Ola, Uber's popularity caused steep fall in passenger vehicle demand, SBI report reveals

Auto majors Maruti Suzuki India, Hyundai, and Mahindra & Mahindra reported single-digit sales growth in the financial year ended March 31, as slowdown impacted passenger vehicles demand for almost nine months of the year.

Honda Cars India and Toyota Kirloskar Motor (TKM) also reported single-digit growth during the last fiscal.

The country's largest carmaker Maruti Suzuki India despite selling a total of 18,62,449 units in 2018-19, its highest ever sales in a year, posted a growth of only 4.7 percent from 17,79,574 units in 2017-18. The company missed its own revised forecast of 8 percent for the fiscal.

Commuters, especially in big cities, often opt for cab aggregators due to the increasing traffic and parking hassles, among other reasons.

However, the SBI report said that the consumer experience with these cab aggregators during peak hours has taken a hit as the consumers have to wait for at least 15-30 minutes and the fares rise by around three times due to unavailability of cars.

The rise in fares and the long waiting time could be the two major reasons for the re-shift of the preference of travel—commuting via cabs or commuting via private cars—can take place.

Other reasons that could impact the re-shift are the Ola and Uber strikes and the changes the central government is planning to implement in the auto industry, notably the introduction of electric vehicle schemes. The EVs, pushed by the government, if come in full swing, can increase the cost of the cab-hailing companies which can then increase the fare and drive away their consumers.

The report also reveals that approximately 80 percent of the consumers have been disappointed with their experience and it could be one of the major reasons for them to turn back to their private cars during peak hours. Peak hours is generally the commuting time to work, between 8-10 am and 5-6 pm.