Thursday, August 28, 2014

Why Car manufacturers should support selfdrive agencies

Reasons why Automobile companies should support self drive agencies:

1.       Let potential customers test the cars at their convenience: A few kms short test drive around the showroom is not really adequate to understand the car fully and make a well informed purchase decision. If a car maker gives a units to self drive agency, potential customers can comfortably book these cars for a few days, explore them to their heart’s content and if the car is good, buy it from the showroom with lots of confidence in the brand.

2.       Lots of free publicity- self-drive customers often take lots of pics during their trip with the car and promote them online, talk to their office colleagues about the trip they had and the car used etc. This gets free eyeballs and publicity to the car brand. When a customer visits showroom, it is usually the prospect and his/her spouse. When on self drive, lots of friends/relatives will also be exposed to the car as the renter visits them or invites them to join the trip. 

3.       Certifies durability- Taxi companies or self drive companies usually do not induct cars that are high on maintenance, give poor fuel economy or in general can’t ensure lower overall cost of ownership. If a taxi company or self drive agency has decided to trust a model and induct it into its fleet, it sort of certifies that car is economical to operate overall. To a potential buyer of the model, it is a confidence boosting measure.

4.       More feedbacks per car: When a car is sold to an individual customer, only one customer gives feedback per car. When same car is rented out from a self drive agency, dozens of customers will be trying out the car each month and hence there’s a possibility that many of them will give their feedbacks/opinions (may not be directly to the car company, but on their social media channels), thus by monitoring the usage or by tieing up with self drive agency, car manufacturer can get more feedbacks per car.

5.       Abilities to get usage statistics and insights: Asking a private customer how exactly he/she is using the car may not get proper response, as it may violate the individual’s privacy or end customer may not be willing to disclose all details. However, self-drive agencies track their cars with GPS, maintain statistics on kms used, fuel and other vital information. Car manufacturers can tie up with self-drive agencies to gather car usage statistics, which can be used for future improvements of the car model. Some of the data that can be collected and used are:
a.       How many kms people are driving the car per day
b.      Avg fuel economy
c.       What are the destinations the car is often driven to?
d.      Is this car being used more for city usage or outstation trips?
e.      Compared to another similar car from competitor, how is the demand for this car? Is this car being booked weeks in advance or only when the other model is not available?

6.       Try push the cars that have flopped in the market: When a particular model is not selling well in the market, car manufacturers can try giving them at discounted rate to self-drive agencies.  Let us take example of Tata Aria- since its showroom sales is not good, if Tata can give few Aria’s to an agency like Zoom or Carzonrent and probably encourage them to upgrade their customers (say those who’ve booked an Innova) to Aria, customers seldom complain and this will get some good road presence for Aria brand. Similarly if Nanos are not selling in good numbers, if positioned well, self drive agencies can rent it out at an hourly rate so cheap, it might make more sense to rent a nano for few hours than hiring an auto. This is a win win situation for all the 3 parties- Tata can push more Nanos to the road, rental agencies earn income which could have otherwise gone to auto drivers, customers get the comfort of an AC car, for the price of renting an auto…

7.       Let Non owners participate in adventure events: There’re lots of automobile events- such as Mahindra Great Escape, Tata Motors Full Throttle, Himalayan Odyssey etc, to participate in which one should own a car of specific brand. There’re many enthusiasts who wish to participate in these events, but they don’t own/can’t afford to buy an SUV of a specific brand. If some cars can be made available through self-drive agencies for use in such events (risks and other terms can be worked out), more and more fans will get an opportunity to participate in these events. (but car companies need to check if this upset regular car owners)

8.       Keep fan base happy: Some of us will never be able to afford a 30-40 lakh car and even if we had the money we won't spend it on cars. Having luxury cars on self drive will enable more and more people experience the car and stay loyal to the brand.

Above are hypothetical cases. Car manufacturers and self drive company executives and discuss to figure out exact benefits etc. While a few car companies don’t want their car to get a taxi appeal, as they fear it might turn private customers away. But self-drive companies are few and number of self-drive cars are very less, hence having few cars in self-drive fleet won’t get a car Taxi badge. So I don’t think car companies should worry about this aspect.