[LPJ777]

Hello to all my fellow TBhpians.

I'm an entrepreneur and petrolhead based in Bengaluru. One of my primary business ventures focuses on travel and tourism. Being a keen petrolhead, I have toyed with the idea of setting up a luxury car rental business for years. Finally, I am ready to dip my toes into it within the next couple of months.

I understand that India is not an easy market to operate in compared to Dubai, the UK or the US. However, I see the conventional players in the market (The large chauffeur driven service providers and the wedding rental service providers doing well). There are a few select operators who do offer self-drive options but I don't see any that are exceptionally good.

I have feeling that most of you would deter me from going into this primarily highlighting the risks however, my thought process is that if the market has enough players who are growing and are successful then I see no reason to not enter and grab a piece of this cake.

To start with I would prefer to focus on chauffeur driven vehicles because self-drive rental is significantly more risky but highly rewarding if you have right cars and the right clientele but I will look at it later.

I have VVIP guests for whom I manage end to end transportation and almost always, it's been a pain to arrange for a suitable luxury sedan or SUV for these guests as the current inventory in the market are not in the best shape or come with conditions that are in conflict with my clients' preferences which is also one of the reasons why I want to have my own fleet to cater to these clients apart from offering the same to a larger client base.

Here are some of the questions for which I am seeking answers for:

1) Planning to start in Bengaluru first, any specific things to keep in mind with regard to the local market here?

2) Primary services will be airport transfers, city transfers, outstation trips, corporate events, weddings, promotions, short-term leases etc. - Am I missing a potential market-segment ?

3) Planning to start with 2-3 vehicles (ideally a Vellfire + S Class with a Maybach Kit + G400D / Defender 130 / Q7) - Do you have other suggestions? I would like to differentiate myself from the market and offer cars that are exclusive as much as possible thereby offering a niche selection. I prefer SUVs over sedans because Bangalore roads can get really bad and I don't the vehicle underbody to scratch or scrape.

4) Does it make sense to buy a service pack or just extended warranty would suffice from the dealer? Any pointers while negotiating with dealers? All cars will be purchased brand-new.

5) White or Black or Dual-tone? I have seen cars mostly in White or Black or should I go for a unique color that stands out and also in line with the branding.

6) Planning to keep the cars for 5 years minimum. Does it make sense to upgrade every 5 years or buy new cars and keep the older cars for lower priced trips for the remainder of their usable life?

7) Is it possible to negotiate insurance terms such as enhanced coverage with zero deductibles at a competitive premium?

8) Does an experience center help? I also have a furniture retail business being setup in the city and I am planning to setup a mini experience center alongside the same where potential customers can come experience the cars before they book it for an upcoming event or ride.

9) Planning to do PPF on all cars? Is this advisable or is there a better solutions to protect the car exteriors?

10) Would professional woman chauffeurs add value? (Looking to offer female chauffeurs for select clients (women and children only traveling without a male escort)

11) Does it make sense to also offer services in nearby cities by flatbedding or driving the cars over for specific rides (Chennai, Hyderabad, Mangalore, Kochi etc.) - Recently I brought down a GLS350D from Hyderabad for client and so I know from experience that it's doable.

12) Am I missing something super important?

Eventually I would like to add Bentleys and Rolls-Royces (Brand new) based on demand and also how quickly the business takes off. I don't mind offering cars to celebrities, business owners, politicians etc. on short leases wherein they care write off the lease an as expense while still being able to indulge themselves.


I would love to hear thoughts and inputs on how could I do this better?

Thanks in advance,

Regards,
LPJ777

[dailydriver]

Excellent business from the prospective clients' perspective. Rich folks travelling to the city will be happy to be chauffeured around in luxury cars for a cost. But will that be a profitable business for you too is a question that only you can decide.

Bengaluru does have such services; the one run by Mr. Ramesh Babu being a good example. Perhaps a candid talk with him could give you the required clarity.

