THE INDIAN MARKET IS READY FOR SELF-DRIVE HOLIDAYS

With improving infrastructure along with greater consumer awareness and driven by the booming hotel and travel sectors the market for car rentals in India has grown at a rapid pace. There is also increased demand not just in terms of the size of the market but also in the quality and variety of services demanded. And it is this demand which has heralded the advent of experienced international players like Avis, Europcar or Sixth. The Current market size of the organised Indian Car rental industry is approximately USD 2.5 billion and this is pegged to grow at around 20 percent YoY. With an expected car strength of around 50-60,000 cars going on road per year within the next three years and with India becoming an integral part of the global business, there has been a dramatic increase in the demand for the premium car rentals to cater to the international travelers (both business and leisure) and the growing expatriate community. With the rapid growth in domestic tourism, customer are getting serviced by the large car rental operators with premium chauffeur drive and self drive options.Buoyed by the spurt in demand car rental companies too are offering various schemes like special driving holiday packages for chauffeur drive as well as self drive, point to point services, airport drop and pick up, customized holiday packages for tourists, promotional schemes on premium cars like Mercedes, Endeavour, Corrola’s, Camry’s etc. These schemes also include introduction of specialised packages like the Mercedes Airport Transfers or even trained women chauffeurs for single women (Oberoi’s Mumbai) among others. In the self drive option you drive your own car after picking it up from the location of the car rental company. You can sometimes have the option of hiring a chauffeur only for the number of hours of requirement. This means that you could be driven to business appointments at peak hours and self-drive the same car at your leisure. Research shows that an increasing number of users are willing to hire a car and drive on their own in overseas destinations. No one can really question the convenience that having your own set of wheels gives you. And this is where travelagents can earn commissions from their leisure and business travelers by suggesting self drive car rentals for convenience & fun. Self drive today is increasingly being offered as part of the packages for international as well as domestic tours by travel agents. If it is bundled with other components, the net pricing becomes opaque and mark-ups can also exceed normal commissions. Self drives in this sense also seems to be picking steam as it is hassle free and the customers have the freedom to explore the country at their own pace and discover the areas off the beaten track. The cars are fully equipped with handy route maps, destination guides and GPS technology which come at an additional cost. The cars are also comprehensively insured and have a valid rent-a-cab license for self drive. The Indian market is ready for self-drive holidays. However, there is lack of awareness among travelers. Customers responsible for the huge surge in demandfor self drive bookings are predominantly professionally qualified travelers working with MNC’s, adventurers and honeymooners. Internationally Self Drive is the mainstay of the car rental business, with point-to-point self drive being the main model in Europe. In USA, car rentals are popular for leisure and highway driving and not within the cities where there is traffic. The way forward is to increase the B2C (retail) segment, inbound and outbound rentals.