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Corporate - Diversification


Sona group to diversify into car rental, leasing biz

Neha Kaushik

New Delhi , Jan. 6

THE Sona group, a leading automobile components maker, is all set to foray into the car rentals and leasing domain through a new division called Sona Mobility Services.

The group has tied up with SIXT, one of Europe's largest firms in the car rentals space, for the same.

Mr Sunjay J. Kapur, CEO of Sona Mobility Services, said: "We will initially be investing about $15 million. While we have already acquired a fleet of cars and appointed 50 chauffeurs, this would be scaled up to 500 cars in the first year. We are looking to achieve break-even in a year."

The fleet would consist of cars ranging from Indicas to Toyota Camrys. The company has already appointed a COO - who has joined from SIXT in the Netherlands - for the new division.

The company will formally launch the new operations during the forthcoming Auto Expo in Delhi, which is starting on January 12.

The Sona group would be looking to leverage upon SIXT's global tie-ups and would initially be targeting German companies familiar with SIXT. The $3-billion SIXT has alliances with companies such as Lufthansa, KLM, and Siemens, among others.

Being the master franchisee for SIXT in India, the Sona group would also be developing its own sub-franchisee network in all other regions excepting the North.

The car rentals space in India is currently worth Rs 9,000 crore, with 90 per cent in the unorganised segment.

"People are increasingly demanding premium, standardised service, which is missing right now. We have in-house etiquette training programmes for our chauffeurs. We are also investing in IT in a big way, including implementing GPS and allowing real-time booking of vehicles," Mr Kapur said.

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