Car leasing market to cross 1 lakh units per annum in 3 years, says Mohammed Turra of Quiklyz

Quiklyz, the leasing arm of Mahindra Finance expects the vehicle leasing market to grow at double the pace of car sales growth and cross the 1 lakh units mark in the coming three years. 

Mohammed Turra, Founding Member and Business head of Quiklyz says he expects the leasing market to grow at 15% in the coming years. Talking about the strong traction in the marketplace post Covid, he said that the market has grown from 40,000 units per annum market to over 60,000 units in 2023, and is well on its way to crossing the 1 lakh annual leasing market in the mid-term.

“Over the last few years, the market has accelerated because of new entrants and increased awareness amongst car users. Corporations are increasingly preferring to lease vehicles over acquiring vehicles and put it on their balance sheet. With the launch of more EVs, the personal buyer segment will also offer heft to this momentum,” added Turra.

HR heads at various companies are warming up to leasing as a perk and the employee benefits are getting streamlined and restructured to make it a much more tax-efficient exercise for the employees and the company.

Mahindra entered the leasing space almost 5 -6 years ago in 2018-19, the idea took shape after the implementation of the Goods & Services Tax, that led to streamlining of segments.

Mahindra Finance wanted to capture the entire finance journey in mobility ownership. Leasing as a concept has a strong acceptance globally, but it still remains suboptimal in India.

The company tested it as a part of Mahindra Finance's product offering before it was carved out as a dedicated leasing arm. 

Unlike the other operating lease companies, Mahindra Quiklyz can tap into Mahindra Finance's network to sell its product. The company has a network in excess of 1200 touchpoints, which are already plugged into. Quiklyz has dedicated teams in 10 markets, it does active business in 20-25 major cities.

Mahindra Finance has been generating business of over Rs 50 to 70 crore per month under Quiklyz and it has assets under management of close to Rs 1000 crore under its leasing business.

Mahindra Finance claims the company has developed value proposition for corporates to take vehicles on lease as they can gain from tax benefits as well as not pass on their burden on the balance sheet. It offers both options of wet and dry lease. If the customer wants Quiklyz to maintain the vehicle, then they can opt for a wet lease.

The company has already partnered with some big last mile and shared mobility providers to tap into this fledgling market.

Mahindra Finance has already extended over 500 EVs to NCR-based ride-hailing platform BluSmart in 2022.

In 2023, the company also signed an MoU with five last-mile mobility providers to supply 1000 electric three-wheelers by the first half of 2023 on lease – right from Mahindra Logistics, MoEVing Urban Technologies, Creativity at Best Technologies, Magenta and Terrago Logistics.  

Mahindra Quiklyz leases about 15,000 vehicles per annum – which includes passenger vehicles, three-wheelers, commercial vehicles and construction equipment.

Quiklyz claims it currently has the largest portfolio of electric vehicles (EVs) on its leasing and subscription platform. It provides both Electric 4Ws as well Electric 3Ws across OEMs including Mahindra, Tata Motors, Piaggio, Mercedes-Benz etc. Quiklyz’s value proposition for its customers includes zero down payment schemes, flexible tenure options, no resale or maintenance hassle, and much more.

It has partnered with more than 15 electric last-mile mobility delivery companies and several electric mobility providers since its inception. The platform has leased electric vehicles across cities including Mumbai, Bengaluru, Chennai, Delhi, Hyderabad, Pune, Noida, Gurugram, Indore and Nagpur.

About 20% of the total fleet of Mahindra Is EV, Turra expects it to increase to 25% - he, however, expects the inflection to hit around the calendar year 2025 when there are more options in the marketplace.

The company has set itself an immediate target of Rs 5000 crore of Assets Under Management by next year, with a midterm goal to touch Rs 10,000 crore.

Turra says there are many intenders, but the shift takes time, that is what, Quiklyz is working on to encourage these fence-sitters to shift to leasing.   

“Pricing is a challenge; it is still very expensive; we are trying to see that the leasing cost is at least 25% lower than the EMI for a prospective car user to shift from acquisition to leasing,” he added.

The head of Quiklyz says the penetration of leasing in India has touched about 1.5% and Turra feels this penetration could go up to 5-6% by the end of the decade and cross about 2.5 to 3 lakh units.