Nearly 40% Of Our Clients Are Now Indian Companies: ALD Automotive
French operational car leasing firm ALD Automotive, at present, has a fleet of around 11,500 vehicles catering to more than 900 corporate customers in nearly 300 locations across the country. A fully-owned subsidiary of Societe Generale Group, the Indian arm of ALD Automotive is active internationally and manages around 1.4 million vehicles. Interacting with BW Businessworld, Suvajit Karmakar, CEO, ALD Automotive Pvt Ltd maintained that Indian companies now account for nearly 40% of its total client base.
It is been over 12 years that ALD Automotive is present in India. How has the vehicle leasing market evolved over the years?
We offer Operating Lease with Fleet Management Services like insurance, vehicle maintenance, breakdown assistance, Pick up and Drop, etc., which are offered on an optional basis. When we had entered India, VAT had just come in. Prior to that, we had Lease Tax. Now with the GST coming in, there will be a transition in the taxation structure. The Indian vehicle leasing market has quadrupled from 3,000 units per annum to 12,000 units per annum. When we had begun our operations (in India), our primary objective was in tapping the foreign multinationals in order to capture the (vehicle leasing) market. But today nearly 40% of my portfolio (of clients) comes from Indian companies from different sectors like Pharmaceutical, FMCG, Information Technology, etc. Of late, we have also started focussing on the agricultural industries. So it is no more an international concept embraced by overseas companies.
What is your current fleet size? Are you planning to ramp it up further?
We are running a fleet of 11,500+ vehicles and all of them are company-owned. Considering the size of the country and the total vehicles sold per annum, it is fairly low. But then, the industry itself has not penetrated much. Keeping in mind the tax changes, we are evaluating the implications. We are only focussing on Corporates which are now opting big time for leased vehicles. Apart from MNCs, we are also planning to tie up with SMEs as well professionals like doctors, CAs, etc. We will be offering personalised services to them in order to serve their needs better. We are looking for a gradual growth and are looking at having 17,000 vehicles in our fleet by 2020.
How important is the Indian market for ALD globally?
If you look at ALD globally, we are present in Europe, North Africa, South America, and India and China in Asia. As matured markets in Europe is saturating, India is definitely one of the emerging markets for us globally. We have a direct presence in Mumbai, Delhi, Hyderabad, Chennai, Pune and Bengaluru and an operational reach in all major cities across the country. In fact, we figure among the top 20 markets for ALD globally. Going forward, there is a possibility that India can become our top 5 markets globally. The key growth drivers will be the ease of doing business, favourable policies, rising acceptance of leased vehicles, etc.
What are the challenges that you are witnessing in your business?
Unlike Europe, we don’t have a national level supplier who can be a one-stop shop for all brands when it comes to after-sales services. So we need to have a lot of people on the field to do tie-ups and ensure that every case is handled properly. The other challenge is that the current Motor Vehicle act recognizes only the registered owner. In our case, the registered owner is my customer and the car is owned by us. So we are a lessor which many times people do not understand. With the new GST rates on automobiles, the lease rates will also go up marginally.
