[vinit.merchant]

Manufacturers will now try everything to sell as many of their existing car line up as possible. They will not be worried about the taxi image. Why? Most of these cars will go off the shelf by 2019 when the new crash test rules become applicable for the existing car line up, and these cars will fail miserably.

Taxi segment is not seeing growth for the first time that the Hyundais & Marutis are opening their eyes now. It started with the boom in the service sector/IT/Outsourcing boom around 10-12 years back, providing pick up & drops to its employees. Indica's stole that show, but has not been able to keep up with it. Indica got its taxi image from here. The employees got damn bored riding in the same white Indica everyday morning & evening. What they did not realise is that Indica's provided the best comfort and were the most spacious, until the Ritz came into picture. Suddenly they started preferring the Tata's.

Nevertheless, according to me, the reason for the aggressive marketing of the old cars + some of the new one's to the taxi fleet is the rule of compliance with the passing of crast test. 2017 for new models and 2019 for existing models.
The old cars marketed to taxi fleet are anyways due for replacement and the newer models being marketed would either be sales duds or would not pass the crash test criteria.

[aditya9567]

The objective of Uber, Ola, Zoom, Myles etc., IMO is to discourage private car ownership. These days, we see a noticeable shift in AT ownership in the cities due to the added convenience and the highest level of convenience is being driven around. Add to that increasing amounts of traffic, parking cost and issues, high depreciation on cars, owning and operating a car is becoming increasingly difficult.

A large majority of the population, unlike us, do not enjoy driving and look at cars for their functional value. Up until now, car sales were aided by a lack of economical and sustainable options which is not the case today. Day to day transport can be taken care of by cabs (which are not very expensive) and for the occasional weekend trip, there are self drive options. However, a car brings social value to people in India and unless this goes down (which IMO won't for a long time), private car ownership will never die down. But what the new trend will do is dissuade people from owning more than one car.

This clearly showcases the increasing importance of the taxi segment in India and why manufacturers should not neglect it. It's kind of a vicious circle, more people preferring cabs --> more competition in the taxi space --> better service and options for the consumers --> more people preferring cabs.

Cheers

[GeneralJazz]

True owning a car used to be a prestige issue. Bigger the car, better the image. Compact sedans were born just to cater to the image conscious Indian society. A car with a 'dicky', no matter how small or idiotic it looks (read Dzire), is preferred over a hatchback. CS segments brought down the prices of sedans(for lack of a better word, notchback maybe?) for the common man. But this trend is slowly changing. Youngsters prefer taxis over driving. Especially youth in the IT sector. Most IT parks are so congested, driving has turned into a headache. Youngsters take bikes to work but in a few years they switch to taxis. Maintaining a car in the garage just for that odd weekend drive is too much of a hassle. As our cities get more congested, the taxi segment will grow exponentially.

[i74js]

The app based cab models - Uber as well as Ola are not sustainable as the companies are loosing money for every ride taken by customer. We are therefore finding Uber to be cheaper instead of having own car.

The prices will have to bounce back and then we will have to relook at the model of using cabs / taxies instead of owning a car. Uber has used this model in several regions and now their cabs are slightly costlier than standard taxis. One can expect this in India in may be a year or two form now.

Cheers

[GTO]

Link to full article - Putting some numbers to the news.

Maruti Suzuki's sales to the taxi and fleet segment grew to 75,500 units in 2015-16, to 6.5 per cent of sales against four per cent in FY15.

Hyundai, second-largest carmaker, in the country, has established teams to cater to only the fleet segment. Its sales here grew to 7,900 units in 2015. In the 2016 calendar year, the company has set an aggressive target to sell 20,000 units here.

Against a five per cent overall sales growth, the taxi segment grew 65 per cent to 30,760 units for Toyota, to account for 22 per cent of sales.

[volkman10]

Maruti Suzuki, Tata Motors, Mahindra & Mahindra (M&M), Toyota and Nissan say demand from cab aggregators — mainly Uber and local rival Ola — accounts for 8-10% of retail sales and is expected to double in the current fiscal!



Maruti Suzuki sold over 90,000 cars to cab aggregators between April and March 2017, accounting for nearly 10% of its retail sales. Hyundai, the second largest carmaker, sold over 30,000 cars to cab aggregators in 2016 and expects a 200% growth in 2017.

Carmakers are customising and branding vehicles differently from those meant for the aspirational buyer - Hyundai’s Grand i10 and Xcent are branded as the ‘Prime’ series for cab firms. When Toyota launched the Etios and Liva ‘Platinum’ series for the individual customer, the older variant with base frills was sold to aggregators.
Maruti Suzuki's Dzire Tour too is marketed specifically for taxi segment.

Considering that car ownership is only about 20 for 1,000 people — as against 800 for 1,000 people in the US — there is abundant scope for growth. While consumers either deferring or deciding against a car purchase in favour of riding with cab firms is an inevitability, carmakers now offset that loss in demand with supply to aggregators

Link

[ashis89]

Recently, while I was in a Beat (D)cab, I got into a conversation with the driver about the market condition. He told me that their business is falling steadily every passing day. He said that with the number of cabs increasing income/trips per cab has fallen a lot. Add to that the app-based operators have reduced or stopped the incentives which is further adding to the burden on these new taxi owners. Many of them are unable to repay the installments and the cars are getting seized by the banks.

According to him, there are already 100+ cars seized Secunderabad area which are less than a year old and will be auctioned later. Sales of taxi models will come down once these "old" cars hit the market. Since the taxi business are not lucrative anymore, sales will dwindle even further. I am not sure how accurate his statements are and hence, won't believe him blindly. But he said, he was yet to make 1k after driving for 10 hrs. If this is true, then he might be right.

I had heard similar cribbing from 2-3 other cab drivers while I in Gurgaon earlier this month.

[ashis89]

Originally Posted by ashis89

Recently, while I was in a Beat (D)cab, I got into a conversation with the driver about the market condition. He told me that their business is falling steadily every passing day. He said that with the number of cabs increasing income/trips per cab has fallen a lot. Add to that the app-based operators have reduced or stopped the incentives which is further adding to the burden on these new taxi owners. Many of them are unable to repay the installments and the cars are getting seized by the banks.

The driver was right though his numbers might be wrong. Economic Times has reported that high default rate by these cab drivers has forced banks to stop giving loans in certain areas such as Bangalore.

http://economictimes.indiatimes.com/...w/58351691.cms