India’s mobility sector is moving on

India’s mobility sector is moving on
Courtesy: ANI

After a slow start, India’s mobility sector is slowly gaining speed.

India’s mobility sector was already slowing towards the end of 2018, faced with a liquidity crunch, higher acquisition costs, and waning consumer demand but the coronavirus really threw a spanner in the proverbial works.

According to McKinsey, in March 2020 domestic automotive sales were 45 percent lower than they were in March 2019 after the Indian government instituted a lockdown. The sharpest decrease occurred with CVs, where year-over-year (YoY) sales fell 88 percent. April and May 2020 brought even worse news, with YoY sales for those months more than 90 percent lower across all vehicle segments.

Things weren’t any better for the shared-mobility sector either. In the ride-hailing segment, which experienced high double-digit growth in 2018, the number of rides per day only grew minimally the first six months of 2019. The first difficulties arose from changing regulations at the state level and a shortage of driver partners. More recently, COVID-19 has caused usage of ride sharing and other services to plummet.

Picking up speed

Though Covid-19 did put the brakes on pretty hard for India’s mobility sector, business seems to be finally moving along. According to a report titled ‘The unexpected trip: The future of mobility in India beyond COVID-19’by McKinsey, small-format mobility such as 2 wheelers and 3 wheelers have the potential to bounce back quicker.

Sales of entry-level scooters and motorcycles are already seeing a strong bounce back, with leading 2-wheeler manufacturers reporting a fourfold increase in sales between May and June 2020.
The lockdown has prompted many of migrants to move back to their hometowns in the countryside, which is driving demand for affordable mobility options.

For the 3 wheeler market, prospects are also strong, since riders may perceive personal taxis as a safer transportation mode than shared-mobility options, where risk of infection is higher. Alternative models such as leasing and subscription-based solutions are also gaining momentum in India.

Government backing

The “Digitalization Powering Innovative Mobility Solutions in India” some of the most innovative transformations within the mobility sector can be attributed to the Government of India (GOI)’s thrust to more sustainable solutions in the country. The Modi government’s 3-fold strategy of shared infrastructure, system integration, and scaled manufacturing has encouraged a whole set of shared, connected, and electric solutions in India.

EVolution

Executive Director of Bajaj Auto Rakesh Sharma along with MD, Bajaj Auto Rajiv Bajaj during the launch of first electric scooter in 2019. The market for eCars, eLCVs and eAutos is expected to experience major growth in the next 7 years in India.
Executive Director of Bajaj Auto Rakesh Sharma along with MD, Bajaj Auto Rajiv Bajaj during the launch of first electric scooter in 2019. The market for eCars, eLCVs and eAutos is expected to experience major growth in the next 7 years in India.Courtesy: ANI

Motor vehicles are estimated to contribute 20 to 40% of the air pollution in major cities, such as Ahmedabad and Delhi, contributing significantly to India’s air pollution crisis.With the GOI looking at 30 per cent electrification by 2030, in line with its agenda for a low carbon, greener economy, there would be more traction for electric vehicles (EVs). The market for eCars, eLCVs and eAutos is expected to experience major growth in the next 7 years, with the last-mile connectivity modes (such as eAuto) set to be fully electrified by 2030, due to a combination of lower ownership costs and regulatory intervention. Experts estimate 2 wheeler e-vehicles sales could reach between 8 and 9 million by 2030, when they would account for about 35 to 40 percent of all 2 wheeler vehicles sold. For 3 wheeler e-vehicles, about 500,000 to 600,000 could be sold in 2030, representing about 60 to 65 percent of purchases.

Ultimately, though it will of course fall upon the government and private players with the mobility sector to come up with solutions and policies that will aid the growth of EVs in India.

No stories found.
No stories found.
No stories found.
No stories found.
No stories found.
No stories found.
India Global Business
www.indiaglobalbusiness.com