| 3 minutes read

3 minutes read

Here’s What Cars Company Heads Think Over Ola-Uber Theory

| Published on September 17, 2019

What is your means of travel to work? For most of us, it is none other than the app cab aggregators, Ola/Uber. Even the Finance Minister Nirmala Sitharaman made a comment about the “millennial mindset” of preferring Ola/Uber for the commute.

Every individual has his own views and when it comes to the car company bosses they have a completely different opinion when it comes to the rise of app-based cab aggregators. These industry stalwarts have made a great impact not only in the sector of automobiles and but also in the field of app-based cabs.

How? Want to know? Let us understand and analyze what stalwarts like Anand Mahindra and RC Bhargava have said on this subject because listening to the best is the best learning.

RC Bhargav, Chairman and CEO of Maruti Suzuki.

How did the company affect the app-cab market?

While around 8 percent of Maruti Suzuki’s cars were sold to taxi aggregators, it is not alone, as by 2016 itself a third of auto sales were from cab operators. In fact, Maruti has been among the front-runner in joining hands with cab aggregators to create an alternate demand source.

Opposing Sitharaman’s Opinion

Sitharaman said that millennials do not want to take up EMIs. Bhargava points out that cars have become expensive, and so have the insurance premiums on them, which in turn significantly drives up the EMI amount.

His views on Ola and Uber

He states that the effect of “structural shifts” is negligent compared to the strain from other mentioned factors, namely the “risk-shy” banking sector with “paralysis of decision-making” as the biggest issue. Bhargava said that people who cannot afford to own a car of their own because it is too costly, will still use cars for family journeys, and the one way they can afford it is via cab aggregators.

Anand Mahindra, Chairman of Mahindra & Mahindra.

How did the company affect the app-cab market?

The company tied up with Ola to provide over 10,000 e-rickshaws and electric auto-rickshaws. In 2018, Mahindra & Mahindra had supplied over 40,000 cars to Ola in two years, earning the group a business of ₹2,600 crore.

His views on Ola and Uber.

Mahindra believes that the millennial age that has almost immediate access to the taxi-hailing apps like Uber and Ola is the biggest potential threat to the auto industry. A lot of youngsters who can own vehicles today do not want to own one, but only need access to transportation. Mahindra’s view of cab aggregators as a threat has made his company one of the more proactive ones in an industry that is witnessing dynamic changes.

Now that both the big people of the auto industry has contrasting viewpoints, the mass is confused with the final conclusion. As of now the negative growth in the auto industry has taken a toll for almost all the car companies. Let’s see what the future beholds.

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