You’ve landed in Guwahati or maybe Baroda and need a car to pick you up. How about sinking into the plush comfort of a limousine and being whisked to your meeting or hotel? The car is driven by an English-speaking chauffeur (in uniform) and is outfitted with an umbrella, torch, first-aid safety kit and even a fire extinguisher, besides, of course, the day’s newspaper (a nice touch).

Then again, you could take a driving holiday to the Golden Triangle (that’s Delhi-Agra-Jaipur) by hopping into an SUV — a Mitsubishi Pajero perhaps — in Delhi and then driving yourself, your family in tow, to Agra and from there, to Jaipur. Drop the vehicle back with the car rental company in the Pink City, and fly back home.

Welcome to a world where hiring a car — from a Mercedes S-Class to a humbler Santro — in practically any city in the country is just a matter of making a call to a fully professional car rental company. Some of the best in business are driven by international brands (think Sixt, Avis, Europcar and Budget Rent a Car), that have over the years padded up their fleets in a big way, offer idiot-proof websites where you can book a vehicle and are also on call by punching in a central reservation number.

The car rental business is not what it used to be — even as recently as five years ago. From being fragmented and unorganised, today it’s stepping on the gas and zooming ahead. There was a time when the market was dominated almost entirely by small operators with a handful of badly-maintained cars (with even more disreputable drivers).

But all that is changing now. Rajiv Vij, managing director & CEO, Carzonrent India, reckons that his company is “an Indian car rental brand that’s operating on a global scale” in terms of fleet and operations. He says: “Today, the organised part of the industry has grown at double the pace compared to the growth of the overall car rental industry.’’

Rajiv Vij, managing director & CEO, Carzonrent India

J. J. Ghadiali, managing director, International Travel House

Sunil Gupta, CEO, Avis India

Sunjay Kapur, chairman, Sixt, India

So, cut to 2011: there are some 20 organised players, Indian and foreign brands, with a national presence out there on the roads providing business and leisure travellers a range of services. Says Jehangir J. Ghadiali, managing director, International Travel House (ITH): “The booming economy has led to a considerable growth of corporate business. Also, there has been an increase in the number of overseas visitors to India for both leisure and work, which has boosted business.’’

And even though a considerable chunk of the car rental business continues to be unorganised, experts say that the organised sector has been racing ahead and witnessing strong growth.

“This is a highly service-oriented business and companies are vying with each other to offer a large bouquet of services,” says Sunjay Kapur, chairman Sixt, India - Sona Mobility Services.

Besides the chauffeur drive/self drive options, today there are luxurious limousine services (some of the car rental companies are even getting into radio taxi services). There’s also the long and short-term hire options for companies and corporate fleets that are being managed by car rental companies.

So, Carzonrent zips around with over 6,400 cars through the country, while the other big players include Avis with its 1,400 cars, ITH with a fleet of 600 and ECO Rent A Car with another 800.

Says Raman Mohan, a travel industry expert and CEO, Media Matters, a travel industry consultancy: “The car rental business is going strong and the market is competitive and well-priced.’’

Additionally, there’s a large variety and choice of cars available today. “Quite a change from the days when the stodgy Ambassador was practically the only tourist vehicle on the roads,’’ says Vij.

So in the economy segment there’s the Suzuki Swift and Santro, while the mid-segment is ruled by the Suzuki Swift Dzire, Ford Fiesta and Honda City. At the premium end of the market you could travel in anything from a Toyota Corolla Altis or a Toyota Camry to a BMW 5 Series or a Mercedes S-Class. Then there are the SUVs that are extremely popular — the Toyota Innovas, Tata Safaris, Ford Endeavours and Mitsubishi Pajeros. There’s more: luxury vans including the Toyota Commuter and the Mercedes Viano and Volkswagen Crafter and Caravelle. Just take your pick.

ON THE ROAD

Tie-ups and huge investment are the name of the game. So, Kapur’s operation is a marketing franchisee of Sixt and Avis India, a joint venture between The Oberoi Group and Avis Europe.

Avis India runs its fleet through conveniently located rental stations in 18 cities and has over 1,600 car rental bookings per day. “In India, Avis has an annual turnover of over $20 million,’’ says Sunil Gupta, CEO, Avis India. Gupta adds that a third of their revenue comes by catering to guests of The Oberoi hotels. “The car becomes the extension of the hotel room and seamlessly offers another Oberoi experience,’’ he says.

On an all-India basis, ITH has operations through 13 offices and an additional 20 travel counters at various hotels from where guests can rent cars on a 24x7 basis. “Our entire operation, including the car rental division, are covered by the ISO 9001 benchmark,’’ says Ghadiali.

Meanwhile Vij’s Carzonrent was initially launched in 2000 as the master licensee for Hertz for India — but Hertz pulled out of the country in 2008. Carzonrent has grown from being a single service company catering to just corporate chauffeur-driven cars with a fleet of 30 cars and a turnover of Rs 20 lakh per month in Delhi/Mumbai/Pune, into a complete mobility solutions company operating out of 34 locations in 13 cities.

Annually, it caters to over six million business and leisure travellers and generates monthly revenues of over Rs 21 crore. Carzonrent has also received private equity investment from SIDBI Ventures/Sequoia Capital and BTS Advisors.

