The ride-hailing apps – Ola and Uber have gained popularity in the last few years. Commuters in the country are opting them frequently due to the increasing traffic and parking hassles.
And more importantly, their popularities are hampering the demand for the passenger vehicle.
According to SBI Capital Securities report, cab aggregators have caused a downfall in demand by one-third in the last two years.
In the last Diwali, which is considered one of the peak periods for automobile sales, witnessed poor sales largely due to the increase in fuel prices, insurance cost and interest rates.
In the last fiscal, Auto companies Hyundai, Mahindra, Honda Cars India, Toyota Kirloskar Motor and Maruti Suzuki India registered a mere single-digit growth.
The sector grew by around 2% to around 3.3-3.4 million units, as per industry estimates. This is despite discounts offered by car makers.
Maruti Suzuki, missing its own revised forecast of 8%, posted sales growth of 4.7%. Hyundai Motor India sales fell 7.6% from last year to 44,350 units last month. Whereas Tata Motors sales went down to 12% in March. For the fiscal year, however, the numbers were up 12% at 2,10,143.
However, during peak hours the experience for commuters turn bit unfavorable as they have to wait for extra 20-30 minutes and fares go up due to unavailability of cars, added CNBC18 quoting the report.
Around 80% of the consumers have been unhappy with their experience and it could be a reason for them to turn back to their private cars during peak hours.
In fact, these are said to be two major reasons that could lead to the re-shift of the preference of travel—commuting via cabs or via private cars.
Besides, frequent strikes by ride-hailing firms and introduction of electric vehicle schemes are also leading to re-shift.