June 14, 2012: Car rental major Avis India has rolled out its operating lease services for the corporate sector that is expected to rake in a business of around Rs 150 crore for the company over the next two years. Avis, which also rents out cars, is optimistic of closing the current fiscal at Rs 150 crore with a major portion contributed by the leasing business.
The flagship product under Avis Lease will be the red carpet lease that will offer facilities of fleet advisory, vehicle acquisition, insurance, repair and maintenance, stay new plan, accident management, vehicle upgradation, 24x7 road assistance, replacement vehicles, field technician support and vehicle disposal. The leasing system will enable corporates to offer extended mobility to executives along with personalised service facilitated through tax benefits for leasing services.
Avis India’s CEO Sunil Gupta says that the concept of operating lease has been growing in the country and major MNC and Indian corporate houses are moving towards taking cars on operating lease instead of buying them. Of the total cars sold in India, only 10 percent are purchased by corporates, of which only 10 percent are leased. Hence, Avis visualises a huge potential for growth for the operating leasing business in India and to give it further impetus has appointed Karunesh Arya as the new COO of Leasing.
Avis plans to invest Rs 700 crore on the operating lease business over the next 3 to 4 years with a target of 7,000 cars functioning on operating lease, according to Arya. In addition, another Rs 250 crore will be invested on strengthening the company’s car rental business with both being funded through a 4:1 mix of debt and equity.
At present, the 45,000 vehicle operating lease market in India has five major players fighting for space and Avis expects the sector to grow at around 27 percent per annum.
Besides its red carpet lease solution, Avis will also offer premium lease, fleet consultancy and fleet management services.
A joint venture between the Oberoi Group and Avis Budget Group, the India arm of Avis has a fleet of 1,400 cars ranging from premium hatchbacks like the Toyota Etios to luxury saloons like the Mercedes-Benz S-class. Similar cars will be offered under the leasing solution supported by the customer’s choice.
SHOBHA MATHUR