Car subscription will be a hit in post COVID-19 market: Hyundai Motor India

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Coronavirus pandemic is going to have a multi-pronged impact on the India automobile industry. The pandemic has lowered the buying sentiment and purchasing power in case of a lot of consumers who are not likely to spend money on buying new cars. At the same time, one can expect entry-level vehicles' demand to increase given that many will shun public transportation and shared mobility and will gravitate towards personal vehicles because of social distancing. Furthermore, carmakers will also have to rely on digital sales model as consumers are unlikely to visit dealerships because of a fear of contracting virus. So, in a nutshell, the Indian car industry will have to adapt to emerging customer needs. Along with this, there is another demand that carmakers will have to cater to -- subscription options instead of upfront buying. In a discussion with Team Times Drive, Tarun Garg, Director - Sales, Marketing, and Service, Hyundai Motor India, mentioned that there is a good chance that a lot of customers will opt for subscription plans while buying a new vehicle.

Now, in case you didn't know, a subscription plan allows customer to buy a car by paying monthly or yearly subscription charges instead of the conventional financing method that includes a down payment and monthly EMI. The biggest benefit with subscription plan is that it includes additional expenses like maintenance cost, registration charges, and road tax. This not only provides less overheads but is also financially viable for those who want cars for a duration shorter than usual ownership period. As per Tarun Garg, a yearly subscription plan costs significantly less than a new car's yearly EMI. In line with this, we believe that subscription-based ownership model will interest those who are shunning shared mobility and public transportation for affordable personal mobility.

Hyundai Motor India was one of the first carmakers in the country to offer subscription-based ownership plan, which was launched last year in partnership with Revv. As noted by Tarun Garg, over 2,500 customers have opted for subscription model since it was launched. Besides that, Hyundai has also joined hands with ALD Automotive to offer cars on lease, something which is usually preferred by working professionals, salaried individuals, and even small and medium enterprises. And in a bid to improve sales, the company has introduced EMI Assurance plan that offers cover for three installments of car loan and has also launched five different car finance schemes.