Nearly all industries took a massive hit during the lockdowns that happened due to the coronavirus pandemic and the automobile industry is no stranger to this. However, some wings of the mobility sector benefitted from the lockdown, for example, the logistics sector since home delivery of goods and services caught on all the more. Similarly, the need for personal mobility grew as well. But the decision to buy a car was deferred by many and that is where car subscription comes in. We got in touch with Sakshi Vij, Founder & CEO, Myles Cars to find out about the change in car subscription trends, the growth in the industry and the near future.
How has the pandemic and related lockdowns affected business?
Due to the pandemic, people stayed at home – which was important for the cycle of the wave to break. For businesses too, stepping out and traveling was restricted and that meant a radical decline in our numbers. However, after the first and the second lockdown, we saw a rapid increase in demand for car subscriptions and car-sharing services from Myles. A large number of people from cities were craving to step out and escape to the hills, beach, or nearby locations. As a result, the number of bookings grew significantly. We also witnessed that more people want to have a car at home but do not want to spend a lump sum on purchasing one. Subscription services by Myles provide exactly that. The ability to own a car for 6 to 60 months and only pay for that period. Consumers can have a pre-owned car or a new vehicle and not have to worry about vehicle maintenance, insurance, etc.
An exponential spike in demand had been expected for car subscriptions during the pandemic since people would prefer personal mobility. How has this panned out? Have you noticed a significant rise in subscriptions after the lifting of lockdowns?
Myles subscription has seen significant traction over the last year. Since more people wanted a dedicated car for themselves, subscriptions became the most convenient, affordable, and flexible option. When choosing a subscription, the customer does not have to worry about the down payments, additional maintenance costs, etc. At Myles, we are rapidly expanding to all major car dealerships in Delhi, Mumbai, Bangalore, Hyderabad, and Chennai. Thus, customers have a more accessible way of using a car. All cars also get delivered keeping in mind the utmost safety measures such as sanitization and contactless delivery.
Currently, compared to FY19, FY 20, and FY 21, we are seeing a significant increase in demand. The number of people who are reaching out to us on a daily basis for subscriptions has gone up by almost 4x to 5x. In fact, we have been offering young used cars in such good condition and at such an attractive price that a large number of people are opting for long term subscriptions.
What duration of car subscriptions is the most popular at Myles? Is there a specific demographic that uses car subscriptions more than others? Which is the most popular car or car segment among subscriptions at Myles?
On average, people are opting for subscription services from us for a period of 26 to 30 months. The most popular car is the entry-level Sedan or the Compact SUV. This is because people are going on a lot of driving vacations with friends and family in their personal cars and these cars are ideal for them.
As far as demographic is concerned, we are seeing there are two kinds of customer segments that are very interested in subscription – first one is the salary professionals such as senior-level managers and CXOs, who are frequently moving jobs between cities and countries and they like to avoid the hassle of owning a car. The other segment is the SMEs, in which a lot of small and medium business owners including doctors and lawyers, startup owners who are realizing the benefits of having subscriptions. They don’t have to purchase cars in the traditional way as a subscription makes it very easy for them to have the benefit of having a car while not making the entire investment on the vehicle. So the vehicle investments don’t eat up their company’s fund. These two segments are hugely popular.
How is Myles ensuring safety during the pandemic, considering a subscription car can see multiple drivers and occupants?
No, I don’t think car subscriptions see multiple drivers and occupants. Essentially, a car subscription is where a single customer subscribes to a car for a minimum of 6 months. Each time the car is delivered to the customer as per our standard policy, the car gets completely sanitized and delivered to this one customer. When this car is returned again goes to a complete check and sanitization before the next customer takes it up. During this period, we provide additional services wherein in case the customer wants to add a package we could provide them a regular monthly sanitization service at their doorstep. Subscription means a time frame of service and so multiple customers using the same vehicle on the same day or during the same time period do not exist.
As the monthly subscription price of a car is now comparable to a car loan EMI, do you think car subscriptions can become a more popular way of car ownership than buying?
Absolutely! And that’s what we are aiming for. We are ecosystem players, we get together financially regulatory, and all kinds of maintenance and insurance players under one ambit and provide the best package to the customer who does not have to worry about the hassle of cost and maintenance. That is the key reason why subscriptions are becoming so popular. We are also available in most of the locations where customers go to purchase a car. That allows us to be able to make subscriptions as easily available and probably a lot more affordable compared to car ownership wherein an individual is required to pay an upfront cost.
Is Myles looking at expanding into the two-wheeler segment? If you could please elaborate on expansion plans for Myles.
We are in conversation with various vehicle segments. The subscription models essentially work for any kind of vehicle. And since we are an ecosystem player, we would like to engage with all vehicle segments whether two-wheelers, commercial or electric vehicles. Our first goal is to make sure that subscription as a service and our technology platform are available at every point where customers go to purchase a vehicle. Over the next few years, we believe that we will tap at least 2% of the market, and in the car segment, that market is about 3 million. So far, we are doing a pretty good job in terms of subscriptions as we are catering to a large section of the population. image.gif
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