Sixt India to expand scope of business

Riding high on its successful B2B model, Sixt India, the car rental and leasing firm has decided to extend its scope of business into the area of self-drive. To begin with, it will let out cars like the Swift and Innova for individuals and families opting for a self-drive model. With the passage of time, the company may also offer convertibles as an option for the young at heart. It has also developed software that offers real time online booking for its cars. Sunjay J Kapur, CEO of Sixt India (controlled by Sona Mobility Services) told this correspondent that his company was bringing in a self-drive option where cars would be hired out at either a daily or weekly charge.
As of now, Sixt India will not be looking at any restricted self-drive where a person picks up a car in Delhi and drops it in Jaipur. “That trend has not started here in India. Today people are going to Jaipur and coming back. It could either be a business or family leisure trip. But we are open to one-way self-drives too and are starting a pilot lot with certain corporate houses,” he says. Kapur is not the least bit concerned about the risks involved in the self-drive business model. “There is no cause for worry. The cars are insured against theft and damage. With modern gadgets and technology, we can shut off a car engine through a simple SMS if we find something going wrong.

LEAP OF FAITH
“Someone has to take a leap of faith. As the market matures, we may go in for a retail pitch also. As we move forward, maybe in the next five years or so, the bulk of the business will come from self-drive as is the case globally. Roads in India are also getting better,” Kapur says.
According to him, with large townships coming up in and around Delhi, Sixt India could put up a lot of cars there for self-drive. He believes that there is an opportunity for convertible cars too especially on the Delhi-Jaipur or Mumbai-Pune routes and this business will, therefore, also evolve. Kapur is convinced that the self-drive business model has not been explored in the right way in India. Similarly, the car rental arena has been dominated by the unorganised sector, he adds. “This sector has had no solid corporate backing. We are going to target self-drive with corporate clients to begin with. There is great demand for cars on self-drive in offices for people travelling between cities or coming into India. It is a myth that people are afraid to drive on Indian roads and there is no reason why companies should not get into this business,” says Kapur.
Sixt India has been set up as a B2B company. It does a lot of research on clients it would like to reach out to. It also does not target weddings or one-off random clients. The company is in the car rental and leasing business with a master franchise from Sixt Germany (one of Europe’s leading car rental and leasing companies). The Indian arm has been operational for over ten months now.
Kapur says that the current fleet strength is around 300 cars which he feels is quite remarkable “because if you look at competition they have reached about 1000 cars in ten years”. At present, the company has 50 cars in leasing and 250 in rentals.

HUGE POTENTIAL
Being focused on the B2B model, Sixt India does not need to cope with the seasonal vagaries of business and, on the contrary, sees huge growth. It operates at about 140 percent utilisation in Delhi alone.
As Kapur puts it, “It is not easy to ramp up the vehicle fleet. In terms of OEMs too, one cannot go out and buy a Toyota Camry as it is sold out till March-April. The same applies to a Mercedes S-class which is just not available.”
Sixt India has tied up with ICICI Bank which does the financial lease with the former taking care of the operational aspect. As part of its leasing operations, the company maintains and services cars for its clients. It also offers a walk out option where cars are taken back at no extra cost. “Hopefully in the next few years, we will see the market moving towards retail space leasing on the lines of the West where cars are used for 2-3 years and disposed,” says Kapur.
Sixt India operates from four locations in Delhi in addition to Bangalore, Mumbai and Pune. The company, which owns all its operations, is the master franchisee for India, Nepal and Bhutan.

CALL CENTRE
It is also in the process of tying up with a call centre that has experience in airline bookings for international carriers as well. “We are trying to create a call centre setup with them so that all our calls across the country will be routed here. In short, one can make a real time booking for a car,” he says. Sixt India proposes to cover six cities by the end of this fiscal which would include Chennai and Hyderabad. This would go up to 14 by the end of 2007-08. “The first 14 cities in three years will be all on our own,” Kapur adds.
P THARYAN