Expect automotive leasing in India to account for up to 8 pc of total sales in 5-8 yrs: ORIX

 Mobility solutions and financial services provider ORIX Corporation India Ltd expects automobile leasing market in India to account for 7-8 per cent of the overall vehicle sales in the next 5-7 years, up from about 2 per cent currently with more younger people joining the workforce, its Managing Director and CEO Vivek Wadhera.

With good traction in its business, the company expects 30-35 per cent higher profit this fiscal year compared to the last year, Wadhera told PTI in an interaction.

"If you compare the Indian market to the western market, the overall leasing market in India is 1-2 per cent of the total number of automobiles sold," he said when asked how the automobile leasing market has been developing in the country.

In 2024, passenger vehicle sales in India stood at 43 lakh units as per industry estimates.

In the western market such as the US, or even Japan or China, the same percentage is 30-40 per cent, he added.

There many customers don't buy vehicles but "Indians still like to buy vehicles, and hence only 1-2 per cent of the total automobile sales that happens through leasing or subscription, he said, adding that ORIX has tied up with OEMs such as Maruti Suzuki and Kia for subscriptions but it is still not a very large business.

Asked how the automotive leasing market is expected to develop, Wadhera said, "We will be lucky if this 2 per cent becomes 7 or 8 per cent in the next 5-7 years. That's the way we are looking at it."

On the growth drivers, he said a lot of younger generation people, who prefer rentals over ownership and put more premium on experience and travel, are entering the workforce.

It is a trend even witnessed in the real estate segment, he noted, adding that it is a generational change in mindset.

On the company's overall growth, he said, "On the profit side, this year will be 30-35 per cent higher than last year all the businesses put together. We made a profit of USD 12 million last year in India. This year, we should be making USD 16-18 million profit."

In the eight-month period of this fiscal year, Wadhera said, "We have already crossed what we did in the 12 months period last year... Business is doing well and this is despite the fact that the RBI has not cut rates so far, while the US Fed has."

ORIX India is present in self-drive rentals, leasing, and financial services.