Uber Technologies Inc., the well-known car-hailing service provider, has been treated as a major threat to the automotive industry as it lures consumers to shun new vehicle purchases. But in India the service’s popularity has actually worked the other way around.
For example, Maruti Suzuki India Ltd., the nation’s largest automaker by sales, has seen an increase in demand for its DZire Tour sedan due to the increased popularity of car-booking applications, according to R.S. Kalsi, executive director at India’s Japanese-owned carmaker. Meanwhile, Toyota has also caught the wind in its sails and is pushing special offers to lure drivers and fleet operators to increase the sales of its Etios sedan. Uber and its numerous competitors have showcased massive investment plans to expand their services towards more remote areas in India, including smaller cities, where public transport is traditionally inadequate. The rising popularity of the service providers has created strong demand for vehicles that are traditionally used by on-demand car companies that seek to increase their fleets – as well as from individual operators that will use the new cars in conjunction with the applications.
In the four months including July, Maruti Suzuki’s DZire Tour, which is only offered in taxi form, has seen a 152 percent jump in demand and Toyota’s Etios compact sedan climbed 28 percent. Meanwhile, overall auto market sales only soared 7.5 percent during the same period. The increased sales of the affordable models hunted by the car-hailing operators has been in part responsible for the vehicle delivery turnaround in India.