Ramesh has a fleet of luxury vehicles including Mercedes-Benz, BMWs, etc. in his car rental business

...entrepreneur runs Ramesh Tours and Travels in Bangalore and owns around 400 cars, out of which 120 are luxury vehicles. He has Mercedes Benz S Class, Mercedes Benz E Class, BMW 7 Series, Audi A3 Convertible, Audi A 7 & A 6, Jaguar XF, Ford Mustang GT and many other luxury cars in his fleet, all of which he provides on rent

Link

[GTO]

Originally Posted by LPJ777

I have VVIP guests for whom I manage end to end transportation and almost always, it's been a pain to arrange for a suitable luxury sedan or SUV for these guests as the current inventory in the market are not in the best shape or come with conditions that are in conflict with my clients' preferences which is also one of the reasons why I want to have my own fleet to cater to these clients apart from offering the same to a larger client base.

This is really the key point = you have a ready, captive audience for your services. If this wasn't the case, I'd tell you not to bother as the competition from established brands is high.

But since you are already offering high-end services to your VVIP guests, it makes absolute sense to add an ancillary service & profit from it.

- Vellfire - great choice.

- S-Class - again, a great choice. Also consider the LWB E-Class if its acceptable to your VVIP customers. BMW 7-Series as well due to the brand's reliability.

- Avoid Defender due to unreliable nature & downtime.

- You should seriously explore buying pre-owned 3 - 5 year old cars too, and keep them in top shape from a great independent garage. Cars like the S-Class can run forever with the right maintenance.

- White colour as it's the most neutral and no customer will ever have a problem with it.

- Keep the cars for as long as they are running reliably. BMW is king of reliability in the luxury segment (along with Lexus, of course).

- Great idea of female chauffeurs! That will be a great USP. But even otherwise, invest in the best male / female chauffeurs you can find. Keep training them. They are the difference between a happy or unhappy customer for you, and a well-maintained or abused car.

[m8002?]

Don't the Leela/Taj/Marriot have their own luxury cars for guests?

If you are already offering them other services, then a luxury car as an add-on/top-up seems like a very good idea.

[ike]

Originally Posted by LPJ777

I have VVIP guests for whom I manage end to end transportation and almost always, it's been a pain to arrange for a suitable luxury sedan or SUV for these guests as the current inventory in the market are not in the best shape or come with conditions that are in conflict with my clients' preferences which is also one of the reasons why I want to have my own fleet to cater to these clients apart from offering the same to a larger client base.

Do you have corporate clientele that are visiting their Bangalore locations from overseas? I have no experience with this business but I'd get an EV as well for those trying to project an environmentalist image. The organization I work for is one of the largest in the oil and gas sector but of late, the leadership visiting from onshore were seen in EVs, an MG ZS first and a BYD next. These are the same people who used to be driven around in Mercs earlier. We also are switching to EVs for staff transport but that is besides the point.

Women Chauffeurs is a great idea and I'm sure proponents of diversity and inclusion would be very tempted to go for it I think.

[LPJ777]

Originally Posted by dailydriver

Excellent business from the prospective clients' perspective. Rich folks travelling to the city will be happy to be chauffeured around in luxury cars for a cost. But will that be a profitable business for you too is a question that only you can decide.

Bengaluru does have such services; the one run by Mr. Ramesh Babu being a good example. Perhaps a candid talk with him could give you the required clarity.

Link

I don't know him personally but every time I have reached out to his company on behalf of my clients, it's been absolutely unprofessional. They drag their feet and I felt maybe they are doing too well to the point, they don't care for new genuine leads. But if I get an opportunity, I would love to pick Mr. Ramesh's brain.

Originally Posted by GTO

This is really the key point = you have a ready, captive audience for your services. If this wasn't the case, I'd tell you not to bother as the competition from established brands is high.

The VVIP movement at present is growing but is not big enough to invest in a dedicated fleet just focusing on their requirements. I completely understand that the competition is high and there are many players. My intention is to disrupt by offering niche cars, niche services and build a loyal clientele base. If I can carve out a market segment for myself, then why not. At the end of the day, I wouldn't want to be one among many have the same fleet (Ex. multiple vendors have S-Classes, 7ers, E-Classes, GLSes etc. say for an airport transfer but how many would offer a G-Class instead?)

