PE/VC fund-backed Carzonrent (I) Pvt Ltd is planning to invest around Rs 150 crore over the next three years to expand the company's fleet. Of the total investment, around Rs 25 crore will be for the Chennai market.
Speaking to reporters after launching inter-city, intra-city and self-drive services here today, Rajiv Vij, MD & CEO of Carzonrent, said the company had 6,500 cars in the offering now and was planning to increase it to 30,000 in the next three years.
Its aim is to capture 20 per cent of the Chennai market over the next three years. According to Vij, the rental service market in Chennai is estimated to be around Rs 600 crore per annum.
Carzonrent already runs around 500 cars in Chennai and is planning to add another 500. The company is planning to have an additional 200 cars for inter-city travel, 200 cars for intra-city and 100 cars for self-drive services, he added.
Speaking about the overall car rental industry in India, Vij said the industry would look similar to the developed markets in the coming years.
The industry today has approximately 400,000 cars and 10 per cent of it was organised.
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He noted, some of the global brands including Hertz, Avis and Budget came to India but couldn't succeed.
“This was mainly due to lack of industry knowledge in India, overhead cost and pricing pattern.”
Currently, the industry is estimated to be around Rs 15,000 crore and is growing at 12-15 per cent.
In the last 12 years, the company registered a compound annual growth rate of 43 per cent, with a market share of 18 per cent. Last year, it clocked Rs 250 crore and six million individuals were serviced. The growth of the company has attracted three investors — Sidbi, Sequoia and West Bridge/BTS Advisors. Carzonrent raised around $20 million from these funds.
On the funding for the proposed investment, Vij said, “we have enough money and won't be raising any equity.”