Recently, we intracted with Mr. Afdhel AW, Founder, IndusGo – which provides hassle-free self-drive car options for Indian consumers.
Here are the interview highlights:
1. Please provide insights into IndusGo, including its business model, and services it offers. Also, elaborate on what advancements has IndusGo made in terms of the technology it utilizes since 2018.
IndusGo is a leading self-drive car rental company in India which works on a robust culmination of technology and innovation. IndusGo is a subsidiary of Indus Motors, a top Maruti dealership, and is disrupting the self-drive car rental industry by adopting a business model that is different from what our competitors have. Unlike many competitors in the market who consider their apps and websites as their primary products, we take a different approach. Our service itself is the product, which includes not only the vehicles but also cutting-edge technology that enables seamless vehicle rentals. IndusGo is currently focussing on deploying effective technological solutions in everyday operations thereby aiming to strengthen our customer satisfaction through technology. We have employed an improved user interface for the mobile app and website that allows our customers to book, modify, cancel, and extend their rentals amongst other features.
We are also looking at establishing a platform that respects the privacy of our customers and ensures that they can use our app without any hesitation. Further, IndusGo also has a 24/7 assistance portal that can be accessed through the app, website, or helpline.
Taking a different approach from that of our competitors, we have concentrated on having an asset-heavy model of business, wherein we invest capital into our fleet. This enables us to have liquidity in our assets when there is a need for cash. On the other hand, our competitors mostly subscribe to an asset-light model in which they do not own the cars but deploy cars that are owned by a third party.
2. What is the market outlook for IndusGo, and could you highlight emerging trends in the self-drive car rental industry?
Embracing the changing landscape of the automobile industry provides a promising opportunity for the self-drive car rental sector. According to a report by Knowledge Sourcing Intelligence, the Indian car rental market is estimated to hit a sterling $2.03 billion by 2026, a projected CAGR growth of 9.83%. This year we have seen a slower delivery rate of new cars, hence it provides an excellent opportunity for self-drive car rentals to harness it and broaden their reach. But it is very important that we also align ourselves with the call for sustainable automobiles through EVs. Such a push also works in the industry’s favor as EVs are an excellent way through which rental agencies can reduce the costs they incur, given the minimal maintenance and higher efficiency these vehicles promise. Further, a customer would any day choose an EV over a fuel-run car as the cost they pay to charge their EVs is much lesser than a full tank of fuel. However, there is another aspect that we are seeing on the rise in this industry. It is the need to make our operations more customer-centric. There is an
increasing need to integrate cutting-edge digital solutions so that customers can have a seamless, personalized experience on the portal.
3. Could you share your forthcoming expansion plan for IndusGo in the upcoming years?
IndusGo is currently looking at expanding the fleet of cars it holds. We raised INR 100 crore earlier this year through our parent company, Indus Motors. We are using this investment to procure more cars and induct them into our fleet and also to deploy advanced technologies. And we are not just looking at inducting cars, we will also be introducing electric two-wheelers and four-wheelers for the logistics, transportation, and deliveries market.
We aim to build a sustainable and customer-centric foundation within the industry. As part of our strategy, we are actively promoting the integration of digital solutions into our operations to ensure efficient time management and cost-effectiveness for our valued customers. We are also looking at external investments, probably an IPO. The reason behind this decision is to prioritize a positive and sustainable approach. While many VCs may focus on investing in marketing, we firmly believe in the value of procuring assets. Until we find an investor who aligns with our vision and shares our thoughtful approach, we are currently not actively seeking VC involvement in our discussions.
4. What challenges do car rental companies in India encounter, and how do they tackle them?
One of the primary areas of concern that car rental companies encounter is an organised infrastructure. A car rental company needs massive capital to purchase vehicles, which is proving to be a difficult task given the rate of inflation and the lack of investors boosting the procurement. Secondly, we also need a robust legal framework that lays down policies that will further strengthen how players in this market operate. Such policies also ensure that there is healthy competition and break the monopoly. However, as we look at inducting more EVs into our fleet, the biggest problem we face is how sparse the reach of such an idea is. In Tier-1 cities we do see a point of inclusivity when it comes to EVs but tier-2 and tier-3 along with villages are not equipped with charging points, or service stations that can facilitate this transition. Coming to the responses to these issues, firstly, we need to push for policy-making in this regard. There is ample space within the market for parameters to be held in place that can regulate the business from both the perspectives of the customers and the owners.
Secondly, multiple players in the market are exploring newer ways of business management. This stems from intensive market research and case studies that give us insights into what has worked for our competitors and what has not. Thirdly, emerging players in the market will have to concentrate on strengthening the infrastructure before they can shift their attention to marketing. They need to induct more EVs into their fleet than fuel-powered automobiles. Additionally, they will have to push for charging points, maintenance hubs, and other logistics to penetrate deeper into the tier-2 and tier-3 cities along with the heartlands. Lastly, self-drive car rentals need to be inclusive of newer technology and ideas that can help them nurture the market that is still in its nascent stage.
5. Elaborate on the EV vehicles that were added to the fleet and how EVs are expected to impact the future of transportation.
As mentioned earlier, the future of the automobile industry is entirely directed toward EVs. As we look to induct more vehicles into our fleet, we are going to be primarily inducting EVs. For instance, we recently got about 50 Tiago EVs and are looking to place more such orders. Additionally, IndusGo will also be placing orders for Electronic logistical vehicles and two-wheelers in the near future.
This push for EVs looks promising when it comes to the future of transportation, as it enables buyers to invest in vehicles while knowing that the maintenance costs that they incur in the upkeep of these vehicles will be minimal as compared to fuel-run vehicles. Further, EVs are the right step in the direction of sustainability and clean energy.