Eyeing To Induct 1 Lakh Vehicles In Our Fleet By 2022: LeasePlan India
LeasePlan, an international company of Dutch origins specializing in fleet management, began its operations in India in 1999. Having pioneered the concept of car leasing in India, LeasePlan is the market leader in vehicle acquisition and fleet management.
In an exclusive interview with BW Businessworld, Sanjeev Prasad, Managing Director, LeasePlan India stated that the company is planning to ramp up its existing fleet from 14,000 vehicles to one lakh vehicles by 2022. Below are the edited excerpts:
Has the vehicle leasing industry taken off in a gigantic manner?
The vehicle leasing industry per se is not an invention and has been there for many years in matured markets like Europe, US, etc. The corporates based there rarely buy cars and instead follow the leasing route. It makes a lot of sense for them administratively, financially, and also for mitigating risks. This concept doesn’t need to be proved over and over again.
But in India, it is yet to take off in a gigantic manner as the level of awareness among all the stakeholders is quite low here. However, the situation has improved over a period of time. With the implementation of the GST, I am confident that the whole process will be streamlined further.
Are you into operating lease only or you are also into financial lease? Who are your target group?
We are 100 percent into operating lease and have been initially targeting the global MNCs which have set up their base here. Then we started working with Indian companies which are also going global in their outlook. Eventually, we received a good number of orders from Public Sector Undertakings (PSUs). Of late, the Directorate General of Supplies & Disposal (DGS&D), which controls all the purchases of the central government, is now actively looking at premium services like leasing.
Instead of buying cars and going for capital expenditure, they are deliberating on leasing cars which will be revenue expenditure. We also see some green shoots in small and medium enterprises (SMEs) which are interested in our business model. Going forward, our business will be equally split between various sectors that I have just mentioned. Talking about financial lease vertical, we will get into this when the market matures.
What is your current fleet size and what kind of vehicles are they? Do you intend to ramp it up further?
We are running a fleet of 14,000 self-owned vehicles spanning across various segments like compact cars, utility vehicles, premium sedans and right up to luxury cars. A major chunk of them comprises C-segment cars and utility vehicles and we usually hold the vehicle for five years.
We are also open to the idea of inducting buses in our existing fleet to serve additional market segments and that fits into our overall game plan. Our vision is to reach 100,000 cars in 5 years.
How much have you invested in India and how much have you earmarked for 2022?
Our entire portfolio of 14,000 vehicles is itself worth Rs 800-1,000 crore. Going forward, we might spend a similar amount within a short span of time.
Do you see taxi-aggregators like Ola and Uber as a threat?
Not at all. In fact, we see them as an opportunity for us. We can actually complement each other because they are more into short routes and not into long term agreements (of cars). Secondly, these companies also need cars and will stand to gain if they lease the cars from us.
Please can you reveal some of the key clients you are working with?
We have clients from diverse industries and are working with Prime Mover Mobility Technologies (Revv Cars), CGI, Willowood, Monsanto, Gharda Chemicals, Dhanuka Agritech, GE Power, Hitachi Metals, QH Talbros, etc. Some of the PSUs that we have tied up with are BHEL, GAIL, EIL, etc. With a direct presence in Delhi/NCR, Mumbai, Kolkata, Ahmedabad, Bangalore and Chennai, LeasePlan has operational reach in all major towns and cities across the country.
Are you interested to tap individual buyers too?
Although private lease is some years away, it will definitely gain momentum. In India, this idea (among individual buyers) will catch up at a faster pace vis-à-vis other countries.
Apart from these, what are your long term strategies?
We are digitally transforming ourselves in order to provide a better experience to our customers. Once we get the legal permit to register as an NBFC, we might explore getting into financial lease. We are working on strategies to have 1 lakh vehicles in our fleet. It would be fair to say that India will be one of the largest operating lease markets for us across the globe.