But since you are already offering high-end services to your VVIP guests, it makes absolute sense to add an ancillary service & profit from it.

- Vellfire - great choice.

- S-Class - again, a great choice. Also consider the LWB E-Class if its acceptable to your VVIP customers. BMW 7-Series as well due to the brand's reliability.

- Avoid Defender due to unreliable nature & downtime.

- You should seriously explore buying pre-owned 3 - 5 year old cars too, and keep them in top shape from a great independent garage. Cars like the S-Class can run forever with the right maintenance.

- White colour as it's the most neutral and no customer will ever have a problem with it.

- Keep the cars for as long as they are running reliably. BMW is king of reliability in the luxury segment (along with Lexus, of course).

- Great idea of female chauffeurs! That will be a great USP. But even otherwise, invest in the best male / female chauffeurs you can find. Keep training them. They are the difference between a happy or unhappy customer for you, and a well-maintained or abused car.

Any leads on where I could find a potential pool of talented Chauffeurs? Looking for within the Industry is one option but are their alternatives?

I never considered BMWs because I have seen that clients tend to prefer the 3 pointed star over any other European brands unless they really love a BMW or an Audi or a Jaguar over a Mercedes Benz. But I am open to looking at it. Maybe a X7. If it's a Lexus, it has to be a LX and but given the current on-road costs, I am not sure if it will pull in as much business when compared to a GLS? But I am pretty sure the LX will outlive the GLS at least hypothetically speaking.

Originally Posted by m8002?

Don't the Leela/Taj/Marriot have their own luxury cars for guests?

If you are already offering them other services, then a luxury car as an add-on/top-up seems like a very good idea.

Originally Posted by ike

Do you have corporate clientele that are visiting their Bangalore locations from overseas? I have no experience with this business but I'd get an EV as well for those trying to project an environmentalist image. The organization I work for is one of the largest in the oil and gas sector but of late, the leadership visiting from onshore were seen in EVs, an MG ZS first and a BYD next. These are the same people who used to be driven around in Mercs earlier. We also are switching to EVs for staff transport but that is besides the point.

I have thought of EVs but parked the idea thinking that it may pose a challenge if there comes along major outstation trips wherein charging can be become cumbersome, range-anxiety etc. I personally use Shoffr's BYD E6 for my airport transfers in BLR and since you talked about EVs, I can relook at it again.

Women Chauffeurs is a great idea and I'm sure proponents of diversity and inclusion would be very tempted to go for it I think.

Yes, indeed. I am sure it can be a win win for both the business and it's patrons.

[stantheman]

Originally Posted by LPJ777

5) White or Black or Dual-tone? I have seen cars mostly in White or Black or should I go for a unique color that stands out and also in line with the branding.

I would say on top of what @GTO mentioned, mostly white but also 1 black. Many of my business acquaintances prefer black over white for look. White is neutral but black looks a little exclusive.

Originally Posted by LPJ777

7) Is it possible to negotiate insurance terms such as enhanced coverage with zero deductibles at a competitive premium?

Absolutely, I suggest reaching directly with insurers for a preferential rate since you would require more than just a regular insurance, plus it would cost quite a bit to insure these vehicles. So saving even few percentages would amount to a huge cost saving. (I know a head of marketing of our insurance partner will ask if he is open to sharing his contact here).

Originally Posted by LPJ777

8) Does an experience center help? I also have a furniture retail business being setup in the city and I am planning to setup a mini experience center alongside the same where potential customers can come experience the cars before they book it for an upcoming event or ride.

Definitely, though I have seen far too many VIP's prefer something that isn't available to everyone. So may be an experience center that shows the class but doesnt actually let you experience? (oxymoronic I know but go figure.)

Originally Posted by LPJ777

10) Would professional woman chauffeurs add value? (Looking to offer female chauffeurs for select clients (women and children only traveling without a male escort)

This would definitely help in appealing to a large strata of clientele. Who are arranging for their families.

