In mature automotive markets like Thailand and Western Europe, corporate fleets account for roughly 35 percent of total passenger vehicle sales. In India, that figure sits below two percent, according to industry estimates from vehicle-leasing operator Ayvens. The company argues that the market remains suppressed because Indian employers treat cars as executive compensation perks rather than basic operational equipment for mobile sales and service teams.
According to Suvajit Karmakar, Country Managing Director for India and Asia Sub-Regional Director at Ayvens, the retreat of company cars from field roles began in the early 2000s as corporate compensation packages shifted to Cost-to-Company (CTC) structures. The change stripped assigned transport from middle management and sales representatives, pushing workers onto personal motorcycles or public transport.
"Car is still seen as something which is more associated with the status or the hierarchy of the person," Karmakar said. "Whereas, who really needs a car? A guy who is actually out on the field to meet his clients."
This status-driven policy creates sharp regional disparities when compared with other emerging Asian economies. Karmakar cited internal data from a multinational pharmaceutical client operating in India, which maintained just 89 company cars for a workforce of over 5,000 medical representatives.
"In the Philippines, they had 1,400 cars. In Pakistan, they had 500 cars," Karmakar said. "That hurts, right?" He argued that corporate policy frequently overlooks basic employee welfare and operational efficiency. "As a country, as a corporate, we do so much of CSR. Charity begins at home. Let's take care of our employees. These guys who are actually our brand ambassadors, who are on the field meeting your customers, you ask them to take public transport or bring their own car."
Route Economics and Operational Reality
To frame the operational argument, Ayvens compares the monthly expense of a dedicated leased fleet against app-based ride-hailing services. Karmakar estimated urban app-cab travel at ₹26 to ₹27 per kilometer. By comparison, leasing an entry-level compact vehicle costs ₹15,000 to ₹17,000 monthly in rentals, plus ₹8,000 to ₹10,000 in fuel for a monthly distance of 1,000 kilometers.
"Your organisation can lease a similar car for 15,000 or 17,000 rupees per month, all inclusive, plus whatever your fuel expense is," Karmakar said. "You are actually spending less than your Uber or Ola."
With that arithmetic, the baseline financial costs between leased rentals and app-cabs remain close. However, leased fleets offer distinct operational utility for specialized field duties. He points to the field engineers at tool manufacturer Hilti, who require boot space for heavy demonstration kits and cannot rely on ride-hailing drivers who may reject cargo.
Similarly, agribusiness companies deploy fleets of over 1,000 leased cars to representatives travelling through rural districts in Assam, Bihar, and Odisha where public transit is nearly non-existent. These firms outsource entire fleet logistics to Ayvens, avoiding internal fleet management overhead.
Moreover, maintaining field cars across regional networks requires specialized operational support. Ayvens maintains contracts with 2,700 service workshops across India and provides breakdown support within a 100-kilometer radius of 750 locations. Because traffic incidents in rural corridors frequently lead to administrative delays, the firm provides 24/7 legal assistance to drivers involved in road accidents or police disputes. Contracts can also include replacement vehicles to ensure field staff remain mobile while regular cars undergo repairs.
Regulatory Hurdles and Powertrain Financials
Powertrain strategies are also shifting as fleet operators attempt to lower corporate emissions. Ayvens reported a reduction in its average fleet CO2 emissions from 136 grams per kilometer in 2024 to 127g/km in 2025, targeting 120g/km or lower in 2026. In 2026, electric, hybrid, and CNG models made up 27 percent of new vehicle deliveries. However, hybrids remain the preferred low-emission alternative for long-distance field staff because drivers avoid public charging delays.
Electric vehicles present distinct financial risks due to residual value drops. Ayvens reported losing ₹2.5 lakh to ₹3 lakh per vehicle on early electric cars leased between 2017 and 2019. Over four-year contract terms, usable battery range fell from an initial 180 kilometers to 70 kilometers, forcing the company to sell returned vehicles to salvage buyers. Currently, Ayvens benchmarks EV residual values 20 to 25 percent lower than equivalent internal combustion engine vehicles.
Regulatory frameworks continue to slow corporate fleet expansion. Under the Motor Vehicle Act, leased vehicles in India must be registered under the lessee's (client's) name rather than the lessor's. This requirement complicates simple maintenance tasks, such as obtaining mandatory One-Time Passwords sent to client phones for vehicle fitness tests. Crucially, the rule prevents lessors from expanding into retail or SME leasing, where recovering a vehicle from a defaulting customer requires long court battles to establish legal ownership.
In addition, tax transitions have created additional losses. When the federal government restructured GST rates and removed automobile Cess a year ago, fleet operators were left holding unrecoverable Cess tax credits paid on existing vehicles. With no mechanism to collect Cess on ongoing rentals to offset these credits, Ayvens had to request financial compensation directly from corporate clients, causing contractual friction.
Ayvens projects its active fleet in India will grow from 48,000 vehicles to 60,000 by 2027. To support broader urban mobility research, the company collaborates with Immersive Technology and Entrepreneurship Labs (ITEL), an initiative backed by IIT Madras. Ayvens helps fund an ITEL project developing elevated, autonomous transit pods designed to travel 20 kilometers in 24 minutes, with an initial prototype undergoing testing in Sri City, Andhra Pradesh.
Unlocking the full potential of India's commercial fleet market requires employers to re-examine transport as an operational necessity. Karmakar cited an online search query estimating India's field workforce at 7.4 million staff, noting that Ayvens' internal fleet extrapolation suggests company cars currently serve only 30,000 to 40,000 of them. While these figures represent rough market extrapolations rather than a national workforce study, auto lessors view the gap as an untapped growth market if corporate India shifts its car policies from senior executive compensation to front-line utility.