Another player that’s moving in the fast lane is ECO Rent A Car that was set up in 1996. Today, it operates over 800 cars in Delhi and neighbouring Noida and Gurgaon as well as in Mumbai, Pune, Calcutta, Chennai and Bangalore. It’s also zipping around in Tier 2 and 3 cities including Bhubaneswar, Kochi, Mysore, Hyderabad, Bhopal, Indore and Ahmedabad. Says Aditya Loomba, director, ECOS (India) Mobility & Hospitality, “We cater to well-known MNCs, luxury hotels and individuals.’’

Sixt India, which began operations in 2006, has a fleet of 200 cars and is present in Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Pune, Coimbatore and some smaller cities.

The cost of hiring cars isn’t terribly steep. A car on chauffeur-drive costs in the region of Rs 1,500 for in city use of up to 80km while self-driven cars cost about Rs 1,500 per day (24 hours) for local or outstation runs of upto 150km. A self-drive car from Carzonrent taken for three days can be used without any limit on the number of kilometres. And a two-day trip to the Golden Triangle from Delhi, for example, will cost around Rs 3,000 with a cost of Rs 750 per person if it’s for a family of four.

Avis’ chauffeur-driven cars will set you back anywhere between Rs 1,000 and Rs 2,400 (for four hours, depending on the car you ask for) while a seven-day self-drive costs between Rs 10,500 and Rs 17,500 (again, depending on the car you pick). But for a chauffeur-driven Mercedes E-class and S-class, it will be a hefty Rs 6,000 and Rs 8,000 (for four hours) respectively.

SELF-DRIVE VS CHAUFFEUR-DRIVEN CARS

Carzonrent has over 6,400 cars including a fleet of Mercedes-Benzes

At the moment, the car rental market is dominated by the chauffeur-drive model, say the operators who’d like this to change.

According to Kapur, Sixt operations are based only on the chauffeur-driven business for corporate clients, MNCs and hotels. He says that what ails the self-drive option are problems of traffic congestion in cities, lack of public parking as well as a plethora of inter-state taxes.

There’s also a problem about insurance against mishaps and accidents, which means that in the event of any difficulty, the customer ends up paying for the damages.

“So, the mainstay of the business continues to be chauffeur-driven cars,’’ says Gupta.

ITH’s main business segment is the corporate sector and these clients are all for chauffeur-driven cars. “Self-drive in India is not easy for tourists,’’ he admits. However, ITH does offer the self-drive option on a limited basis.

But as the condition of our highways improve, more people are bound to choose self-driven cars, adds Gupta. The self-drive model, the mainstay of the car rentals business worldwide, has in the past languished at less than 1 per cent of the total business in India. “There’s a huge increase in the number of Indian holiday-makers overseas who opt for self-drive. In India too, this segment has grown over the past three years and today accounts for up to 5 per cent of the total business in the country,’’ says Gupta.

GPS-based navigation technologies are now available and the insurance issues are being sorted out. This, say the experts, should encourage more people to drive themselves.

Loomba adds: “The demand for self-drive is growing, especially for SUVs and luxury cars, which today’s urban youngsters aspire to drive.’’

There’s an additional problem that’s already making itself felt. The radio cab business has ensured that the drivers become very expensive to hire. “A radio cab driver earns to the tune of Rs 900 a day. This is indicative of the fact that the cost of hiring a chauffeur-driven car — and drivers — will only go up in the future. Therefore, self-drive will be the best option,’’ says Vij.

DRIVING IN THE FUTURE

The car rental business seems ready to grow exponentially in the coming years.

“With more foreign equity groups, foreign players and the best talent entering the industry, the future is bright,’’ says Vij. The main growth areas, however, say the experts, are likely to be in the chauffeur-driven segment.

Trends also indicate a favourable growth in demand for top-end luxury cars — both for their comfort and for brand value.

Observers say that the industry has a great future in a large market like India. Says Vij: “There is no doubt that over the next five years, companies will have fleets of between 25,000 and 35,000 cars marking their presence in over 40 cities across India and offering all the services required by travellers.’’

Carzonrent too plans to get aggressive and strategise over the next two to three years in order to build a fleet size of 25,000 cars.

Says Vij: “We are also looking at building a fleet strength of 15,000 cars in the radio cab fleet in Mumbai, Delhi, Bangalore and Hyderabad.” Expanding operations to Chennai, Pune, Calcutta, Goa, Kerala, Gujarat and Rajasthan is also on the cards. “The focus will also be on expanding our limousine services segment,” he says.

Ghadiali says: “Industrial/ business growth in the Tier II cities implies that we at ITH would need to expand the network of car-rental offices and counters. Obviously, the fleet size shall also expand.’’ He adds: “To further improve operations, we have started fitting GPS tracing devices on our cars — currently this is on a pilot basis, but we should cover our entire fleet by mid-year.’’

Says Kapur: “For more efficient operations and better safety, cars will have to be equipped with GPS, air bags where feasible, radio (RFD) tags for toll booths and much more.”

Quick facts about the organised Indian car rental industry

There are around 20 players in the organised sector across the country.

At the moment the car rental market is steered by the chauffeur-drive model.

The self-drive model was languishing at less than one per cent of the total business till three years back. But it’s been growing yearly and today accounts for up to five per cent of the total business in India.

Most car hire companies in India offer chauffeurs on call. So, one has the option of hiring a chauffeur only for a few hours. This implies that you can be driven during peak hours and drive yourself during leisure hours.