It doesn’t take a soothsayer to predict that urban mobility will likely see dramatic changes, in light of an unrelenting pandemic that continues to ravage the country.
Hygiene and social distancing related concerns are at an all-time high, particularly in India’s densely populated metros. The second-wave has cast a particularly long shadow on the notion of shared mobility and public transport. Top players like Uber and Ola are on war footing, with the former having held 9,000 free online medical consultations for drivers and their families. Uber also unveiled a plan to get 1,50,000 drivers on its platform vaccinated over the next six months. Even automotive brands like Maruti Suzuki and Tata Motors have ensured that car ownership doesn’t feel like a burden during lockdowns, by extending their warranty and service packages for recently purchased cars.
The need for personal transport is clearly higher than ever. However, much like it was last year, that same need, especially at the entry level, is offset by economic uncertainty which is preventing buyers from securing funds for the capital outlay required for such an expensive purchase. The rise in fuel cost is also serving as a major deterrent for first-time car buyers – a consumer group that should logically see an increase in size, given that social distancing and passenger health will remain correlated for the foreseeable future. So just how can both consumers and carmakers end this stalemate?
The ideal thing for brands, especially makers of entry-level cars like Maruti Suzuki and Hyundai is to introduce more innovative financing options for customers. But it’s not just car makers who have to think differently. Used car websites, cab aggregators and electric two-wheeler startups, etc., all have an opportunity to bring innovative solutions to the table. For car brands, this starts with attractive subscription models, which offer the same benefits as private car ownership, minus the total costs involved.
Leasing: Leasing is by no means a novel concept, even in the Indian context where car ownership is a marker of upward mobility, so to speak. Since the notion of a down payment is too daunting for most car buyers in these financially uncertain times, leasing allows buyers to essentially subscribe to a car for a limited period of time. Brands like Maruti Suzuki and Hyundai, which make the 10 top-selling cars in India, month-after-month, offer attractive leasing options, especially for entry-level options like the Grand i10 Nios, Santro. Brands like Maruti Suzuki have partnered-up with Orix Auto Infrastructure Services India for a subscription programme that’s gained increasing prominence in Delhi NCR and Bengaluru. No down payment, no registration, insurance or annual maintenance costs, just a monthly amount that’s equal or less than your potential EMI costs.
Shared mobility: With cab aggregators taking strong measures to vanquish the sense of dread we collectively feel at the notion of entering a cab, it’s only sensible that the likes of Uber and Ola create thoroughly sanitised compartments, not just separating the driver from the passenger, but also any co-passenger who might be sharing the ride. When the medical infrastructure isn’t overburdened, it would help immensely if the aggregator also displays the driver’s vaccine credentials, along with the results and dates of frequently updated Covid-19 tests. A simple temperature check will not be enough.
Used cars: The used car market continues to be the most unorganised of the lot, with proper certification and websites offering legitimate price evaluations (for example: Edmunds in the US) having served as an impediment in the past. According to a study by Statista, the used car market size in India was greater than the size of the new car market in 2020 (as reported by Hindustan Times). The demand, which has seen a 50% growth year-on-year (YoY), is expected to sustain even after we ride out the second wave and begin opening-up again. The segment, however, could benefit from greater transparency and better financing options.
Urban freight vehicles and the rise of the electric scooter: With the e-commerce market expected to grow exponentially, electric two-wheeler (e2w) startups have the perfect opportunity to revolutionise urban freight mobility. With long distance not a major concern in a geofenced urban confines, electric scooters and cycles are perfectly placed to replace the conventional forms of mobility that are being used to make deliveries.
The new Bharat VI emission norms have increased the prices of petrol-powered two-wheelers by 7-15% (as reported by P&S Intelligence), further incentivising e-commerce brands to adopt more sustainable modes of transport. Swappable battery options will be preferred to charging batteries, as relatively low-cost scooters are also low on speed.
It’s not just e-commerce that will benefit from the growth of the e2w market. According to a report by PRNewswire, Karnataka and Uttar Pradesh are witnessing the fastest growth in demand for e-scooters and motorcycles across Tier I, II and III cities. Home-grown brand Ather Energy has already begun producing scooters out of its new 4,000 square-foot factory in Hosur.
While the public transport infrastructure in India differs from city-to-city, a survey conducted by The Energy and Research Institute (TERI) India shows that 35% of the respondents (the sample group represented India’s urban population which took the survey last year) are likely to change their mode of transport post-Covid 19. While this bodes well for an ailing automobile industry, likely to see single-digit growth in the future, it could worsen the traffic and pollution situation in most Tier I and II cities. While we’re unsure of just how widespread the adoption of non-motorised forms of transport will be, it is essential that cycles and walking be considered for short distances, as it could be far more preferable to public transport.
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