Operating Lease to drive the Fleet

Leasing Growth in India, Finds Frost &

Sullivan

Research PREVIEW for

Strategic Analysis of Indian Fleet & Leasing Market

Key Findings

Company Car Market

• The company car market contributed to approx. 8% of the total new registration of passenger vehicles in 2015

• Outright purchase dominate the market. Operating lease which is expected to grow at a 25% CAGR (excluding the cab

leasing market) from 2015-2020 is expected to drive the vehicle leasing market growth.

• There are approximately 15 players in the organized market who offer one or more fleet leasing services - operating

lease, financial lease or fleet management services

1

On Road Leased Vehicles in India

• The Indian passenger vehicle fleet & leasing market is an untapped market with an active fleet of approx. 52,300

passenger vehicles in the organized market

• The average lease period for a passenger vehicle is approximately 3 years

• The residual value of the vehicle depends on the lease tenure, the OEM brand of the leased vehicle and the purpose for

which vehicle was leased (tool for trade or personal use) and may vary from 20% to 60% of the vehicle’s original price

2

Operating Lease

• Around 2.75 lakh vehicles have been leased under operating lease so far.

• As of 2015, operating lease is a Rs. 1120 crore market has an active fleet of around 42,100 passenger vehicles in the

organized market

• LeasePlan, ALD Automotive, Sundaram Finance and Arval contribute to more than 69% of the total market

3

Financial Lease

• As of 2015, financial lease is a Rs. 370 crore market has an active fleet of around 10,200 passenger vehicles in the

organized market

• Auto Infrastructure Services Ltd (OAIS) and Magma Auto Lease contribute to more than 92% of the total financial lease

market

4

Fleet Management

Source: Frost & Sullivan analysis.

Company Car and Leasing Market—Segmentation

Total Market

Fleet Registration

Company Cars Rental Cars Dealer Manufacturer

Operational Leasing Financial Leasing Outright Purchase

Cars used for Auto Expo,

exhibition, R&D, Advertising

etc.

Cars used for display,

replacement vehicles, test

drives in dealerships

Companies providing self drive

cars, taxi Fleets etc.

Cash & Credit Purchase Consumer Leasing

Retail Registration

Vehicle as a perk

Vehicle as a

“Tool for Trade”

Business Vehicle

Leasing

By End Usage By Vehicle Type

Passenger Vehicles

Passenger Cars

Utility Vehicles

Vans

Light Commercial

Vehicles

Passenger Carriers

Goods Carriers

Company Car and Leasing Market—Segmentation

Source: Frost & Sullivan analysis.

Vehicle as a part of CTC

Consumer Leasing

Private Leasing

Source: Frost & Sullivan analysis.

Low High

Low

High

Certainty

Imp

ac

t

These are the factors with the greatest impact

on Fleet & Leasing Market in 2015 and

forward.

Increasing

Awareness

GST Implementation

Improvement in Fleet

Analytics & Reporting

More captives

(NBFCs) offering

leasing services

Increase in number of

Vehicle models launched

Growth in Short Term

Rental market

Growth in Cab Leasing

Market Trends Increasing awareness about benefits of leasing and progress in GST implementation opens up new

opportunities for vehicle Leasing

2015 Post-2020

Future Business Models – Fleet & Leasing Firms

Fleet

Leasing

Company

Vehicle

Leasing

Fleet

Management

Short Term Long Term

Source: Frost & Sullivan analysis.

LCV

Leasing

Self Drive

Cars for

Tourism

Passenger

Vehicle

Leasing

Fleet

Leasing

Company

Fleet

Management

Short Term

Rentals Corporate

Car

Sharing

Website –

Fleet

Consulting &

Service

comparison

• The vehicle leasing companies currently provide only operating lease, finance lease and fleet management Services. Few

firms also provide LCV leasing, corporate car sharing and short term rental but it is not prevalent across the market

• In the next 5-7 years, we would see Indian leasing firms expanding their product portfolio to short term rentals, LCV leasing,

corporate car sharing and other services

• Companies might come up with website which compares the fleet & leasing market players in terms of product portfolio,

services provided and the cost of availing the services

Partial List of Companies Interviewed

Source: Frost & Sullivan research.

Company Contact Designation

Arval Head of Sales

LeasePlan General Manager - Sales & Marketing

ALD Automotive Deputy CEO

TranzLease President

ORIX Operations Manager

Magma Auto Lease National Head

SMAS Auto Leasing Assistant Manager- Sales

Tata Capital Assistant Vice President - Sales & National Product Manager

Sundaram Finance Head of Leasing (South Region)

Ford Fleet Business Centre India Head for Corporate Sales

Fortpoint Leasing Solutions Executive Vice President - Leasing & Fleet Management

The Full Analysis Features the Following Content

Section Slide Numbers

Executive Summary 7

Research Scope, Objectives, and Methodology 14

Definitions and Segmentations 21

Indian Automobile Industry Overview 28

Indian Fleet & Leasing Market Overview 38

Indian Fleet & Leasing Market 39

PESTLE 40

Market Trends 41

Fleet & Leasing - Market Scenario 42

Fleet & Leasing - Business Prospects 43

Consumer Trends 44

Indian Fleet & Leasing Market Analysis 45

Company Car – New Registration and Forecast 46

Total Vehicles Leased – Active Fleet size and Forecast 47

Operating Lease– Active Fleet size and Forecast 48

Financial Lease– Active Fleet size and Forecast 49

Section Slide Numbers

Vehicle Leasing based on Usage– Active Fleet size and Forecast 50

Premium Vehicle Leasing– Active Fleet size and Forecast 51

Key Market Players and Service Offerings 52

Service Offerings and Fleet & Leasing Value Chain 53

Key Suppliers – Operational & Financial Lease 54

Key Suppliers – Market Share 55

Key Supplier Offices & Growth Opportunities 56

External Challenges – Drivers & Restraints 61

Taxes & Vehicle Registration 66

Mega Trends 72

Cab Leasing 74

LCV Leasing – Active Fleet size and Forecast 75

Car Rental 77

Corporate Car Sharing Services 78

Car Pooling Services 79

Telematics and Fleet Management Service Range 81

Future Mobility Business Models 83

Conclusion, Recommendation and Future Outlook 84

The Full Analysis Features the Following Content (cont’d)

Key Questions This Study Will Answer

Source: Frost & Sullivan analysis.

What is the size of Company Car, Operating Lease, Finance Lease and Outright purchase market in India?

What is the short-to-medium term outlook for the Indian Fleet & Leasing Industry?

What are the main growth drivers and industry challenges?

What is the business environment of the fleet and leasing market in the India? What are the dynamics and trends of the

market?

What is the structure of the Indian Fleet & Leasing Industry? Who are the key industry participants?

Interested in Full Access? Connect With Us

Anita Chandhoke Corporate Communications

P: +91 80 67028020

E: achandhoke@frost.com

Research Authors

Lead Analyst

Neha Makdey

Senior Research

Analyst- Fleet &

Leasing

Automotive &

Transportation

Research Director

Graeme Banister

Director of

Consulting – Fleet &

Leasing

Automotive &

Transportation

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