Owning Car in India...

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How car ownership is changing rapidly and irreversibly in

India
BY MALINI GOYAL, ET BUREAU | OCT 20, 2018, 11.00 PM IST Post a Comment
Ashish Kulkarni, 36, still remembers. In 2006, newly-married and in his first job, he bought
his first car — a Hyundai Santro. It was a step-up. “We both love driving. We were
excited,” he says, referring to his wife Swathi.
The Santro made their daily commute comfortable in Bengaluru. In 2018, some things
have changed and some remain the same. He is older and richer, father of two children
and remains passionate about driving.
In 2015, the family upgraded to a Volkswagen Vento. But Bengaluru isn’t the city it was a
decade ago. Traffic congestion has multiplied. His 25 km daily commute can take over two
hours. So, instead of personal cars, the couple’s daily commute has acquired multiple
Last year, when industrialist Anand Mahindra and
hues. Maruti Suzuki Chairman RC Bhargava expressed
fears about young Indians not buying cars, in a way
they acknowledged this trend.
Three days in a week, he cycles to work. Good for health, pocket and takes just 75
minutes, he says. On other days, he shuffles between Ola/Uber, a bike-taxi-and-metrorail EXPAND
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combination, or just uses carpool app QuickRide. His wife Swathi’s commute patterns look
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similar, except for cycling. Maruti Suzuki
-129.15 (-1.88%)
“Vento is for our weekend getaways. With good highways, we even drive to Pune or
Mahindra 22.95 (1.95%)
Hyderabad to visit parents,” says Kulkarni.
Meanwhile, his cycling passion has caught on.
Big Change:
Inspired, at least five people in his network now cycle The end of Five-Year Plans: All you need to know
to work.
The tectonic shifts reshaping the global auto industry and car ownership and usage patterns
globally are beginning to be felt in India as well, thanks to rising traffic congestion and commute
times, growing coverage of public transport and ubiquity of cabhailing and ride-pooling options. And
this is even before the big coming disruptions — electric vehicles and autonomous mobility — have
begun to make their presence felt.
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What is surprising is the pace of adoption of the new mobility patterns. This means automakers must quickly manoeuver for a previously
unfathomable future where every Indian family that can afford a car won’t necessarily buy one. Developed markets like the US and
Europe are already in the middle of this shift.
“In cities like New York and San Francisco, almost half the residents today do not own cars,” said Michael Dunne, CEO of Chinese auto
consultancy ZoZo Go. Germans (under 25) getting driving licences has slid 28% within a decade. One car-sharing vehicle is estimated
to replace at least three privately-owned ones.
These structural shifts will hurt sales. Berylls Strategy Advisors, a consultancy firm, estimates that by 2030, car sales in the US will fall
almost 12% to 15.1 million. Global auto giants are scurrying to hedge their bets. GM has invested in Lyft, Toyota in Grab. BMW has a
ride-hailing, carsharing service called DriveNow.
“Working from home and easier and cheaper options like Uber means car ownership is no longer a priority in developed countries,” says
Felipe Munoz, global analyst at auto market research firm JATO. The assumption was this storm will take time to reach Indian shores.
After all, India’s Motown is just getting started.
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With per capita income of $2,134, India sells over 3 million cars annually and has over 50 motor vehicles per 1,000 people as against
say China that has $7,329 per capita income, sells over 24 million cars annually and has 231 motor vehicles per 1,000.
The coming storm is closer than Motown India thinks. Last year, when industrialist Anand Mahindra and Maruti Suzuki Chairman RC
Bhargava expressed fears about young Indians not buying cars, in a way they acknowledged this trend.
“While the timing of this change is difficult to predict, OEMs are very conscious from a directional perspective,” says Rakesh Batra,
partner, EY. India’s sales growth has been losing momentum. Around 2016, experts forecast India to cross 5 million cars by 2020. But
passenger vehicle sales grew just 28% between 2013-14 (2.5 million) and 2017-18 (3.2 million). And sales have dipped for the third
month in a row in September 2018.
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In big cities, among the upwardly mobile and aspirational class, the trend is already playing out. A combination of factors — more than
400 million millennials, lifestyle shift, pollution concerns, traffic congestion, long commute, steep parking fees, metro rail (operational or
being built in eight cities) and emergence of new app-based mobility solutions — is reshaping how Indians buy, own and use their cars.
For the last four years, Roland Berger, a consultancy firm, has released an index called Automotive Disruption Radar, which tracks how
new mobility technologies are disrupting the industry. “India is in line with what we see elsewhere. There is very high openness to trying
new approaches here and not be tied to the traditional ways,” says Wilfried G Aulbur, senior partner, Roland Berger.
Millennials like Snigdha Lal, 24, are leading the wave. The IIT-Mumbai graduate landed a well-paying job with a consulting firm in
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Gurgaon. She lived well, sharing an upscale fourbedroom apartment with her friends. Eating out, shopping for branded clothes and
holidays to Europe were frequent. Once, she and her friends hired a yacht to celebrate her birthday. But buying a car was never on the
cards, thanks to Ola/Uber, metro and Zoomcar.
“I didn’t want to block my money or tie myself down buying a car,” she says. Hyderabad-based Ganesh Shanker, 30, works for a digital
MNC. On weekdays, amid long work hours and with office pickup and drop available, he doesn’t need a car. On weekends, Ola/Uber
works well. For long drives, he prefers the “hasslefree and cost effective option” of renting from Zoomcar’s stable.
“Social barriers are breaking. My friends who could not think of getting off their Mercedes are happily taking Ola-Uber,” says Chetan
Maini, cofounder, Sun Mobility. Till recently, Sachin Bhatia, 46, cofounder of Makemytrip and dating app Trulymadly, shuttled between
Bali (where his family lived) and Gurgaon.
In India, he owned a Volkswagen Polo hatchback for weekend chores but for weekday meetings he hired cabs. He didn’t need a driver
and never had to worry about parking. Mumbai-based Sangeeta Menon, 44, the mother of a teenager, lives with her mom and husband.
Earlier, the family had two cars — a Skoda Laura and a Zen Estilo — and employed a driver.
“We realised my parents were barely using the Estilo or the driver,” she says. Now the family has just one car — a Jeep Compass that is
mostly used for long weekend drives. “We mostly use Ola/Uber even for my mom. It works great,” she says.
Not too far away, digital consultant Dhruv Chopra, 39 is giving his love affair with cars a new twist. Once, an owner of Mercedes CClass
he now just has an old barely-driven Maruti SX4. The ownership maths - spending more than Rs 3,000 a day (not counting fuel) — just
didn’t make sense to him.
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“Through ads, Motown sells you this utopian dream of driving a fancy car, experiencing freedom, speeding away on nice & clear roads,
breathing fresh air. In clogged metros, the reality is very different.” There are reasons why aspirational Indians in big cities are exploring
new mobility solutions.
Surging traffic, congested roads, long commutes and parking headaches make life difficult. In Delhi, the worst affected, authorised car
parking spaces is in the ratio of 1:100. A slightly dated IBM Parking Global Index (released in 2011) ranks Delhi as the worst city in
terms of parking experience.
“Things would have only worsened now,” says Rasik Pansare, cofounder, Getmyparking.com. In five years, parking fee has risen from
Rs 20 for four hours to Rs 20 per hour today. In varying degree, this nightmare is playing out in other big cities. In Bengaluru, Kulkarni
says, a 45 minute commute 10 years back now easily takes 120-plus minutes.
“Our city planning is flawed,” says Madhav Pai, India director at the World Resources Institute. In Delhi and Mumbai, under 10% of the
population use cars, but all policy planning focuses on them. Most mega modern cities are reinventing themselves.
New York has been redesigning to allow spaces for walking, biking and lounging and has added 400 miles of bike lanes over the last
decade. Helsinki, which wants to make car ownership redundant, has rolled out an app called Whim, which offers multiple mobility
options (bus, train, bicycle, taxi, car sharing) via a monthly subscription.
A slew of factors is now nudging both Indian consumers and policymakers to rethink. Feedback Infra Chairman Vinayak Chatterjee says
the new Metro Rail Policy with its thrust on creating a Unified Metropolitan Transport Authority that factors in multi-modal transport is a
turning point for metro mobility.
“Unlike China with infra overcapacity, in India demand precedes supply. India will have its own evolution curve,” says Amit Singh,
cofounder, Shuttl, a bus-pool service. A slew of shared mobility providers — Vogo Rentals, Yulu, Ola Pedal, Rapido and Bounce — are
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entering the fray.
Being price sensitive, Indians have a high propensity to experiment if price

