Radio Taxis boom

The fast emerging radio taxi market should spell relief for Indian car makers looking to survive a slowdown in demand. Bulk orders placed by radio taxi companies for passenger vehicle models such as Mahindra Renault’s Logan, Tata Motors’ Indigo Marina and Maruti Suzuki’s Versa, are buoying sales of these models. With radio taxis in growth mode across India, their fleet expansion plans are significant too. Leading the pack is Easy Cabs with a new fleet order worth Rs 60 crore. Confirms CEO Rajiv Vij: “We are placing orders for 700 Logans, 200 cars each with Tata Motors & Maruti Suzuki. The vehicles will be dispatched between December-February.” Earlier this year, Easy Cabs had purchased 750 Logans. Delhi-based Quick Cabs and Meru Cabs are also expanding their fleet size by 500 vehicles each. “We have placed an order of 500 cabs with Tata Motors, which will be delivered by December,” says Meru Cabs CEO Mark Pereira. Says Tata Motors VP-passenger cars unit S Krishnan: “Demand for radio cabs is expanding in the metropolitan cities, and hence it will serve as a source of revenue for the (automobile) industry.” There are an estimated 6,000 radio taxis operating across India currently, and observers say this figure is expected to double by March 2010. After the metro cities, radio taxi operators are now eyeing smaller cities to expand their business, which would further fuel demand. Bulk orders in such difficult times are a welcome development, agree industry experts. Society of Indian Automobile Manufacturers (SIAM) senior director Sugato Sen says: “Though radio cabs constitute a very small part of the entire automobile sector, their orders during this period are a positive sign.” Quick Cabs, which operates in the Delhi-NCR region, entered this business three months ago with 200 taxis. It now plans to bring an additional 500 taxis into its fleet. Quick Cabs CEO Himanshu Malik says: “We will add 500 Tata Indigo Marina and Indica cars by March 2009. An order worth Rs 25 crore has been placed with Tata Motors, and 120 cabs will be delivered every month starting December.” Auto industry veteran and former Maruti Suzuki MD Jagdish Khattar, who recently launched Carnation Auto, an upcoming chain of multi-brand service and sales centres for passenger vehicles, is of the opinion that it’s too early to suggest that the radio taxi boom will aid auto makers in a big way. “The Indian radio taxi market has till date not completely developed,” he said.