We are now only a weekend away from finding out how normal will the new normal be in the post-COVID-lockdown era. But one thing is clear that social distancing will be a part of our lives for longer than we wanted it to be and this will include picking modes of transportation that involve no contact with others. So, the question of using public transport once the lockdown eases off is out the window for a lot of us. But what if you don’t own a car yet? Simply going ahead and exchanging your money for a brand new car may be a solution to some but it certainly isn’t for all. We got into a conversation with Greg Moran, CEO & co-founder, Zoomcar to discuss the subject more and how car leasing/rentals may now become more popular than ever before.
Zoomcar is one of the largest subscription-based car rentals in the country today and considering the current situation, we may be looking at exponential growth for businesses the likes of it since people will prefer personal mobility.
Zoomcar has already been keeping busy during the lockdown with its associations and partnerships with essential service providers, and government bodies. Greg Moran tells us that once there is more clarity over relaxation in people and goods movement after a couple of days, it will expand operations to quasiessential services as well.
Moran goes on to say that there is an exponential spike in demand expected for car subscriptions. Once people understand that car subscription is better than a bus, train, or even taxis, in terms of privacy, flexibility and hygiene, they will more grow popular post-COVID.
Car subscriptions will continue to evolve and grow into more flexible plans and longer durations of leases ending 12, 24, or 36 months. But for now, the shift in demand has been towards one, three, and six months.
Zoomcar is looking at an upcoming spike in demand by four to five times, says Greg but continues to note that forecasting the growth pattern is difficult at the moment given the uncertainty prevalent because of coronavirus. However, car subscriptions for intercity usage will see an upward trend.
Whether car subscriptions will be more popular than car sales, Greg says that the two can’t really be compared but leasing a car is surely more affordable as buying a car involves huge working capital. Especially considering the current recession, car subscriptions can prove to be a better option for they will be a more affordable and quicker way of acquiring a car, delivering a safe personal mobility replacement.
While several studies suggest that car and two-wheeler sales may see considerable growth in the coming months, it must also be considered that there is currently an economic slowdown in play as well. There have been job losses and pay cuts which will have forced a lot of people to push back their plans to purchase a new vehicle. However, households that have relied on ride-hailing services for long now will require a car and subscription-based rentals might just be a safe way out.
Moreover, in the latest development today, the state government in Haryana announced a complete ban on buying new vehicles for the current financial year. The ban is applicable to vehicles to be used by government officials. The cabinet further stated that in case of an urgent need, vehicles should be outsourced or rented. The reason cited is the loss of revenues during coronavirus pandemic. If more state governments follow suit, this could be another avenue for car subscription firms.
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