points are attractive, says Maini. Gre g Moran’s Zoomcar started in 2013 and
today has 6,000 cars in 38 cities. People under 30 are its biggest customer
segment. “It’s not about money but convenience and flexibility. For the young,
experience is more important than ownership. We are growing well,” Moran
says.
Cab-hailing apps, too, are doing well — from one million in 2015, Ola and
Uber log 3.5 million daily rides today, according to industry analysts. “Cars and
cabs solve problems for barely 10% of India’s commuters. Others have no
options,” says Shuttl’s Singh.
Shuttl, which started in 2015, today does 55,000 rides per day in Delhi and
Kolkata with 1,000 buses and hopes to grow 10-fold and expand to 10 cities
by 2020. Last-mile connectivity, the biggest bottleneck, is seeing new entrants
from bike taxis to e-rickshaws.
Scooter sharing startup Vogo rolled out its services in 2016, has 1,000
scooters and is present in Bengaluru and Hyderabad. By 2020, it hopes to
have 500,000 vehicles doing a million rides a day. While India will still have
millions for whom buying cars will remain aspirational, increasingly, for the
welloff, upwardly mobile, the charm is waning.
In the digital era, expect them to evince behavioural patterns of the West far earlier in the income/consumption curve. “Major car MNCs
are redefining their business around mobility rather than just selling cars,” says US-based Harvard Business School professor Willy
Shih. Motown India might do well to factor this as part of their strategy for the subcontinent.
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How car ownership is changing rapidly and irreversibly in India - The Economic Times https://economictimes.indiatimes.com/industry/auto/auto-news/how-car-ownership-is-changing-rapid...

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How car ownership is changing rapidly and irreversibly in

similar, except for cycling. Maruti Suzuki

entering the fray.

Being price sensitive, Indians have a high propensity to experiment if price

Live Market Industry About Us

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Home Loan Calculator RCom

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Yes Bank Video Datsun Go, GO+ booking

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