Recently, auto make Mahindra and Mahindra announced partnership with ride hailing company Ola to offer discounts on Mahindra cars, vehicle financing, and maintenance packages to Ola drivers. “Mahindra-Ola package” will start at zero down payment and also include accident insurance and scholarships for the children of drivers.
Through this deal, Mahindra is targeting to supply 40,000 cars to Ola in next two years and generate a business of Rs 2,600 crore for the Mahindra Group. Ola has presence in more than 100 cities with half-a-million drivers registered on its portal. Deal with Mahindra will definitely help Ola to stand against rival Uber more effectively.
While a section of auto maker industry views ride-sharing firms as a threat by making image of vehicles just as a medium to go from point A to B rather than something that consumer want to own, Mahindra & Mahindra and Tata Motors are moving strategically to grab the volumes. Tata Motors has already joined hands with Uber.
“India’s mobility needs are unique and unlike any other market globally. Shared mobility will leapfrog car ownership as a paradigm in terms of percentage car ownership. But as an absolute number, there will definitely be an increase in ownership. But in terms of utilization, share mobility and ride sharing will drive the future needs of the country in the time to come,” explained Bhavish Aggarwal, CEO of Olacabs. Ola is planning to have at least 5 million cars under its umbrella over the next five years.
“It’s a collaboration of the two ecosystems—what we have created is a package called One-Mahindra, which brings the strength of our federation. Even investors have realized that they are better off banking on companies that are not only purely virtual but also have a strong offline presence,” stated Anand G. Mahindra, chairman of the Mahindra Group.
This deal is a win-win deal for both of the parties. While Mahindra gets a captive audience for their cars, insurance, finance and other businesses, Ola gets a larger alliance partner because of which they may be able to give better terms to the drivers.