In the post-Covid era, there is an increasing demand for personal mobility, but not everyone can or wants to own a car and this notion has led to an increase in demand for rental cars and services. car subscription. Industry players like Zoomcar and Savaari believe it will continue to grow in 2021.
Industry players like Zoomcar and Savaari believe rental car demand will increase further in 2021
The COVID-19 pandemic has brought about major changes across all segments, and the mobility industry has not been immune. With safety and health becoming the priority, there is a strong aversion to public transport, and consumers are now more inclined to personal mobility. A factor that was also highlighted in the carandbike survey that was conducted earlier this year. That said, not everyone can or wants to own a car and this notion has led to an increase in demand for rental cars and auto subscription services.
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Speaking of the car rental business in the post-Covid era, Greg Moran, CEO and co-founder of Zoomcar, said: a better option than the VTC and also as a more affordable and faster way to acquire a car , offering a safe personal mobility replacement. We have started to gradually develop our operations and have seen reservations and subscriptions come back in force. We are already seeing a 400% increase in demand and we expect it to settle at 200-300% over the next few months. “
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On the other hand, Gaurav Aggarwal, CEO of Savaari Car Rentals, said: âThere has been a noticeable change in travel requirements since early December. The past 3 months have mostly involved clients on essential and emergency travel, while December has seen an increase in leisure travel. “That said, for Savaari, business is still far from usual. compared to pre-COVID demand. In fact, the company claims rental car demand in December 2020 was only 65% ââof what the company saw in the same period, year last.
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Zoomcar says that in the post-Covid era, prioritizing personal mobility and security has taken center stage and this will likely open up plenty of opportunities for car rental companies. However, the company believes the challenge would be to rethink the business model that provides a constant stream of income to mitigate business risks under the constraints of COVID. Car rental service providers will also need to understand how consumer behavior will change after Covid and how they will manage costs in the absence of business continuity.
Speaking about changing customer needs, Zoomcar’s Greg Moran said: âPeople are now looking for short-term mobility access rather than a long-term investment. We have seen an increase in the demand for cars for personal work and emergency use cases. interurban travel is on the rise. The idea of ââowning a car in the midst of such an emphasis on social distancing may have taken hold. However, the need for a mobility service remains as relevant as before. As people would avoid public transport to protect themselves from contracting the virus, the need for rental cars will only increase. “At the same time, speaking about the future, Aggarwal from Savaari said:” 2021 is upon On the verge of witnessing a huge increase in domestic travel and tourism. Leisure travel is expected to fully recover by Q2 2021 (April-May-June). With remote working options becoming the norm , Tier 2 and Tier 3 cities across India are expected to see an increase in demand for leisure and business travel. â
Regarding fleet expansion, Zoomcar says it is targeting more and more vehicle models to its fleet. At the same time, the company says the distribution of high-end hatchbacks or hatchbacks like the swift and i20 has increased from 50-60% to 75-80% in the last 3-4 months after the Covid lockdown. . Zoomcar has seen some demand for SUVs like Creta, but 7-seater models have not been as popular after Covid. Savaari, on the other hand, works as an aggregator using a lightweight business model. The company claims that the elasticity of supply / fleet requirements is quite high and depends on the travel demand it forecasts throughout the year (April, May, October and December typically experience peaks). Savaari claims to have a loyal supplier base built over the past 15 years and a workforce of over 25,000 vendors and driver-partners. By the second quarter of next year, it is looking to expand our driver presence in Tier 1 cities by 120% and in Tier 2 and 3 cities by 180%.