[FocusAssist]

All the best for your journey, my 2 cents

1) Check if there is an wet lease option to try things out 1st. As you get the MVP done right capex can be done accordingly. It will be a good primer to decide on the cars.
2) EVs - EQS/i7 could be a good option
3) I think for the customers you are looking at - many of them will want to feel extremely special, but not attract public attention. So, a defender might be not the right car, but a GLS might be just right

Hope to see your cars plying on the road soon!

[chaotic]

I think you are on to something LPJ777 and Bengaluru could be a great market to start.

Here are my thoughts-

Originally Posted by LPJ777

2) Primary services will be airport transfers, city transfers, outstation trips, corporate events, weddings, promotions, short-term leases etc. - Am I missing a potential market-segment ?

How about adding evening-car service as well? Essentially providing service for a couple of hours (usually evenings) to allow people to travel and arrive in style at a restaurant or event. Very much like Limo services in the west.

Originally Posted by LPJ777

3) Planning to start with 2-3 vehicles (ideally a Vellfire + S Class with a Maybach Kit + G400D / Defender 130 / Q7) - Do you have other suggestions? I would like to differentiate myself from the market and offer cars that are exclusive as much as possible thereby offering a niche selection. I prefer SUVs over sedans because Bangalore roads can get really bad and I don't the vehicle underbody to scratch or scrape.

Instead of a Defender, would suggest covering all 3 German badges in the garage. So, a BMW 7-series along with an Audi A8; or perhaps X7 and Q8 as you prefer SUVs.

Originally Posted by LPJ777

5) White or Black or Dual-tone? I have seen cars mostly in White or Black or should I go for a unique color that stands out and also in line with the branding.

I would suggest all black (even though it is cliched). The appeal for luxury rentals is in their appearance as personal/exclusive. White cars are usually associated with cabs and hence not as exclusive. A unique colour or any obvious branding will also go against the image that people wish to portray. I would suggest black cars with extremely subtle exterior branding.

Originally Posted by LPJ777

10) Would professional woman chauffeurs add value? (Looking to offer female chauffeurs for select clients (women and children only traveling without a male escort)

This could be a great USP.
While on the topic of chauffeurs - please plan to invest in them. To keep up the luxury experience, would be great to have them dressed as 'business professionals' and not as cab drivers. Thus, tailored grey/brown suits for men and women without headgear could go a long way.

Your car selection and future plans point towards the top of the luxury market and i've given suggestions accordingly. I think this market is only served by the large hotel chains today and you could easily avoid competition from other players who have expensive cars but not the luxury experience to go with them.

Good luck!

[blackwasp]

Originally Posted by LPJ777

Hello to all my fellow TBhpians.

I'm an entrepreneur and petrolhead based in Bengaluru.

All the very best for your enterprise. Let me answer your queries in short.

Here are some of the questions for which I am seeking answers for:

1) Planning to start in Bengaluru first, any specific things to keep in mind with regard to the local market here?

Always better to start in a metro city as you have a wider range of clients.

2) Primary services will be airport transfers, city transfers, outstation trips, corporate events, weddings, promotions, short-term leases etc. - Am I missing a potential market-segment ?

You will first need to network around and check out the current demand for such services in your city and how you can differentiate yourself from the market.

Premium customers who will rent an S-Class will be very less in number.

3) Planning to start with 2-3 vehicles (ideally a Vellfire + S Class with a Maybach Kit + G400D / Defender 130 / Q7) - Do you have other suggestions? I would like to differentiate myself from the market and offer cars that are exclusive as much as possible thereby offering a niche selection. I prefer SUVs over sedans because Bangalore roads can get really bad and I don't the vehicle underbody to scratch or scrape.

Vellfire and S-Class is a good idea.

4) Does it make sense to buy a service pack or just extended warranty would suffice from the dealer? Any pointers while negotiating with dealers? All cars will be purchased brand-new.

Always go for brand new cars, retain them till you get zero-rep insurance. Sell them at the 5-year mark.

5) White or Black or Dual-tone? I have seen cars mostly in White or Black or should I go for a unique color that stands out and also in line with the branding.

Keep mostly white, with a couple in black as your fleet expands.

6) Planning to keep the cars for 5 years minimum. Does it make sense to upgrade every 5 years or buy new cars and keep the older cars for lower priced trips for the remainder of their usable life?

