Maruti Suzuki entry boosts vehicle subscription business model in India, says GlobalData

Following the news that Maruti Suzuki launched vehicle subscription service ‘Maruti Suzuki Subscribe’ for individuals in Delhi-NCR and Bengaluru;

Animesh Kumar, Director of Automotive Consulting at GlobalData, a leading research and consulting company, offers his view:

“The move, which comes after running pilots across multiple cities, is an extremely positive development for the growth of vehicle subscription market in India, which already has presence of key players like Hyundai, Tata Motors, Volkswagen and MG Motors.

“In July, it was reported that Maruti Suzuki tied up with ORIX Auto Infrastructure Services Ltd, a subsidiary of Japan-based ORIX Corporation to test subscription service in Bangalore and Gurugram. In late August, the company collaborated with Myles Automotive Technologies to launch vehicle subscription as a pilot project in Hyderabad and Pune.

“Maruti Suzuki’s plan to launch subscription service in Tier 1 cities in the first phase is the right move as these cities have shown acceptance towards new business models including shared mobility. Later, the company can expand the geographical footprint across other key cities in India. ‘Maruti Suzuki Subscribe’ will offer select vehicles through both of its sales channels i.e., Maruti Suzuki Arena and the premium channel, Nexa.

“Vehicle subscription business model has high acceptance in several other countries but Indian market remains largely untapped. Awareness is a challenge but the entry of key players will help in overcoming the hurdle and increasing acceptance among customers. In future, cars would cease to remain a product and would instead become a service and business models like vehicle subscription and shared mobility would pave the way.”

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