Car subscription platform in India – An in-depth understanding with Sakshi Vij and Sunil Gupta

The car subscription program in India is relatively new and includes big names such as Mahindra, Maruti Suzuki, Toyota, MG, as well as companies such as Mylescars and Avis India. In an interview with the CEOs of Mylescars and Avis India, we understand more about the new alternative to owning a car — a subscription.

By:Updated: Oct 04, 2021 3:38 PM
car subscription india - mylescars, avis india

The car industry has seen a change. With the arrival of subscriptions for many day-to-day applications, it’s no rocket science to apply the same to the automotive industry. Currently, big carmakers such as Mahindra, Maruti Suzuki, and Toyota offer car subscription plans, and cashing in the possibilities are other brands such as Mylescars and Avis India.

Car subscription is catching up in India, which is an alternative to buying a car as it has advantages. To know more about the business and how it benefits customers, Express Mobility talks to Sakshi Vij, the CEO and Founder of Mylescars, and Sunil Gupta, the MD and CEO of Avis India.

sakshi vijSakshi Vij, Founder and CEO, MylesCars

On speaking about how different the car subscription platform is, compared to buying a car, Sunil Gupta says, “Buying a new car may not always be possible for many consumers due to the significant cost outlay. Borrowing an automobile requires a deal of trust. That’s when alternatives like car subscription models and short-term leases step in.” Sakshi says that a subscription is similar to buying a new car, minus the heavy taxes, down payments, monthly EMIs, etc. She says, “Under a car subscription model, consumers can get complete access to a pre-owned car or a new car of their choice without having to worry about these additional costs. They just need to pay an all-inclusive monthly fee that covers all the charges.”

Like any new business, success lays when customers accept a business that suits them. For many years, owning a car has been a status symbol, and this is slowly changing in India. Sakshi said, “We are seeing a positive response with the number of commuters opting for a car subscription growing. In fact, after the second lockdown, the need for personal mobility is growing consistently, but the decision to spend a lump sum on purchasing a brand new car is deferred by many. And that is where car subscription models come in.”

Sunil Gupta, speaking about how the market has taken towards car subscription said, “There is a rising interest in shared mobility and car rentals, which match the demand for flexible transportation options.” he adds, “Millennials have different life choices in comparison to previous generations and have a greater desire for experiences, as opposed to owning assets. There are also practical issues related to car ownership. For example, where should the vehicle be parked? How much will a new car cost? Has the price of insuring the car been considered? What is the cost of maintaining the car?. Therefore, the current generation may be more inclined towards renting a car instead.”

sunil guptaSunil Gupta, MD and CEO, Avis India

The whole idea of car subscription is still new to India. It is a relatively new concept that most brands, including carmakers, are trying to tap into. As of now, the car subscription platform is at its nascent stages and is expected to grow. “It is expected that the penetration of vehicle subscription will reach 3-5% in the next five years. Moreover, the Indian market is largely untapped and offers a fertile ground for key players, who are on their way to transform the face of mobility in the country,” said Sakshi.

How is this possible? Sunil states, “The market’s growth is being fueled by the increased penetration of third-party subscription service and lease providers. Furthermore, governments worldwide have been putting in place strict restrictions to combat the steady rise in carbon emissions, prompting automakers to create subscriptions for their vehicles all over the world. The business is providing a viable alternative to travel in countries that are lacking sufficient public transit infrastructure.”

A good percentage of the car subscription market is driven by organisations, used for employee benefits or as company cars. Sakshi said, “As part of employee benefits programs, Car Subscription delivers a zero-hassle, tax-saving, and cost-effective program for employee retention.” She adds, “Car subscription makes it easier for organizations to concentrate on their core business and not worry about managing cars.”

Organisations opting for car subscriptions has several advantages, and one of the primary ones is when employees are frequently transferred to various cities. Sunil said, “We realise that many employees take on roles that change quickly. So we provide cars on lease for short periods like 12 months.” Avis India also takes it a step further like “We assist in selecting the best-suited vehicles for mobility needs and usage patterns in different parts of the country, taking into account diverse terrains, and keeping the ground conditions for support in view. Avis India will help the HR and Admin teams complete the process. “We support the completion of all formal documentation for vehicle registration, insurance cover, and its subsequent delivery,” said Sunil.

Although subscribing to a car seems to be a great alternative to buying a car, paying insurance, monthly instalments, and renewing the insurance every year, one knows that at the end of a certain period, the car belongs to them. What happens at the end of a subscription, though? Sakshi states, “At the end of any subscription, the customer has an option of Upgrade/renewable/closure of their subscription. This can be done through the Myles app. In case the customer likes to buy the car they subscribe to, we facilitate that through our partners.” Sunil adds, “Once the cars have been used and returned, the company might utilise them for a used-car subscription service, which is significantly less expensive.”

Like any business, competition is tough. Especially when it comes from carmakers themselves offering the same services. Sakshi said, “Myles Zero is our unique subscription program where we partner with OEMs to build and promote subscriptions at all their customer touchpoints. With the same objective, we are currently working with OEMs such as Maruti Suzuki, Toyota and MG Motor.” The CEO adds, “Our key USP is that we can enable subscription as an option for vehicle access to any customer touchpoint through our technology and financing models. This makes it easy for us to spread the message of subscription to all vehicle buyers.

On the other hand, Sunil states, “The advantage of associating with AVIS is that it allows customers to choose from a wide range of cars from diverse OEMs under one roof, instead of seeking services and information from individual OEMs.” He adds, “At Avis, we provide a holistic ecosystem that caters to short and long-term leasing and rental services, as well as a complete range of solutions that help post-purchase and give the user a 360-degree mobility experience.”

For businesses all over the world, the lockdown time played a deciding factor for their future. The automotive industry was not immune either. So considering the pandemic, and how it affected business for Mylescars, Sakshi said, “Our numbers declined. However, after the lockdown restrictions were eased, we witnessed a rapid surge in demand for car subscriptions and car-sharing services. Over the last couple of months, the number of consumers who are reaching out to us daily for subscriptions has gone up by almost 4x to 5x.” The story with Avis India is also the same, “After an initial dip in inquiries, we bounced back quickly following unlock 2.0 and have started receiving inquiries to avail cars for both long-term and short-term rentals and leases,” said Sunil Gupta.

Mylescars has a fleet size of over 2000 cars, and its services are being offered in more than 10 cities. To start a rental or a subscription service from Myles, one needs to know that “they only need to fuel the car and drive it. All regular insurance, maintenance, registration, roadside assistance etc., are included in the subscription rental,” so customers are not liable to anything as long as one adheres to traffic rules.

With Avis India, Sunil states, “There is an age limitation, and the customer is liable for a deposit, the quantum of which depends on the car model. For most companies, the eligibility criteria are that the user should be above 21 years of age, have a mandatory IDP or an Indian driver’s license, and have an Aadhar card or a valid passport. All vehicles are equipped with the necessary state permits as well as an All India Tourist Permit.”

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