Incase of any mishap, you need maximum coverage. Commercial cars get zero dep insurance for 5 years or less (IIRC). Keep them till you get zero dep, sell them after that.

7) Is it possible to negotiate insurance terms such as enhanced coverage with zero deductibles at a competitive premium?

Compared to private cars, the commercial car insurance is much higher. But that said, you can negotiate for a bulk deal.

8) Does an experience center help? I also have a furniture retail business being setup in the city and I am planning to setup a mini experience center alongside the same where potential customers can come experience the cars before they book it for an upcoming event or ride.

I highly doubt someone renting and S-class would be least interested in experiencing the car. However, you can use the experience centre to showcase the cars to people who would otherwise not have access to these cars. Eg. say a 1 hour ride for a much lower price when you have no bookings.

9) Planning to do PPF on all cars? Is this advisable or is there a better solutions to protect the car exteriors?

Yes, PPF will be a life saver. Any car upwards of 20L will see much higher benefit. Also commercial vehicles will run more as well.

10) Would professional woman chauffeurs add value? (Looking to offer female chauffeurs for select clients (women and children only traveling without a male escort)

Yes, this is a good niche to have. However, you will need to find a willing person to work. There are a few women drivers, but since 2019, I've not been able to find one for my cabs. Bluesmart has recently said they want over 1000 women drivers for their cabs, and are working with the government skills institutes to train them. Might be worth checking it out.

11) Does it make sense to also offer services in nearby cities by flatbedding or driving the cars over for specific rides (Chennai, Hyderabad, Mangalore, Kochi etc.) - Recently I brought down a GLS350D from Hyderabad for client and so I know from experience that it's doable.

You need to work out the pricing and downtime. Eg. For a 1 day Hyd rental, you will need to keep aside 3 days availability of your car.

12) Am I missing something super important?

Unless you have a captive clientele, I would suggest not to enter this business. First start with acquiring B2B clients - who will give you regular business. Say someone like Emirates who offer pickup drop for their premium class customers. Once you have enough business to cover the operational costs, go ahead with the vehicle purchase. Once you have the cars available, you will be able to increase your business.

Eventually I would like to add Bentleys and Rolls-Royces (Brand new) based on demand and also how quickly the business takes off. I don't mind offering cars to celebrities, business owners, politicians etc. on short leases wherein they care write off the lease an as expense while still being able to indulge themselves.


I would love to hear thoughts and inputs on how could I do this better?

I have a fleet primarily with WagonRs. All of my cars combined value won't be able to match the cost of 1 S Class . So just be really sure of the numbers. If you are doing the maths, estimate only a 15-20 day period in a month for active bookings.

Further you will need to keep a dedicated person and equipment to clean the car after every booking. Keep a stock of water bottles, newspapers, tissue boxes, some candy etc. The cleaning and restocking will take up some time before and after every booking. Account for this.

You will also need to keep more drivers than the cars you have. It should not happen that you have to cancel a booking for last minute driver absence.

Also if you have the contacts of other cabbies, inform them of your services and let them you that you have a car for hire. Offer them B2B rates. There might be a situation when an event needs more vehicles than what any one individual might have.

Edit - Forgot to add. Considering an S-Class at Rs. 1.7 cr, you are looking at an EMI of around 3.5L for a 60 month tenure. Assuming you do 20 days of 8 hr 80 km packages, you will need to price them at minimum Rs. 20,000 just to recover your overhead (EMI + fuel + salary + maintenance + misc.) at the very least. Find out if there is a market at this price point. For comparison an Innova Crysta for 8 hr 80 km goes for 5-6k in Mumbai from a reputed cab company. Innova costs 20L.

[Zippy_wheels]

Originally Posted by LPJ777

.



I would love to hear thoughts and inputs on how could I do this better?

Thanks in advance,

Regards,
LPJ777

I think you should take time out to build relationships with some of the premier hotels in the city. Most of your clientelle would be out of city folks and hence most would book hotels in advance. People would generally get their transport sorted out well in advance, hence the right time to pitch in your offerings would be when they are booking accomodation.

