Corporate car rental is experiencing healthy growth | Representative photo
The Indian corporate mobility market is witnessing robust growth, driven by regulatory changes, technological advancements and economic growth. Both the employee transport services (ETS) and corporate car rental (CCR) sectors are expanding, catering to the changing needs of businesses and individuals alike, analysts and industry experts said.
The ETS market, valued at Rs 50.35 billion ($6.1 billion) in 2023, is projected to reach Rs 1.09 trillion ($13.2 billion) by 2030, according to the Red Herring prospectus of Eco Mobility, a car rental company. This growth is driven by the increasing number of companies, particularly in the IT and Global Capacity Centre (GCC) segments, looking for reliable and convenient transportation solutions for their employees.
The CCR market, estimated at Rs 39,240 crore ($4.7 billion) by 2023, is also witnessing healthy growth, driven by factors such as rising business travel needs, a focus on employee well-being and demand for premium services. It is expected to reach annual revenues of Rs 73,180 crore ($8.8 billion) by 2030.
Highlighting the transformative potential of the employee transportation sector, Ashok Vashist, Founder & CEO, Wise Travel India Private, said, “Organized fleet operators, technology players and a consortium of both will dominate the market. The rise of the gig chauffeur concept will revolutionize mobility as it will become a popular option across all forms of transportation. This will result in a sharp rise in chauffeur costs, making autonomous driving options more attractive. The future will witness a focus on sustainability, digitalization, safety and expansion into tier 2 and tier 3 cities.”
The growth of both markets is primarily attributed to economic growth as India’s expanding economy and rising disposable incomes are driving demand for corporate mobility services. Along with that, regulatory changes such as easing of permit regulations and introduction of online aggregation platforms have facilitated market expansion, the RHP said. Technological advancements such as electric vehicles and ride-hailing apps are influencing both markets and offering new opportunities and challenges.
While the future looks bright, the sector faces challenges such as concerns related to vehicle licensing and driver training. Policy interventions are needed to address these issues and ensure sustainable growth.
Given its broader appeal and ability to meet the needs of a broader corporate segment, the ETS market is expected to experience faster growth, while the CCR market is poised to benefit from rising demand for premium services, especially among businesses and individuals seeking comfort, convenience and reliability.
Electric vehicles and advanced technologies are expected to play a crucial role in shaping the future of both markets, reducing operational costs and improving efficiency. The market will witness increased competition from other mobility solutions such as public transport, ride-hailing and self-driving car rentals.
First published: August 25, 2024 | 10:49 am IS
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