Millennials Using Ride-Hailing Services Will Increase Demand for Cars: JLR
Finance Minister Nirmala Sitharaman had recently blamed the auto industry slowdown on Millenials using ride-hailing services like Ola and Uber instead of buying new cars.
Photo for representation only. (Image: Reuters)
Millennials depending more on ride-hailing service providers for commuting would mean more demand for cars rather than affecting sales in megacities, including those in India, according to JLR chief executive Ralf Speth. Amid automobile sales slowdown in India, Finance Minister Nirmala Sitharaman had recently said one of the reasons for the downturn in the industry was Millenials using more of ride-hailing services Ola and Uber instead of buying new cars. "We should not always see it in black and white. I look at a little differently. If you look at experiences of megacities, like London, this kind of trend will create demand for more cars," Speth said here. He was responding to a query on how the so-called trend of millennials not buying new vehicles and instead of going for ride-hailing services is affecting the auto industry.
For younger people, Speth said, "Living in these megacities, parking is expensive, transport services are not adequate. Then you recognise public transport is not capable to deliver the mobility people need. If I see the trends in India, it is quite similar in megacities." He further said women hesitate to travel in the underground in tubes in London, because of the crowd, youngsters don't want to take the tube. "It is better for them to call an Uber or any other such service. It is quite cheap especially with the pool options emerging. You don't have to travel individually, you can even travel with other people. There will be even more vehicles on the street. This kind of mobility is easier, more comfortable, safer and there will be more cars on the road," Speth asserted.
When asked about the future of internal combustion (IC) engines in the wake of electric vehicles gaining traction, he said, "I am absolutely sure that we need IC engine vehicles in the future as well for a very long period." He said the industry should not only think about passenger vehicles but also about commercial vehicles and the role IC vehicles will play going forward. "The need to deliver high quantity materials over long distances...the battery-powered electric vehicle is not the right solution. And whether it's us or our peers you need IC engine vehicles."
That is why he said JLR is investing in both and "we have just set up assembly for latest 6 cylinder engines. We have to do simultaneously the renewal and refinement of IC engines and also define a new world and invest in a new world of electrification".
On JLR's performance in China, Speth said, "I guess we are going forward in the right way. In China, we are on track. The last three years we have grown in double digits." He, however, added, "It is also clear that we don't know how the economy is going to turn up and how China will manage it. We can't predict how it will be in the future."
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