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Self-drive car in India will supersede high volume sales of cars. Here's how

Self-drive car in India will supersede high volume sales of cars. Here's how<b></b>
The Indian Car Rental Industry has grown leaps and bounds over the years due to a rising demand for better and sustainable modes of transportation among its growing urban population. Driven by a hunger to experience vast avenues, coupled with an innate fear of missing out on certain opportunities, the millennial youth of India is gradually becoming the force that is fueling the growth of the car rental industry.


According to a report by Ken Research – a global aggregator & publisher of Market intelligence research reports, the Indian car rental market’s revenue is projected to grow at a considerable Compound Annual Growth Rate (CAGR) of 35 per cent. Furthermore, this sector is expected to be worth more than INR 800 billion by 2019, which is quite an encouraging aspect for market players in this segment.

And that’s where self-drive car rental market is emerging.

India’s position in the self-drive car market

Greg Moran, CEO & Co-founder, Zoomcar told Business Insider, “The self-drive car rental market in the emerging countries is mainly driven by factors such as government restrictions regarding private car ownerships and increased access to technological advancements like the Internet and smartphones. The Chinese self-drive car rental market is the largest among the three emerging economies and contributed to the maximum share in the overall market. Changes affecting the Chinese self-drive car rental market will have a strong impact on the overall self-drive car rental market of the emerging countries. However, the self-drive car rental market in India will account for the highest growth compared with the Chinese and Brazilian self-drive car rental markets in the coming years. The market is at its nascent stage and offers immense growth opportunities for the market players.”

Roads in developed countries now have many partially automated vehicles, and highly automated vehicles will soon join them. Even Indian roads could see vehicles with some partial automation, but anything more would need to wait for better infrastructure and regulation.

Low vehicle ownership buoying the growth

The gap between rich and poor in India is relatively large, the average annual income of Indians is 3500 US dollars, the capital of Delhi has 25.7 million people, young people accounted for almost half. "Rent a car usually uses a pricing strategy - for example, in Delhi, the cost of renting a car is $ 80, a car can be used for 4 to 5 people, a person costs about $ 12.

India has a low rate of vehicle ownership, and in many large cities, the vehicle ownership rate of 10%, which determines the development of automotive-related shared economic market in India has great potential. And India's economy and population are growing, population density, large population density of the city is bigger than that of China. Various needs contributed to the shaping of the shared economic model in India.

“India's law on shared car rental is very strict, the bank loan process is also slow, which delayed the supply of vehicles, but the market demand is very large, resulting in supply imbalance.

Our platform ZAP allows the user to buy the car, rented out on the Zoomcar platform, which can cover the cost of buying a car." This model can cover 70% to 80% of the cost of buying a car, Zoomcar hope that this model will be extended to India's 30 cities,” said Moran.

Car sales are going up

But Moran thinks that won’t be any hurdle. “India is a more traditional country, the Indian family concept is very strong, in the choice of car rental, they will bring their families or colleagues, which virtually in the car rental industry to bring users. In India, many people do not have cars, they do not want to spend money to buy a car, but there is short-term travel, travel needs, these needs determine the car company's presence. India has a low rate of vehicle ownership, and in many large cities, the vehicle ownership rate of 10%, which determines the development of automotive-related shared economic market in India has great potential. And India's economy and population are growing, population density, large the population density of the city is bigger than that of China. Various needs contributed to the shaping of the shared economic model in India,” said Moran.

India in the future may have a lot of shared car rental platform, as in China shared bicycle competition, India will have two to three shared car rental platform competitions, but in the end, will only left dominance. In the shared car rental industry, India has the potential to reach 25% of China's market share, but due to complex laws, India's share of the economic market is difficult to match the developed market.

Future

Moran is optimistic that the India Self Drive Car Rental market has witnessed a growth in recent years because rising demand for long distant and weekend trips fuelled by introduction of new technologies, increasing fleet size, rising geographical penetration and entry of new players. The surge in growth is majorly originated from growth in weekend trips. The growth in Self-drive car rental has been largely led by the various factors such as security mechanisms adopted, affordable pricing packages, increasing demand and entry of new player in market.

Favourable consumer dynamics such as rising number of digitally active users along with increase in personal disposable income would rise in the market in upcoming future. Increasing penetration by self-drive car rental players in different geographies of the country is anticipated to give a boost to India Self Drive Car Rental Market. Lack of effective government regulations and industrial standards along with enhancing competition are few of the major challenges which will affect the growth of this industry in the future.



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