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Aug, 2021     

How technology is shaping personal mobility?

Mobility recovered 69% with an overall of 78 million rides.


As an after-effect of the pandemic, the consumer scenario has been changing with new demands that need to be solved. Mobility, one among the many, is also seeing new consumer trends as consumers are preferring to buy passenger vehicles instead of sharing their cars or taking cabs. As shared mobility declined during Covid, personal mobility saw a rise with an increase in consumer demand.

Here, we are capturing how personal mobility is soaring, especially post Covid.

1. Sales of personal vehicles are on an accelerated growth trajectory in India over last 12 months

Domestic Car Sales – India, Q4’2020 – Q4’2021 | Indexed to Q4’2020

The personal vehicle market has seen an accelerated growth trajectory post Covid in the last 12 months. The sales of passenger vehicles have recovered to ~140% in Q1’CY21 compared to Q1’CY20. The growth in passenger vehicles is driven by the limited availability of public transport post Covid and increased safety & hygiene concerns leading to a shift from shared mobility solutions.

2. New-age players solving problems with innovation to cater to the increasing demand of used cars

Snapshot of Digital Companies disrupting the Car Ownership Journey, Descriptive

Owning an asset like a car can involve a lot of hassles. But, today tech online platforms are accelerating the focus on digitizing the entire journey of car ownership right from car search, car purchase, car finance, and car insurance to sales of the car which will result in providing a seamless experience to the customers.

3. Declining car replacement cycle & other factors also increasing demand for used cars

Note(s): 1) India data for FY 20, USA and UK data for CY 19; Germany data are for CY 18; 2) Motorization rate is defined as the number of passenger cars per 1000 inhabitants; 3) Car replacement cycles are measured by the number of years the vehicle is in ownership; 4. Includes US, UK, Germany

The growth in the passenger vehicles is linked to the declining replacement cycle of cars which has dropped from ~55 months in CY’06 to ~40 months in CY19. The increase in demand for cars is further driven by the rising middle class, frequent relocation of the working population in metros, and rising demand in Tier 2+ cities. This increasing demand for passenger vehicles is leading to the growth of used cars which can be witnessed by the increase in the ratio of used cars to new car sales from 1.1 in 2016 to 1.6 in 2019.

Currently, the used-to-new car sales ratio is ~38% lower than the global average which means there is a significant headroom for growth.

4. And these platforms are enjoying a very high NPS led by innovative approaches

Buyer NPS, % NPS, N=240

Our study shows that the new age platforms which are focusing on digitizing a customer’s entire journey, sees a higher NPS when compared to offline channels. Further, as the digital adoption grows especially in smaller towns and cities, this trend will continue to grow further.

5. Even the Car service & repairs market is being appreciated by many

India Car Service & Repairs Market Overview

This segment is currently quite fragmented but tech platforms are building out quality and affordable solutions in this segment by offering services such as doorstep pick-up and drop low-cost service and post-service warranty to customers. Tech platforms are also providing service workshops with genuine & affordable spare parts, tech-led demand generation and efficient logistics support resulting in higher margin and increase in footfall.

With innovative ideas disrupting the sector, India’s used car market is bound to see significant growth in the coming years. Driven by the initiatives of tech platforms, the car services & repairs market is expected to grow at a CAGR of 12% to reach USD 25 Bn by CY30 from USD 8 Bn in CY20. The share of the online segment is also expected to increase from 1% in CY20 to 15% by CY30.