Auto cos turn towards the taxi & cab segment to ramp up sales

After treating the taxi and cab segment of the auto sector like a step-child for so many years, the car-makers are now trying to wash off their wrong-doings by supplying more cars for this segment. It was earlier believed that the car’s image gets degraded to a large extent when it turns toward the taxi and cab segment, but this mentality has seen a U-turn lately. Over the last 5 years, the taxi and fleet operator segment has seen an annual growth rate of 20% and has evolved as a significant customer for cars with a turnover of Rs. 15,000 crore. These figures have made the domestic auto sector realize the demand potential of the humble taxi and cab segment and the major car makers like Maruti and Toyota are ready to come up with models specifically developed for the fleet and radio cab segment.

In fact, Maruti Suzuki India has already become the first company to offer a dedicated car to this segment. The company released its entry-level sedan Swift Dzire specifically to the taxi and fleet operators. This car was renamed as Dzire Tour and was characterized by the absence of inessential features. According to the Managing Director of ‘Carzonrent’ Mr. Rajiv K Vij, over the years the manufactures’ response toward the fleet and radio cab segment has changed; earlier car-makers used to dread their cars turning into taxis but these days they are actively participating in the change process. The car-makers are finally able to see the promising aspects of the taxi/cab segment and do not want to lose out on this opportunity, he added.

This change is driven by the magic numbers that the taxi and cab segment is associated with; in 2005, the number of cars with the biggest player of this segment was just 1,000 and today the number stands at a roaring 6,500. In the same period, the total number of cars in India in the entire category has shot up to 500,000 units from 150,000 units. In the words of the Managing Executive Officer - Marketing and Sales of Maruti Suzuki India, the segment holds a fantastic potential to stabilize the sales of the company. The CEO of Avis India, Sunil Gupta expects the number of fleet cars to go up to 7,000 from 1,700 by 2015.