Maruti Suzuki plans to take car subscription business to more cities

India's largest carmaker Maruti plans to expand its subscription service to more cities across the country.

The company is getting more than 7,000 enquiries every month. But the conversion rate is low with 100-110 enquiries getting converted to actual order and Maruti wants to improve that.

"Despite this being a very new concept, we are getting good response to the subscription model and we are focusing to convert the enquiries into orders," said Shashank Srivastava, senior executive director, sales at Maruti Suzuki.

Launched in July of 2020, the Maruti Suzuki subscription-based model is available in 20 cities across the country with Kolkata being the latest addition. 

The programme allows a customer to opt from a range of Maruti Suzuki vehicles, for multiple tenure options, for an all-inclusive fixed monthly rental. 

This monthly rental includes the vehicle usage charges, registration charges, maintenance, insurance, and other common services related to vehicle usage, and a person can choose between white or black registration plates.

Srivastava said that response to the subscription model has been primarily from three section of customers--- the young generation who intends to stay asset light, a section of customers who mostly have transferable job and a section of customers who look to frequent change in their cars.

"So in our customer survey, we found these section who either have to shift cities frequently and hence are not amenable to buy a car or a section of millenial who dont have much credit history to get financing," he said.

Hence Maruti is targeting those cities which have a large section of people who are into transferable job. 

"We launched Hyderabad even before Mumbai. So the selection of cities is primarily based on the demography where the section of customers who are present resides," he said.

While the subscription model has increased in popularity among global carmakers, it is still a niche business in India.

General Motors was among the first to launch a Netflix-style alternative to owning a car; exit comes as more car makers dabble with such subscriptions