Mumbai: The cab market has become increasingly important in the last two to three years in the backdrop of the entry of app-based aggregators. This has not only disrupted the HRV and traditional cab markets, but has forced OEMs to modify their growth and marketing strategies.

A report published by ICRA says that the Indian passenger car industry is likely to benefit from the strong growth potential of the domestic cab market in the short term, while medium to long term growth will be supported by low penetration rates and rising income levels.

“The Indian cab market is expected to witness strong double-digit growth over the next 2-3 This year, fleet sales including car rental aggregators are likely to emerge in 2016 due to strong demand and increasing penetration of these players in smaller towns It accounted for FY growth. About 9% of India’s PV sales are expected to reach 15-17% in FY2020.

The Indian cab market is still in its infancy and has huge scope for growth due to low car penetration and weak public infrastructure. OEMs also realize the market potential and have a special sales team to cater to the needs of team operators.

The entry of aggregators such as Ola and Uber has changed the competitive landscape of the cab market. Currently, the cab market is largely fragmented and lacks room for negotiation. We work with original equipment manufacturers (OEMs) and original equipment manufacturer partnerships (OEMs) as well as large organizational operators (typically less than 5,000) vehicles). However, aggregators such as Ola and Uber have just over 250,000 marketed cabs in NCR. As a result, segments of the PV industry are now having a significant impact and many OEMs have set up a special team to tackle the aggregator market. ‘ The report said:

However, growth in the cab sector is expected to be the second highest in India in terms of vehicle purchases in the short term, and the resulting demand for replacement cabs will only offset these losses in the medium term.

ICRA car buyers are categorized into three main segments: first buyers, replacement car buyers and additional car buyers.

New car buyers account for 40-45% of the overall automobile market in India. Given the low penetration of cars in India, new car buyers are likely to remain a strong force. Similarly, the replacement sector is also expected to grow rapidly due to the shorter vehicle replacement cycles in the Indian market. However, cab information providers and the cab market pose a real challenge to other car buyers.

Consider a customer base that already owns a car and may rely on cabs for short-term/limited use. Given the growing traffic problems, some customers use cabs because they feel more comfortable using a chauffeur-driven car without paying for a driver.

The report added: “However, the loss of additional purchased fleets will be offset by cab fleet and (in a few years’ time) replacement vehicles, and will outweigh the significant impact on overall demand. Challenges faced by app-based aggregators, ICRA Considering the fact that most of the wireless cab operators and cab aggregators, (Ola Uptoday is currently losing money and the current tariff levels (considering the increase in market share) are a win. Talk about I can do it. It won’t last long.

Additionally, incentives for drivers may dry up due to potential pressure on investors in these companies. As a result, drivers (reduced incentives) and riders (higher fares) may face difficulties in the short term.

Nonetheless, convenience and availability are more important in the long run than these short-term issues.