Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Monday 10 September 2018

Cars on Subscription ? Convenience Redefined





Principle business model for the Auto Industry , remains :


Selling  cars  offline ( and displaying ‘ online ‘ )



But this is slowly changing


Speaking at the recent Global Mobility Summit, Shri Nitin Gadkariji hinted that Tata Motors and Ashok Leyland could form an “ Operator Company “ on the pattern of London Transport Model




“ The government is ready to give " on a platter " all necessary regulatory clearances to investors ready to run public transport buses on electricity or alternative fuel…..


I have urged manufacturers that apart from manufacturing buses, you open an Operator Company. You will get business .” 
 

 [ https://timesofindia.indiatimes.com/business/india-business/gadkari-offers-approvals-on-platter-for-electricity-run-public-transport/articleshow/65723083.cms  ]




Dear Shri Gadkariji ,


Whereas , citizens ( especially , of the metros ) would be very happy if TATA and Ashok Leyland grab your offer and start Operator Companies , you can only “ exhort “ them – but no more



But there is one company who you can give ( without it asking ),  all those “ regulatory clearances “ , and ( more or less ) “ order “ it to turn itself into a Operator Company  !



I mean , EESL which ,


·         placed an order for 10,000 electric cars ( Jan 2018 ) on TATA and M&M


·         has so far received ( 153 + 400 ) cars in 8 months



·         expects to receive the balance 9,000 + cars in the next 7 months


·         getting ready to release the second order ( also for 10,000 cars ) by Dec 2018



·         plans to replace the entire Petrol / Diesel car fleet of government ( 500,000 ) cars with electric cars in the next 5 years





Currently , EESL business model consists of ,


·         Outright purchase of these cars

·         Leasing out the same to different government departments



This already makes EESL , somewhat of an Operator Company  !



After 5 years , when it leases out 500,000 electric cars to Central and State governments , would that not make EESL the biggest “ Operator Company “ in the world ?



During the past few months, I have been urging EESL to change its business model as follows :



·         Instead of “ buying “ , get these cars on “ Wet Lease “ from manufacturers


·         The “ sub-lease “ to the government departments




Not only will this save thousands of crore of initial capital investment but also save hundreds of crore of recurring operating / maintenance expenses



But , even this can be improved upon by tweaking its business model as follows :


·         EESL will not “ buy “ electric cars but take it from the manufacturers on “ subscription



Here are some other options :



·         Govt departments buy “ Car Subscriptions “ directly from TATA / M&M etc , bypassing EESL ( - no value addition by going through EESL )


·         EESL enter into a “ Rate Contract “ with TATA / M&M etc , and government departments issue “ release orders “ with copies to EESL




Several foreign car manufacturers ( notably , BMW – Mercedez Benz – Porsche – GM etc ) , have started offering to the buyers , “ Subscription Deals “



A “ Car Subscription Company : CANVAS “ offers as follows :

$ 375-1125 per month ( for 500 miles per month / Additional $ 35 per month for another 350 miles )






Other References :











11  Sept  2018


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