Source : PTI | Japanese mobility solutions and financial services provider ORIX Corporation has identified India as one of its two focus growth markets globally, bullish on the prospects of vehicle leasing and rentals in the country ‘taking off’ going forward, according to its President and Group CEO Hidetake Takahashi.
The company believes that it can increase the size of its fleet in India to around 1 lakh to 1.5 lakh vehicles in the short to medium term from the current 50,000.
India’s growing economy, rising inflows of FDI, more multinational companies entering the Indian market and increasing number of domestic entrepreneurs all augur well for the growth of ORIX Corporation’s businesses, specially vehicle leasing and rentals, Takahashi told PTI in an interview.
“Outside of Japan, Australia and India are the markets that will be a focus for ORIX,” he said when asked about the company’s key growth markets for the future.
Japan is currently the biggest market for ORIX with about 5 lakh vehicles, while that of Australia is around 80,000 and India at about 50,000, Takahashi noted.
While the penetration of automobile leasing in India is about 3 per cent of the overall vehicle sales, he said, with the changing technology of mobility, the way of ownership of mobility will also change going forward.
“We can follow not only leasing but also rent a car or car share or any other way to use a car rather than own the car,” he said.
“We should be patient, and I believe that there will be a sort of ‘J curve’ to penetrate leasing or rent-a-car at a certain point…India is at about the “taking off” stage,” Takahashi said, adding that it was similar to what Japan had experienced about 30 years ago when companies and individuals preferred to own the car rather than lease a car.
Explaining the rationale behind the company’s bullish outlook on India, he said, “The Indian market is evolving, progressing a lot and changing a lot. Many Indian entrepreneurs are starting up new businesses, and they grow the business a lot faster than other markets.”
India is not only a growing market in terms of population and economy, but it is also driven by entrepreneurship, he noted.
Besides, he said many multinational companies are also entering the Indian market, providing one of the many “reasons that we focus on this market”, Takahashi said.
With the company owning the vehicles, he said, if ORIX could double or triple its fleet size to 1 lakh or 1.5 lakh, it could “have more buying power” while dealing with vehicle manufacturers.
When asked when the company can reach such a size of its fleet in India, ORIX Corporation India Ltd Managing Director and CEO Vivek Wadhera said while it is difficult to put an exact timeline, “in the short to medium term, we should be able to be there”.
The size of the automobile market is increasing, and the share of leasing in that market is growing, he added.
Stating that India is “at that point of inflection” where growth of vehicle leasing and renting will accelerate, Wadhera said, as the percentage of Gen Z, who prefer experiences over ownership, goes into the workforce, there will also be a mindset shift, which will help the vehicle leasing companies.
