The upwardly mobile younger generation of Indian customers are keen to get to their dream car earlier, without being stuck with it forever. The duration of owning the same vehicle has come down significantly and customers are now seeking faster access to vehicles, low-cost EMIs, and quicker upgrades.
Every year in India, more than 3.25 million new cars and 20 million new two-wheelers are sold out of which more than 60% are financed.
One of the significant reasons for the recent slowdown of the automotive industry is believed to be caused by challenges in financing vehicle purchases.
However, India is expected to see a similar turnaround where customers value access over ownership and alternative financing models become a more viable and preferred choice, especially among the young buyers.
“Coming from a tier-3 kind of town, the way we pursue commute is very different from the metro places and that has been a lifelong thing as we have evolved. We started off with bikes and CredR was one of my ventures where we majorly focused on the buying and selling of used bikes and during that experience of 2014-17 where we transacted more than 100,000 used bikes in the market, there were particularly interesting insights into the changing consumer behaviour. One being that today, the consumer loves to change very fast. If you talk about the market, on average, individuals are changing bikes within 3 years now which was probably about 5.5 to 6 years a generation back,” says Sumit Chhazed, Founder and CEO of OTO Capital.
OTO Capital has introduced the concept of two-wheeler leasing in India and claims to India's first startup to do so. The company was launched in April 2018 and is based in Bengaluru. It is also operational in Mumbai and Pune.
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