Self-driven rental cars segment in India is still to evolve into the size and level seen in many developed countries. A Bangalore based startup, Zoomcar has been in operation for the past four years and has already received funding to the tune of $50million. The latest tranche it has received is in the form of a vehicle financing deal with a subsidiary of Ford Motors.
As per a VCCircle report, Ford has its plant near Chennai and it has floated an NBFC, Ford Credit India. This company finances the cars and SUVs sold through Ford India’s dealers. The current arrangement with Zoomcar is for purchase of around 400 cars from Ford, of which 58 Ford Ecosport models have already been delivered in August and September this year. The total deal is worth Rs. 35 crore ($5.45m) of which the 58 cars delivered cost Rs. 4.5 crore.
Zoomcar has had similar arrangements in the past also, with automobile companies, like BMW and also NBFCs. For Ford also, though the above deal is for sale of its vehicles, the company invested in Zoomcar last year through Ford Smart Mobility LLC and at that time, Rs. 161 crore got invested as part of the Series B funding in the car rental startup.
Promoted by two US nationals in 2013, Zoomcar has already scaled up its operations and is available in 24 cities and runs a 3000-strong fleet. The promoters have an ambitious target to reach a figure of 25, 000 cars by 2018-19, which is just a year from now. According to figures available, the company is hoping to reach the landmark 1 million trips soon.
While in its current avatar Zoomcar is operating on the asset model, where the company is investing in buying the cars and renting out, they want to shift to their Zoomcar Associate Program (ZAP), in which people can purchase cars and attach them with Zoomcar and share the profits at the end of each month.
Going ahead Zoomcar has the objective of reaching a level, where 85-90% of the cars within its fleet will be from the ZAP model.
Zoomcar already has a US registered firm, Zoomcar Inc and there are plans to expand the operations to 2 dozen countries in the coming months and years. It might move into other Asian countries first and then tap the business potential across Africa.