Deluxe

Carzonrent buys 120 Mercedes at one go

DELHI

Rajiv Vij, MD, Carzonrent and Eberhard Kern, MD & CEO, Mercedes-Benz India beam happily at the record sale
Rajiv Vij, MD, Carzonrent and Eberhard Kern, MD & CEO, Mercedes-Benz India beam happily at the record sale

Once upon a time in India, if you had a Mercedes outside your house, you had arrived. Well, that dream could come true, and for just a few thousand rupees.

Carzonrent India, India’s leading car rental company has announced it is buying 120 Mercedes-Benz C-Class sedans in a single purchase order, the largest of its kind in India.

With this order, whose delivery is spread over the next five weeks in leading metropolitan cities of the country – Delhi, Mumbai, Chennai, Hyderabad and Bangalore. With this order, Carzonrent will take its number of premium and luxury cars for hire to 800, the largest such number in India.

Carzonrent currently operates 7,500 cars in over 39 cities in India, with plans to quadruple fleet size in three years. “We plan to invest around Rs 1,200 crore in the next three years on fleet expansion, taking the total number of cars in fleet to 30,000 units,” says Rajiv Vij, Managing Director, Carzonrent. These C-Class cars are priced between Rs 30 and 47 lakh per unit ex showroom in Delhi. Carzonrent currently has about 300 Mercedes cars already, and this order will augment the fleet, though some older cars will be replaced as well.

Growth on the anvil
This deal with Mercedes has a price tag of Rs 40 crore. While this is a significant order, Carzonrent plans to spend Rs 100 crore on growing its luxury fleet alone this year. Vij expects the share of luxury cars in Carzonrent total fleet to rise from the current approximately 10 per cent to about 15 per cent in three years. While Vij refused to reveal exact revenue figures for Carzonrent, the privately held company’s monthly business is pegged at about Rs 30 crore a month.

“This is the biggest single corporate deal by Mercedes-Benz in India,” reveals Eberhard Kern, managing director and CEO, Mercedes-Benz India. Describing it as a happy day for the German auto giant, Kern stresses that Carzonrent is not a new customer. While Vij did not specify the kind of discount on offer in this deal, he described having the best “ownership cost” for Carzonrent, especially for the level of support from the auto giant. Kern also notes that when potential customers get to hire such luxury cars, “it is a kind of test drive, and if they like the experience, it becomes the foundation of longer relationship.”

India’s car rental space is estimated to be worth about $3 billion and growing at about 15 per cent, according to industry estimates. While Carzonrent has had a headstart, competition in the form of Meru Cabs, Olacabs, Zipcar, MiCar, Uber and many others makes it a growing market. Just 10-15 per cent market is serviced by organised players.

Carzonrent, launched in the year 2000, currently operates its services under EasyCabs Radio Taxi, MYLES-Self Drive, Intra-city, Outstation, Leasing and Limo services. It employs 8,000 drivers, who make 25,000 trips clocking 100,000 kilometres daily. The company serviced more than six million travelers in 2013. Carzonrent was the first car rental company to integrate GPRS technology across the entire network. “We started with just 29 cars in Delhi, Mumbai and Bengaluru, doing business worth just Rs 20 lakh a month,” recollects Vij, saying it was humbling to receive such a large order now.

Vij says there is growth opportunity in every segment of the car rental service. “We launched the self drive segment last year, and by March 2015, we expect to have about a thousand cars in this space too.” He said daily and hourly rental businesses were growing too, as were niche segment such as electric cars. Carzonrent also has a separate ‘corporate’ fleet as well 9 airports besides top flight hotels such as Intercontinental and Ritz Carlton. “There is a lot of aspirational value,” he says. “There are lots of new customers who are getting to experience these cars at a fraction of the price they would have to pay to purchase such cars.” The hiring of luxury cars is also a growing segment for social events in India, he says, pointing to another fast growing area.

Well, even if buying a Mercedes is out of your budget right now, go indulge when you hire one. 

Suman Tarafdar

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