Car sales take a hit due to slow demand from cab aggregators

According to a media report, new car sales have taken a hit as demand from cab aggregators like Uber and Ola has gone down by 50% over the past two years. Car makers are expecting this trend to continue.

The sluggish demand can be attributed to cab hailing services struggling to gain traction in smaller towns and cities. To boost profitability, companies have reportedly reduced incentives for drivers. As incentives have gone down, driver partners are facing difficulties repaying loans. New third-party insurance norms have also affected sales.

It is estimated that 50,000 vehicles were sold to cab aggregators in the first 8 months of the current fiscal. In comparison, 75,000 cars were sold in the last financial year and 1.5 lakh units two years ago. Reports suggest that Maruti Suzuki sold 25,000 vehicles to cab aggregators in the first 8 months of FY2018, compared to 72,000 in all of FY2017. Hyundai is also witnessing a slowdown. 5% of the company's total volumes is fleet sales of which, 60% constitute vehicles sold to cab aggregators.

Source: Economic Times