-and-error strategy for this transformation.
Previously, Hotai adhered to the Japanese business model of plan-do-check-act (PDCA), especially since the auto industry is related to the safety of life and property. It takes at least three years for a general policy to go from planning to implementation. The planning stage generally takes up 70% of the total timetable. MaaS, though, is different. MaaS stresses the need to respond to users' experiences by quickly adjusting with different iterations. This has been the biggest mindset change for Hotai Group.
Wu acknowledged there are hundreds of ways to transform a business. Many traditional automakers, including Toyota, have gone the way of reinvestment, choosing to buy shares, purchase or merge with MaaS startups. However, this was not the road Hotai wanted to take.
Looking at all of Hotai Group's subsidiaries, it is easy to see that the company likes to do everything itself. When Hotai underwent restructuring in 1999, it decided to get into the car rental market. Since establishing Hotai Rental, its business has grown horizontally into banking, insurance, car manufacturing, car components, luxury products, warehouse logistics, second-hand cars auctions, and now to MaaS. Regardless of if it is crossing industries or out of their expertise, Hotai insists on doing it themselves.
Going back to MaaS, Wu pointed out that when considering transportation MaaS, Hotai thought about the many possibilities of moving from MaaS to MaaS+. Currently, by using data to create a basic infrastructure, Hotai looks forward to giving "mobility" more room to grow in the future.
For example, in collaboration with the government of Taiwan, Hotai developed a Taiwan travel platform. Wu believes that to truly implement MaaS, it must combine a trip's first and last mile through a one-stop service and one-time payment. It should be able to plan the best route from Taipei to Kenting seamlessly, starting with the Yoxi pick-up point to the Taiwan high speed rail (THSR), THSR to the bus, bus to iRent location, all the way to the final destination.
Wu said the Taiwan travel platform will be one of its core engines. Transportation companies such as Taiwan Taxi, WeMo, GoShare, Carplus, Taiwan Railways Administration and THSR will all have the opportunity to connect through the API, turning the platform into a truly connected MaaS. This project is currently in active discussion with the MOTC. Hotai aims to take advantage of being an early entrant in the sector. By taking the lead to integrate the group under its MaaS service, Hotai will be fully prepared for cross-market and cross-vehicle MaaS services in the future.
