Toyota India bets on leasing, short-term subscriptions

We are in the times of Covid-19, and demand for private vehicles is growing at the expense of public transport or ride sharing. Indeed, the Malaysian used car market has seen year-on-year growth of over 100% in the first half of 2020, and Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad points to coronavirus fears as a factor.

The same growing demand for private transport is also being seen in India, which has the third highest number of Covid-19 cases in the world behind USA and Brazil. In an attempt to tap into this demand, Toyota is now offering its cars on leases or short-term subscriptions in India. The new vertical is called Toyota’s Mobility Service (TMS).

Customers can pick cars of their choice for a tenure of three to five years on a fixed monthly fee on lease. The fee will be inclusive of vehicle maintenance, insurance and roadside assistance. For subscription, customers will have the flexibility to opt for short-term usage of 24 to 48 months.

Available models include the Glanza hatchback, Yaris sedan (Vios), Innova MPV, Fortuner SUV and the upcoming Urban Cruiser compact SUV. Monthly fees start from as little as 21,000 rupees (RM1,171). TMS is now available in Delhi, Bangalore and Mumbai, but there are plans to expand it to 10 more cities within the first year.

According to Naveen Soni, senior VP of sales and service at Toyota Kirloskar Motor (TKM), the need for safe transport is growing and leasing or subscription offers a more cost-effective solution than outright buying a car.

“The automotive industry globally is experiencing a ‘once-in-a-century’ profound transformation and it is imperative that we as automobile manufacturers, transform ourselves from a traditional car company to a mobility company. Both leasing and subscription are expected to grow significantly in the coming years,” he said.

“We would like to follow the changing customer behaviour in the country where customers prefer ‘using a car’ rather than ‘owning a car’ due to the prevailing circumstances,” Soni added.

India market leaders Maruti Suzuki and Hyundai have formed partnerships to offer similar services as well, so this is a new frontier in the subcontinent’s auto market. In Malaysia, the main mover of car subscription is Renault distributor TC Euro Cars. Click on the link to learn more about this alternative to traditional car ownership.

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