Now an i10 as yellow-black taxi. Here’s how Indian cab market is bliss for car manufacturers

Ever since the taxi aggregators Ola and Uber rolled out in India, it has gradually revolutionized hailing a cab in many ways. Less refusal, competitive pricing and on time service have catalysed the business in many ways.

And now car manufacturers in the country are flocking to the car aggregators like never before. They have approached Ola and Uber to position some of their cars as cabs and take home some profit. The cab market in the country is more than double the growth in vehicles sold for personal use.

While personal car sales are growing at 7%, the fleet sales have picked up at a robust 15-20%, which might increase further.
At a time when the car sale was hitting a sticky pitch, fleet sale for cab services has opened a new avenue in the market for the car makers.

Hyundai Motor India, within 18 months of the launch of its compact sedan Xcent, has started positioning the model for the fleet taxi segment. Hyundai has also started offering its popular hatchback i10 for the black-and-yellow cabs segment in Mumbai and Delhi. In line with this development, Maruti Suzuki is positioning its Ritz in the same way.

Rakesh Srivastava, senior vice president-sales and marketing at Hyundai Motor India told a financial daily that the share of the fleet segment has doubled over the past few years to 10 % of the 2.2 lakh vehicles sold per month. "The ownership and usage pattern of cars are changing. Despite owning a car, a lot of people are relying on radio cabs and fleet taxis to meet their specific needs. We think the opening up of fleet market can definitely add 1,500 units to the monthly sales of Xcent in the coming months,” said Srivastava.

To meet this growing need, Hyundai Motor India has set up a separate team for fleet segment within its corporate sales team.

The $6-9 billion Indian market of taxis has a growth rate of 12-13%. With the increased penetration of the rental cab companies in the interiors of the country, the industry expects additional demand of 60,000-90,000 new cars per annum. The number of taxis plying across the country has grown to 2 million in 2014-15 from 1.7 million about three years ago.