2 min read.Updated: 12 Sep 2019, 08:22 PM ISTAmit Panday
The subscription model will be available on select cars for a period of one to four years
M&M has rolled out 7 models from its passenger car portfolio for subscription
India’s leading utility vehicle manufacturer, Mahindra and Mahindra Ltd (M&M) has rolled out subscription-based passenger car ownership model in partnership with Revv, a four-year old startup that operates in the car-sharing space.
Seen as M&M’s attempt to cater to the varied car ownership requirements of the salaried and self-employed buyers, largely millennials, in tier I and II cities across India, the announcement comes as the beginning of festive season has failed to give any early indications of an uptick in the domestic vehicle demand.
The subscription model will be available on select cars for a period of one to four years, wherein the customer will be required to pay a refundable deposit and a month’s charges in advance, M&M said.
Last year in October, M&M had forayed into the car leasing space for retail buyers by partnering Orix and ALD Automotive. Veejay Ram Nakra, chief of sales and marketing, automotive division, M&M Ltd said the carmaker aims to address all kinds of customer requirements ranging from complete ownership, leasing and now subscription-based models.
M&M said it has recorded annual volumes of about 2,500 units under its personal portfolio of car leasing business in the past year. Nakra, however, refused to disclose the volume of subscriptions expected in the first one year of the business.
The company said that benefits of car subscription model includes zero down payment, no road tax, insurance, no risk of resale value and no maintenance cost as the monthly fixed amount includes all those costs. “The subscription model offers flexibility as no checking of the customer’s cibil score is required. Although the minimum duration is one year, the subscription plan can let young professionals change or upgrade the cars they want. They get access to driving a brand new car under our subscription-based model," said Nakra.
According to the senior company official, in the car-leasing format the buyer typically owns a single product for 3-4 years wherein the car could be either brand new or a used model.
M&M has rolled out 7 models from its passenger car portfolio for subscription including XUV300, Scorpio, XUV500, Marazzo, Alturas G4 and others. In partnership with Revv, M&M cars will be available across 8 cities including Delhi NCR, Mumbai, Pune, Bangalore and others under phase one. “We plan to add 11 more cities under the said model in the second phase," added Nakra.
Meanwhile, Revv, which has upto 3,500 cars in its fleet available for subscription across India, also has an arrangement with Hyundai Motor India Ltd, besides M&M. Earlier, Gurgaon-based Revv had signed up for the subscription-based model in January 2019, and has recorded up to 350 subscribers per month, its co-founders told Mint.
“We have about 1,100 passenger cars out in the market via subscription today. We are expecting the total to go up to 2,500 cars by December 2019. In CY2020, our internal target is to triple the subscription base as we continue to expand our footprint across India," Anupam Agarwal and Karan Jain of Revv told Mint.
For Revv, which is expanding from 19 to 22 cities by next week, Bangalore is the single biggest market followed by Mumbai, Pune and Hyderabad for subscription-based cars.
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