As the global economy begins to get back on its feet, albeit gradually, even amid worldwide scares of the new Omicron variant of COVID-19 emerging, we are nearing the end of the financial year and the Union Budget 2022. Over the past two years, there have been large-scale transformations in the way individuals live their lives and the way businesses across verticals operate – changes that are likely to be long-lasting. With the lockdown restrictions largely eased, although some states in the country have reinforced weekend and night curfews, businesses are functioning as per usual in the new normal.
Amidst the current scenario, transportation/commute is one aspect that has undergone significant evolution as people’s preferences have changed dramatically with the onset of the pandemic. With people once again stepping out of their homes, there is a surge in need for an efficient, feasible, and safe commute. Purchasing a new car isn’t a viable option for everyone, particularly with many still recovering from the financial blow that job losses and salary cuts had dealt during the first and second waves, and public transportation is out of the question owing to safety concerns. The natural choice has been shared mobility – a space that has witnessed steady growth in demand, especially for subscription models.
Globally, the rental car market size is set to touch $186.59 billion by 2030, fuelled by rapid technological advancements and the growing popularity of online car rental bookings made, both for leisure and everyday commute. Considering the quick progress it has made, the rental car segment is undeniably a lucrative one. However, for the segment to grow further in the country, certain reforms, initiatives, and support are required from the government.
This Union Budget, here’s what the automobile and rental car sector expects:
EV element: Moving towards a sustainable future
The auto industry has been one of the industries to be at the forefront of the disruption caused by the pandemic. Despite an initial slump in the business, the industry has shown positive signs for recovery and growth. With the right policies and support, the sector is poised for the effective revival of business and tremendous growth.
One of the key areas of focus that the industry expects from the government this year is Electric Mobility. Over the past couple of years, Electric Vehicles (EVs) have received significant support from the government in terms of tax benefits and incentives to spur EV adoption. However, addressing existing issues such as the lack of robust charging infrastructure is critical to building an EV-conducive environment.
While the EV market is still at a nascent stage, EV adoption has increased steadily in recent times and investors, both within the country and outside, are keen on backing the segment. But for this, bolstered EV infrastructure is essential as it will facilitate seamless manufacturing and usage of EVs and EV-related aspects such as charging kiosks. Consumers, especially the younger generations, i.e., millennials and GenZ, actively working towards being more environmentally-friendly means that EV adoption is set to skyrocket in the coming years. Even the rental car segment has begun to include EVs in their fleets of cars as the demand continues to surge.
Yet another crucial element for the government to address during this year’s Union Budget would be technology, the engine that powers all the development and progress in the industry. Without technological advancements, the auto industry would have taken a few years more to reach the point it is at now.
We are in the midst of a major technological revolution, and it is expected of the government to focus more on tech-led developments for the industry to capitalize on, recover quickly, and thrive. Technology offers a goldmine of potential, and we have barely scratched the surface. To truly harness the power of technology, strong government support for innovations is necessary. The industry would also be expecting tax incentives, particularly for startups, to help boost business growth and put the Indian auto industry at the top on the global stage.
The last two years have been somewhat of a rollercoaster ride for the auto industry, and as things stabilize in the new normal, continued support from the government will work wonders for its quick, sustained progress.
(Greg Moran is CEO & Co-Founder, Zoomcar)