Going Places: Ensuring That The Rental Car Space Continues To Flourish In India
Holding a pg diploma in finance & marketing from iim calcutta, sunil in his career spanning 23 years, hass held key positions across an array of companies that include asian paints hindustan unilever thomas cook and kuoni to name a few. India is slated to become the world's third-largest passenger vehicle market by 2021. This unprecedented growth can be attributed to several factors, particularly the growth of the car rental space. The industry is projected to grow at a CAGR of 35 percent on the back of rising demand and is expected to reach a valuation of Rs.800 billion by the end of this year.
Car rental companies have driven this growth by offering an asset light lifestyle to Indian consumers. This has gained increasing traction as the shared economy takes root, especially amongst the millennials. Top players in the space enable customers to hire chauffeur driven cars and offer them the choice to even book selfdrive rentals for as long as they wish to. Mass consumers are now availing premium experiences at highly affordable prices without having to worry about ownership.
The use of rental cars by corporate customers for the travel needs of their employees has always been a driver of growth. However, a new segment is fast emerging that of employees being offered facilities for ride sharing to reduce the rigour of daily commutes to and from workplaces in metropolitan cities.
The enhanced accessibility and affordability facilitated by car rental companies is aligned with the evolved sensibilities of India's aspirational consumer base. Luxury car rentals, for instance, have become welcome supplements to the Indian wedding market, which is currently growing at a CAGR of 25 percent, and serve to add a premium feel to the celebrations.
Technological innovations have played a major role in driving the faster adoption of car rentals in India, enabling players in the space to make the process paperless and convenient. This makes it attractive to new age customers who prefer online services over traditional ones to improve access. Other tech advancements such as the telematics system, GPS, remote immobilization, security, employee ridesharing apps and others, have also enabled car rental companies to offer attractive in car experiences to customers like never before.
Given these developments, the market is likely to cross $30 billion in value by 2022. But, can this growth be accelerated further? The answer, in my opinion, depends on the further disruption that would be brought about by key industry players in the next few years. Domain leaders in the
car rental space are now agreeing with the fact that the future is electric. The car rental and ride sharing industry can contribute to the growth of the electric vehicle space in India in a major way.
Driving The Electric Revolution For Sustainable Mobility
According to the Ministry of Transportation and Highways, the number of registered vehicles in India stood at 230 million as of March 31, 2016. The increasing number of internal combustion cars is significantly contributing to the air pollution levels of the country which are already woefully high. The problem is even worse in metropolitan cities such as Delhi Mumbai and Bangalore.
To solve this problem, the government automobile companies and battery companies are focusing on developing and deploying electric vehicles in India. These vehicles run on clean energy and drastically reduce the burning of petrol and diesel which is a major contributor to air pollution. These vehicles are also relatively silent and can reduce the noise pollution that is quite prevalent on Indian roads.
However, the adoption of EVs in the country has been far from what was expected when the concept was initially introduced. For a number of reasons, including a lack of charging stations, supporting infrastructure and local battery manufacturing plants, the EV industry has not been able to take-off in the country so far. Another major reason hindering the acceptance of EVs is the lack of awareness among Indians.
How Can Car-Rental Companies Help?
Apart from pollution an inconceivable number of cars on the roads cause congestion unnecessary traffic jams and even collisions. These instances are inconvenient to say the least and fatal in the worst case scenarios. The car rental industry, through its business model, has a major focus on solving these congestion and pollution issues being caused by excessive vehicles in the country. Operating within the shared economy model organizations in this industry focus on optimum utilization of resources, ensuring minimal wastage.
If the congestion curbing car rental model comes together with the environmentally friendly proposition of electric vehicles, it can do wonders for our country. It is for this precise reason that many leading car rental companies are adding sustainable vehicles to their fleets. By doing this, these companies are driving electric mobility in the country while also facilitating faster adoption of electric vehicles.
As car rental companies begin using evs, a large number of indians will be able to gauge the power and potential of these vehicles on indian roads. this will also help them rid the leader in the car rental space. this brings us back to the initial thought. the growth of the car rental industry can definitely be accelerated, given it collaborates with the right partners to achieve optimum disruption.
Aligning The Growth Direction Of The Indian Mobility Space With Evolving Customer Preference
This growth of the car rental industry and the EV space is also aligned with the rapidly changing preferences and sentiments of Indian consumers. Across the country, there is an increased focus on sustainable consumption of resources. While they do want to enjoy quick mobility, they do not want to do so at the cost of the environment. Further, they are also looking for freedom from the hassles of asset ownership. They prefer to rent cars instead of going through the time and cost-intensive purchasing process.
The concepts of shared mobility and electric vehicles thus sit very well with the new age consumer. concerted efforts by leading players in both industries can truly revolutionize the mobility space in the country while catering to these consumer needs. india is thus truly going places cumulatively and sustainably.
Driving The Electric Revolution For Sustainable Mobility
According to the Ministry of Transportation and Highways, the number of registered vehicles in India stood at 230 million as of March 31, 2016. The increasing number of internal combustion cars is significantly contributing to the air pollution levels of the country which are already woefully high. The problem is even worse in metropolitan cities such as Delhi Mumbai and Bangalore.
To solve this problem, the government automobile companies and battery companies are focusing on developing and deploying electric vehicles in India. These vehicles run on clean energy and drastically reduce the burning of petrol and diesel which is a major contributor to air pollution. These vehicles are also relatively silent and can reduce the noise pollution that is quite prevalent on Indian roads.
If the congestion curbing car rental model comes together with the environmentally friendly proposition of electric vehicles it can do wonders for our country
However, the adoption of EVs in the country has been far from what was expected when the concept was initially introduced. For a number of reasons, including a lack of charging stations, supporting infrastructure and local battery manufacturing plants, the EV industry has not been able to take-off in the country so far. Another major reason hindering the acceptance of EVs is the lack of awareness among Indians.
How Can Car-Rental Companies Help?
Apart from pollution an inconceivable number of cars on the roads cause congestion unnecessary traffic jams and even collisions. These instances are inconvenient to say the least and fatal in the worst case scenarios. The car rental industry, through its business model, has a major focus on solving these congestion and pollution issues being caused by excessive vehicles in the country. Operating within the shared economy model organizations in this industry focus on optimum utilization of resources, ensuring minimal wastage.
If the congestion curbing car rental model comes together with the environmentally friendly proposition of electric vehicles, it can do wonders for our country. It is for this precise reason that many leading car rental companies are adding sustainable vehicles to their fleets. By doing this, these companies are driving electric mobility in the country while also facilitating faster adoption of electric vehicles.
As car rental companies begin using evs, a large number of indians will be able to gauge the power and potential of these vehicles on indian roads. this will also help them rid the leader in the car rental space. this brings us back to the initial thought. the growth of the car rental industry can definitely be accelerated, given it collaborates with the right partners to achieve optimum disruption.
Aligning The Growth Direction Of The Indian Mobility Space With Evolving Customer Preference
This growth of the car rental industry and the EV space is also aligned with the rapidly changing preferences and sentiments of Indian consumers. Across the country, there is an increased focus on sustainable consumption of resources. While they do want to enjoy quick mobility, they do not want to do so at the cost of the environment. Further, they are also looking for freedom from the hassles of asset ownership. They prefer to rent cars instead of going through the time and cost-intensive purchasing process.
The concepts of shared mobility and electric vehicles thus sit very well with the new age consumer. concerted efforts by leading players in both industries can truly revolutionize the mobility space in the country while catering to these consumer needs. india is thus truly going places cumulatively and sustainably.
