Japan's Sumimoto Group Acquires Car Lease Division of Carzonrent India
Drive To Ride High:Japan's Sumimoto Group Acquires Car Lease Division of Carzonrent India
The Sumimoto Group from Japan has just acquired the car lease division of the company behind Easy Cabs, Carzonrent India for Rs. 200 crore. Sumimoto Group is Japan's largest car lease company and it has over 6 lakh cars at present. This Japanese firm has set up the SMAS Auto Leasing India company which has gained rights to acquire the car lease division of Carzonrent. The new company will have a fleet of 2,000 cars and around 135 marquee company clients.
This is a good step forward for the Japanese company which now seeks control over a profitable enterprise. Carzonrent MD Rajiv Vij has been quoted by the media as saying that with the market share of 18% in the Indian organised car rental sector, Carzonrent will now aim for investment of INR 2,000 crore in the span of the next 4 years. The aim of this company will be to expand its network in India from its current fleet of 7500 to 30,000 and expand the network from 39 to 100 cities. The company aims to expand in both segments namely car with driver and self drive services. It will also venture into markets which are in international shores.
"Sumitomo has the muscle to grow the lease business here. We have identified chauffer-drive and self-drive as core businesses that will drive growth for us in the next decade. Post our agreement with Sumitomo, our strategic focus will be on expanding our cabs business under "Easy Cabs" brand and self-drive business under the "MYLES" brand," Vij was quoted as having said.
Mitsui Auto Service Co Ltd has now acquired part of the car leasing business of Carzonrent India. The Indian company will now transfer car leasing rights to the Indian arm. Carzonrent was founded in the year 2000 by Rajiv Vij. It currently has a fleet of 7,500 cars and it is known for its chauffer-driven car services under Easy Cabs brand and self drive car rentals coming under the MYLES brand.
From Sumimoto's point of view as well, this is a good acquisition. “India’s auto leasing market consists of about 40,000 vehicles at the moment, but the market is expected to more than double to 100,000 vehicles within a few years, driven in part by higher demand from corporate clients. SMAS is seeking to establish an early foothold,” the statement from Sumimoto to the media read.
Investment gained from Sumimoto will be put to good use. Earlier, Carzonrent had placed a large order for luxury cars such as Mercedes-Benz for the 120 C Class sedans. With cash on the go, this company can accomplish much when it comes to acquiring a lion's share of the roadways and the profit.
SMAS India is now a JV between Sumimoto's Mitsui Auto Service which owns 60% and Sumimoto Corporation at 40%, according to Deal Curry. With a lot of plans being cooked up for this new company, the green signal for further expansion is keeping this car lease business on the move.
