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Carmakers on mega taxi ride

The taxi segment is turning into a big one for car manufacturers, with companies reporting double-digit and even three-digit growth in sales.

Korea's Hyundai has seen its taxi segment grow 163 per cent in 2015. Maruti Suzuki sales to the segment grew 87 per cent.

The growth is triggered by action from online cab aggregators like Ola and Uber as well as self-driven car rental companies like Myles and Revv. For many car makers, the taxi segment growth is much higher than that in overall sales.

Maruti Suzuki's sales to the taxi and fleet segment grew to 75,500 units in 2015-16, to 6.5 per cent of sales against four per cent in FY15. Popular models catering to taxis include the Dzire Tour, Ritz and Eeco. A wide sales and service network and low ownership cost were the factors helping growth.

The segment's growth followed the trend seen across the globe and car makers have been preparing to tap this. The growth also shows transportation is increasingly becoming a commodity and many do not feel the need to invest in owning and maintaining a car, as a cab with attractive fares is available a click away. Hyundai, second-largest carmaker, in the country, has established teams to cater to only the fleet segment. Its sales here grew to 7,900 units in 2015. In the 2016 calendar year, the company has set an aggressive target to sell 20,000 units here.

Carmakers on mega taxi ride "Many new-age customers are making trade-offs and seeking alternatives to personal mobility with rent-a-car or taxi. This segment is seeing high growth and needs vehicles with strong assurance of service, with low ownership cost. We are building a dedicated structure at the head office and at the field level to guide channel partners to service this segment. With products like the i10, Xcent, Grand and Verna, we seek a growth higher than the industry," said Rakesh Srivastava, senior vice-president (sales & marketing).

Other companies also see big opportunity in the taxi segment. "We have clearly identified national, regional and local fleet operators, including Ola and Uber, and are working closely with them in meeting the growing demand and needs of the end-customer," said N Raja, senior vice-president and director (sales & marketing) at Toyota Kirloskar Motor. Against a five per cent overall sales growth, the taxi segment grew 65 per cent to 30,760 units for Toyota, to account for 22 per cent of sales.

Leading cab aggregator Ola has forged partnerships with carmakers, banks and financiers to encourage driver-partners to buy vehicles. "Hundreds of thousands of drivers have bought cars through Ola's tie-ups with car manufacturers and financiers", said Anand Subramanian, senior director (marketing communications). Ola has 350,000 cabs on its platform.