NEW DELHI, Jan 5: ORIX Corporation India Ltd, a provider of mobility solutions and financial services, anticipates that the automobile leasing market in India will grow to represent 7-8% of total vehicle sales within the next 5-7 years, a significant increase from the current 2%. This expectation is driven by a rising number of younger individuals entering the workforce, as noted by Managing Director and CEO Vivek Wadhera.
With positive momentum in their operations, the company projects a profit increase of 30-35% this fiscal year compared to the last, as Wadhera shared in an interview with PTI.
“Compared to the western markets, the leasing sector in India currently accounts for only 1-2% of total automobile sales,” he explained while discussing the progress of the automobile leasing industry in the country.
Passenger vehicle sales in India reached 43 lakh units in 2024, according to industry estimates.
In contrast, leasing represents 30-40% of automobile sales in western markets like the US, Japan, and China, he added.
While many consumers in these regions opt to lease instead of purchasing vehicles, “Indians still prefer to buy cars, which is why only 1-2% of vehicle sales occur through leasing or subscriptions,” he mentioned, highlighting ORIX’s collaborations with manufacturers like Maruti Suzuki and Kia for subscription services, although it remains a relatively small segment of their business.
When asked about the future of the automotive leasing market, Wadhera stated, “It would be notable if we could increase from 2% to 7 or 8% in the next 5-7 years. That’s our outlook.”
He pointed to the changing consumer behavior, particularly among younger generations who favor rental options over ownership and value experiences and travel, as a key driver of this trend. This shift is also evident in the real estate sector, reflecting a generational attitude change.
Regarding the company’s overall performance, he noted, “This year, we expect profits to be 30-35% higher than last year across all segments. Last year, we recorded a profit of USD 12 million in India, and this year we anticipate making between USD 16-18 million.”
In the first eight months of this fiscal year, Wadhera highlighted that “we have already surpassed our total from the previous year’s twelve-month period… Business is thriving despite the RBI’s decision to maintain interest rates while the US Fed has cut them.”
ORIX India operates in self-drive rentals, leasing, and financial services. (PTI)
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