Surge in demand from cab-aggregators like Ola and Uber is propping up India's vehicle industry

At a time when demonetisation and the diesel vehicle ban in Delhi impacted the sales of cars, cab-aggregators pushed India’s car market into a new era of growth. An Economic Times (ET) report highlights this phenomenon by pointing out that cab-aggregators like Ola and Uber have added close to 600,000 vehicles in the last four-five years. This spurt in purchasing has accounted for almost 10 percent of sales of passenger vehicles. The report suggests that the industry will see around 25 percent growth in demand from cab-aggregators in 2017. Reportedly, car makers like Mahindra and Maruti Suzuki have set up dedicated divisions to deal with this sudden increase in demand. Offering cheaper financing options, driver training programs, servicing contracts, etc., these companies are welcoming the change. Demand for personal vehicles has come down over the years. With cab-aggregators stepping in to fill the void, passenger demands and industry sales are both being fulfilled. The ET report adds that Mahindra has tied up with Ola to deliver 40,000 cars, Tata Motors has tied up with Uber to deliver 20,000 cars and Maruti Suzuki has apparently partnered with Ola and Uber to train up to 70,000 drivers (called driver partners) in its training schools. Rahul Shrivastava, Senior VP of Hyundai’s sales division tells ET that app-based cab-aggregators are the new “shooting stars” of the industry.