Maruti Suzuki India (MSI) is reportedly considering expanding the business by leasing vehicles to retail customers through its wide dealership network in the country.
The plan has been “in the works” for at least a year and is overseen by a special projects team, sources told Mint.
While competitors such as Hyundai and Mahindra & Mahindra already have a presence in vehicle leasing, they have done so through tie-ups with car leasing companies such as Revv and Zoomcar. Maruti had also tied-up with Zoomcar earlier but for vehicle leasing to corporates.
The launch date for the retail leasing project is unclear, but one of the sources noted: “Maruti has been giving its cars to Zoomcar and other platforms, but if they plan to go through the dealers, then it will help dealers as well as the company.”
The move would generate additional revenue for the company and dealers as the automobile sector battles serious setbacks from the economic slump and lockdown due to the coronavirus pandemic, the sources added.
Moneycontrol could not independently verify the report.
The sources added that in the current situation leasing model would fare better, especially for urban customers, given “declining affordability and less hassle”. Maruti did not respond to queries on the development, as per the report.
Leasing is generally a longer-term commitment than renting out cars, which can be for a relatively short period. Car leasing companies also typically offer customers the option to buy out the car at the end of the lease period or lease a different car.
Vehicle leasing is popular in developed markets such as the United States and Europe.
German brands Mercedes-Benz India and BMW India also offer customised leasing services for individual customers. They also rely on startups such as Zoomcar and Revv for retail lease to customers.Follow our full COVID-19 coverage here