You could also tie up with a professional security service provider to make PSO's/bodyguards available, if required.

Also tying up with a good supplier of drivers (backup option in a pinch) would be helpful in providing a seemless experience to your clients.

[gauravdgr8]

Originally Posted by LPJ777

Any leads on where I could find a potential pool of talented Chauffeurs? Looking for within the Industry is one option but are their alternatives?

Maruti Driving School does provide corporate course for driver training and certification. Check them out on the below:

https://www.marutisuzukidrivingschool.com/courses

Ps: I am no way associated with Maruti or Maruti driving school

[Aluminium]

Originally Posted by LPJ777

Any leads on where I could find a potential pool of talented Chauffeurs? Looking for within the Industry is one option but are their alternatives?

If you are looking for a short term hire, I am looking to fill a six month gap between the CAT exam and start of classes, that is from December to May. I can mail you my details and resume if and when required.

[Samarth 619]

12) Am I missing something super important?

Well, let me just answer this in particular. I think research is necesary before we proceed with any big investment. Where are your customers & what will they expect? What will they readily pay? Who are your competitors and what are you offering extra compared to them (that female operator idea is fabulous idea, although it will likely benefit a few only, so watch the costs)?
For your first step, let me suggest you try making a Business Plan Report, with expected customer inflow, income & expense estimation, and of course, a tentative balance sheet and profit and loss statement. Assume things at their worst possible outcome while you make these.

You might need associations that help you, like hotels, lodges and resorts, maybe in exchange of some financial aid?

Avoid recruiting permanent employees and purchasing assets beforehand.
You could start with creating a network of trained chauffeurs around your place on a hire-to-drive basis with background verification, or at best employ them on temporary basis. A maximum of one purchased vehicle should be enough, preferably a clean second hand (around) BS4 era car. BS3 is too old for long term, and BS6, not so profitable (generally).
If it works for you, you could hire another car from your competitor or contacts, and invest later on. Or you could start with a junior sedan, something like Skoda Octavia (I'm a biker so I don't know much about cars).

You'll also need to maintain safety of vehicles through GPS trackers, locational fencing, etc.

The day you feel your business has enough customers to warrant an expansion, you're free to invest further.
However, your presentation and service quality should, at no point of time, look/feel like a compromise. Try to use cheaper add ons which enhance customer experience, like 4G/5G SIM/dongle based Wifi if its ok, sun blinds on windows if its legal, washed/maintained pillows, maybe a cheap, public laptop within the car for office works or so, heated seats, massagers, indoor soft-tone lights for studying/selfies, etc.
Going 'slow' is encouraged, but never go 'low'.

There might be things I'm missing here, but at least for you this thread will open up points to think about. Wish you all the best.

[hortons15]

An excellent idea!

I have personally started using AVIS since the past 2 years and have been extremely happy with their black car service in major cities - excellent fleet of Camrys, 5 series and LWB E-Class (a favorite until now) I have used them in BLR, Mumbai and Delhi until now. I used to struggle a lot before I discovered AVIS India - booking with local providers and not knowing if the car would show up to the airport on time, or if the car would be clean or if the chauffeur is nice and whatnot. AVIS offers airport services, and 4,8 hour bookings.

Typical expectations for this kind of service:
1. Petrol or hybrids - definitely no diesels.
2. Unless we are arriving at a grand event, the car does not matter - it has to be luxury though, plus clean and comfortable. Executive segment and higher. Color - black/business silver/grey but not white. A8L, S Class, reclining rear seats a plus.
3. Window blinds
4. Basic refreshments like a chilled towel, water bottles, canned juices for each passenger.
5. Chauffeur that does not talk unless spoken to and respects privacy (looking back/eye contact).
6. Showing up early, pickup promptness.
7. Driving style - calm and smooth.
8. Clean cars with absolutely no smells or dirt marks anywhere.

One thing I would watch out for while starting up this business is how you handle downtime (unexpected driver absence, car unavailability, etc.) when you don't have enough scale to make alternate arrangements. One sour experience would mean a customer lost. Hope this helps