Shared mobility industry in India has grown multifold in the Indian market in the last few years. With the arrival of ride-hailing service providers like Uber and Ola, urban areas have witnessed a surge in shared mobility. Apart from that, the car rental service providers too have seen a systematic surge in business, from both corporate and private consumers.
While the pandemic and the lockdowns have created havoc in the car rental industry among others, the global car rental market is expected to grow by $103.75 billion during 2020-2024, according to research by Technavio. The desire to travel without availing the public transport system in the aftermath of the Covid-19 pandemic will drive the growth in the car rental market, expect the industry experts. India too is not different and likely to play a key role in that growth.
Avis India being one of the largest stakeholders in the Indian car rental industry, Autofintechs got in touch with Sunil Gupta, MD & CEO, Avis India to understand more about the current state of the industry and its future in the light of the pandemic. We also discussed how technology is helping the transformation in the industry.
Edited excerpts below.
Q. How challenging has been the Covid-19 pandemic for car rental and leasing industry’s business in India?
When we first started to feel the impact of this pandemic, it was impossible to guess how things might play out. Yes, the travel and car rental industry faced arguably it’s biggest ever challenge and while the future environment remains uncertain, what is becoming increasingly clear is Avis India’s ability to adapt, react, and thrive through adversity.
In the second quarter, we mitigated the impact of an unprecedented decline in travel, and in the third quarter, we’ve begun to show what our business is capable of as travel returns.
Q. With the reopening of the economy how has been the revival trajectory for the car rental and leasing industry in India?
Many consumers are turning to car rental as an affordable, safe, private, and flexible alternative to public transport and car-pooling. In the last couple of months, the car rental and leasing industry experienced an exponential spike in demand as the economy began to reopen. The rental companies have also shifted online to provide a quick, streamlined, and hassle-free buying process, thus aiding in subscription sales.
Q. With the growing preference towards personal mobility in the wake of the pandemic, is the trend affecting car rental and leasing? Can you put some light on the current situation?
Covid-19 pandemic changed the dynamics of our economy indeed. If we talk about car rental or leasing services, it isn’t a new concept in India.
The shift towards car subscription or leasing services accelerated due to the coronavirus pandemic outbreak. Rising awareness about health and hygiene among commuters is steering them to opt for personal mobility over public transport. Also, for many buying a brand new car isn’t feasible in the current situation.
In such a scenario, car rental or leasing is simply the most affordable and quickest way of acquiring a car which is also a safe personal mobility option. In fact, the car rental industry in India is prophesied to be worth ₹1,000 billion by 2022. Therefore, we anticipate this trend will continue to rise in the foreseeable future.
Q. Post-pandemic, the global car rental market is expected to grow by $103.75 billion during 2020-2024, as per research. What could be India’s role in this growth story?
The pandemic has triggered a shift. In India, people are moving to subscription-based ownership and this is likely to change the car-ownership landscape in the country. Also, in the current situation where people are hesitant to opt for public transport, car rental mobility services fulfil the very crucial need for personal transportation. Plus, in a rapidly growing and urbanizing economy like ours, this becomes even more critical.
Except for the disruption caused by Covid-19, it is safe to assume that the mobility industry growth in India would be 1.5 times the GDP growth. The other feature of the industry is that it is getting more and more corporatized. The share of organized sector players has been steadily increasing due to the quality and reliability they offer and digital interactions becoming more relevant to customers.
Hence, India will play a pivotal role in the growth of the car rental sector not only domestically but also across the globe. In fact, a recent report also reveals that Indians top the list of most eager people who wish to travel internationally in the next 12 months; 77% of Indians responded they are keen to travel, followed by Thais (70%) and Indonesians (60%).
Q. How Avis is using car rental management software to increase the efficiency of the service?
Avis India is making the best use of all the latest technologies to provide enhanced services to its customers.
AVIS’ CarPro web-based application (which is used for creating reservations, rental agreements, managing fleet, and generating invoices) is one of the major drivers behind the company’s success.
Another application which works closely with the CarPro is the Electronic Rental Agreement (eRA). The rental agreement created in CarPro is sent in the electronic form to the mobile handsets of chauffeurs through API. Subsequently, chauffeurs perform their duties as per details mentioned in eRA.
Leveraging data, we track the age and performance of cars. At AVIS, we believe in quality and service, which is why we make sure our customers experience new or nearly new cars when they choose to rent with us. Further, based on historical data of each car model, we are also able to predict the maintenance cost for cars.
An added aspect is when a car comes with connected devices from the OEMs. In this scenario, data helps in delivering information to the fleet owner — from the petrol level to tyre pressure, to when the car is due to be maintained. Behind the scenes, Asterisk is used to manage voice calls.
Q. In order to boost the car rental and leasing program, what are the expansion strategies Avis is taking? Is there any collaboration with any auto OEM on the card? Can you put some light on the strategy?
At Avis India, we are committed to meet our customers’ changing mobility needs. Currently, customers want reassurance about renting, owing to safety concerns due to the Covid-19 pandemic. This is something that we are relentlessly working on – to provide the best possible mobility experience with a focus on health and safety to all our customers, employees, and chauffeurs.
For customers, especially officer-goers, Avis Secure Shuttle, provides a point-to-point mobility service for both pick-up and drop-off.
In addition to Shuttle services, we have also launched AVIS Flexi 12, which allows customers to rent a brand new car for at least a period of 12 months. It includes maintenance, servicing and tyre repair. Customers can also enjoy pick and drop facilities, replacement of the car, stay new plan along with 24/7 Emergency Roadside Assistance and Avis connect through an online portal.
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