Car Rentals Cite Watershed In Blooming Inbound

Bhisham Mansukhani - Mumbai

The availability and easy access to car rentals in the city of Mumbai with competitive rates strategy have fuelled demand. As the inbound tourism in India has accelerates in the past six months, the car rental industry has witnessed a 40 per cent increase in demand. The demand has further gained proportion from the corporate sector and service industry such as call centres and hotels.

According to Prasad Shinde, executive director, Platinum Rent A Car, “The growth for the industry going forward year-on-year, could go as high as 100 per cent, citing the north-bound domestic and inbound tourism numbers. Shinde said, "Our company visualised an opportunity and expanded its fleet strength envisaging the demand and supply ratio currently in the city. Since the Rent A Car industry is still in a nascent stage in India in terms of structure, Platinum Rent A Car has made a constructive effort in consolidating its operations delivery and marketing plans to grow as a brand among the group of players in the current market scenario."

Shinde however pointed out that, to enhance the growth of car rental industry, especially in Mumbai, the local government bodies should accelerate the infrastructure development in terms of road connectivity and better maintenance of the existing road network. The government should take keen interest in providing parking lots in commercial areas and smooth traffic flow. This will not only enhance the mobility factor but also give a good image of the commercial capital - Mumbai.

Platinum R A C is gearing up to expand its current fleet strength and also open branch offices in major feeder markets of New Delhi and Bangalore. In the year 2003-04 Platinum R A C has seen an over growth of more than 100 per cent and increase of 50 per cent in profitability. The industry on the whole has seen larger volumes in highly competitive market. Hence the profit margins are constantly under pressure. This is an ideal because the industry is unstructured.

Basically car rental is growing with the help of inbound tourism, all car rental companies don't get much business from inbound, Delhi and Bangalore contribute to coach section than car section. People are not selling this product, travel agents are not pushing the car rentals.

The car rental industry is not organised and does not have an association.Another is that the problem of eight per cent service tax, nationwide, killing us badly,the government is losing out because players are not taking bills. Mumbai's car rentals requirements were 750 back in 2002 and is now is perhaps double.