For long it has been treated as an untouchable by the automotive industry but the humble taxi and cab is finding lot more suitors than before.
Berated as a segment that damages the brand image of a car like none other, the domestic car industry is now waking up to the potential demand in the taxi and fleet operator segment. With a turnover of Rs 15,000 crore and a 20% growth rate per annum over the last 5 years, it has become a large customer for cars. So much so that a host of manufacturers such as Maruti and Toyota are even willing to manufacture specific models for fleet and radio cab operators.
India’s largest car maker Maruti Suzuki India Ltd has introduced a no-frills version of its entry-level sedan renaming it as Dzire Tour intended specifically for fleet operators."Till a few years back manufacturers were hesitant to see their cars ply as taxis in India but now things have completely changed," said Rajiv K Vij, managing director, Carzonrent. "I don’t think companies have a choice not to participate in this category anymore. They will have to look at it seriously and those who don’t, would lose out on a big growth opportunity."
Numbers form the basis of this change. In 2005, the biggest organised fleet operator in the country had only 1,000 cars. Today the number has swelled to 6,500. The overall industry size has shot up from 150,000 units to 500,000 units in the same time. Still, only 8% of the market is accounted for by organised players, the segment that interests car companies directly. That percentage is set to jump to 30% by 2015 at the cost of the unorganised neighbourhood taxi operator.
“This is a segment that holds tremendous promise and also gives us a steady stream of sales,” said Mayank Pareek, managing executive officer, marketing and sales, Maruti Suzuki India.
“We have a fleet of 1,700 cars that will go up to 7,000 by 2015,” said Sunil Gupta, CEO, Avis India.