Car rental industry set to expand to 2.25 lakh vehicles by 2019
According to a top industry official, the segment, which is just 26% of the overall taxi industry, will continue to boom as local governments crack down on emission and congestion.
Chennai: The car rental industry, which has been clocking a top-gear 15% year-on-year growth, is all set to expand its car pool from 1.50 lakh vehicles right now to around 2.25 lakh vehicles by 2019.
According to a top industry official, the segment, which is just 26% of the overall taxi industry, will continue to boom as local governments crack down on emission and congestion.
Rajiv Vij, MD & CEO, Carzonrent said, “The total taxi industry in India currently is a 50,000 crore business. Out of which the car rental industry (including employee transportation) alone comprises around 12,000- 13,000 crore and it has been growing at a 15% clip year on year.”
Largely driven by the boom in hospitality, tourism and aviation, the car rental market is ‘very fragmented’ with a large number of unorganised operators all across India.
But with local authorities cracking down on emission and congestion with tax penalties, the taxi segment – and by extension the car rental business – is expected to continue clocking high growth.
Unlike the passenger vehicle market, which will undoubtedly be stung by the just-imposed infrastructure cess, the car rental business does not expect too much of a pinch. “Typically a rental car runs around 1,00,000 km in three years,” said Vij.
“So even if a premium hatchback sees its price go up by 35,000, when spread over 1,00,000 km it works out to roughly 35p/km which is very miniscule.” The industry, he added, will continue to grow even as it has benefited from the fuel price mark down.
Currently the car rental industry has a modest car pool of around 1.50 lakh vehicles, but this will jump in the next couple of years.
“The industry should see at least a 50% jump in the car pool in the next three years,” said Vij. Already in leadership position in the organized part of car rental industry, Carzonrent has some aggressive plans lined up.
“We want to command at least 27% market share in the car rental business and expand our fleet size to 50,000 cars in the next three years,” said Vij. The company is also looking to expand from 40 cities to 100 cities in that period.
Source: auto.economictimes
Car rental industry set to expand
