Mahindra's Foray into the Car Leasing Market
2019-01-08 10:24 Tuesday
Indian automaker Mahindra has announced that it will venture into the vehicle leasing, to expand its market share in the evolving auto industry. Mahindra has also established partnerships with Orix and ALD Automotive, enterprises within car leasing, to mitigate risks associated with its expanded service model.
At the beginning of the program, five vehicles automaker's models: - KUV100, TUV300, Scorpio, XUV500, and Marazzo, will be offered to customers for monthly rental ranging from INR 13,499 to INR 32,999. Mahindra claims that the rental is inclusive of insurance, end-to-end maintenance, on-road assistance, repairs and a 24-hour replacement vehicle service, which will provide customers with maximum peace of mind.
With the rising acceptance of car leasing by consumers, Mahindra believes that its service can provide flexibility, a low to nonexistent down payments, zero risk resale value risk and higher customer loyalty, eventually leading to more business.
Furthermore, market trends dictate that car usership rather than ownership is many drivers' biggest priority. Leasing provides flexibility for upgrades, and the ability to disregard resale value as a factor when choosing a car.
Mahindra's leasing plan will cater to working professionals, SMEs and will be available in six cities across India: Pune, Ahmedabad, Bangalore, Hyderabad, Mumbai and New Delhi, in the initial phase of the program. Phase two will roll out the service to 19 additional cities, and provide a wider range of models to choose from.
"Leasing as a business model has not taken off in India and its share is just 1%. There is almost nil participation from the retail buyer. With this initiative we hope to push the retail customer with attractive leasing options. Our leasing model is a category creating product offering, a 'no-worry' experience for customers who prefer convenience over ownership. It aims to bring a new class of customers – including professionals, small businessmen and millennials – into the car leasing experience. And I'm confident that leasing will gain more traction, moving forward, and keep with global trends." said VS Parthasarathy, Group CFO and Group CIO, Mahindra, speaking on the introduction of leasing service Mahindra's vehicle models.