Taxi-hailing apps could raise Competition among Auto Industry

“The rising competition from taxi-hailing apps such as Uber and Ola could push some people into giving up on ownership of cars and pose a threat to auto industry volumes”, warns Anand Mahindra, the chairman & MD of Mahindra & Mahindra rhetorically asked the audience at the launch of its compact sports utility vehicle TUV 300.hailing_cab_

“Today, one lives in a world where the Olas and Ubers of the world are stating that a person doesn’t need to own a car, for them transportation is commodity,” he added. “It changes the way one sells,” said Mahindra, whose products compete with those of Tata Motors, Hyundai and Japan’s Honda.

Car makers are fidgety about taxi-hailing apps which have taken the streets by storm. The convenience of using them, their easy availability and cheap price could push individuals who have aspired for ownership of a car to drop their plans and opt for convenience instead. Gaurav Vangaal, senior analyst with IHS Automotive, said it is a good sign that the head of a big automotive company recognises this disruptive change. “It only enables companies to react proactively so that it does not impact their operations. Clearly, going by the theory of Mr Mahindra, the new models will have to get more appealing than the past. And instead of treating Uber and Ola as a threat, they can leverage the opportunity to even supplying to these aggregators.”

Car Makers to Use Cutting Edge Technology

Car makers around the world are responding to the threat by upgrading their models with technology to attract the young crowd. Ford recently started a car sharing initiative in the US that helps people let out their cars to a select set of customers to reduce the cost of maintaining the vehicle.

Car makers are also increasingly using cutting edge technology to offer multimedia systems that connect mobile phones to cars, wherein one can talk on the move, use voice recognition system to make calls, change radio stations — essentially take command without losing control over the steering wheel. Some of these features found in luxury cars are now making their way into the mass market segment too.

While transportation has become commodity for some, Mahindra said, one is entering the age of experience. He said people are going to buy the things that they love and that Mahindra & Mahindra will have to make things that people love. Mahindra is in a sweet spot, as he said people desire to own an SUV over other options.

Author: SubEditor

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