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-   -   Mahindra ties up with Ola, targets Rs. 2,600 crore business (https://www.team-bhp.com/forum/indian-car-scene/179903-mahindra-ties-up-ola-targets-rs-2-600-crore-business.html)

Mahindra has signed an MoU with Ola to enter an alliance with the ride hailing service provider. The tie up is aimed at expanding Ola's fleet strength by 40,000 new cars in the next two years. While this is expected to help Ola increase its reach and footprint, Mahindra is targeting a total revenue generation of around Rs. 2,600 crore in the next two years through the said tie up.

Anand Mahindra, Chairman of the Mahindra Group had claimed that ride hailing service providers like Uber and Ola will hugely impact vehicle sales of the future. With the new MoU, the company seems to be partnering the growth of one such service provider, and in turn, trying to increase its market share. Mahindra has also announced that the partnership involves not just Mahindra Auto, but various other businesses of the Mahindra Group, including Mahindra Financing, Mahindra Insurance, etc.

Through the partnership, Ola's driver partners will now be able to opt for a 'Mahindra-Ola' package, which includes discounted prices for Mahindra cars, financing with zero down payment, maintenance packages, as well as exclusive benefits on the Ola platform. The companies claim that this new initiative will encourage micro-entrepreneurship among drivers.

For now, Mahindra will be selling conventional fuel cars, mainly the Verito, to the Ola drivers. There is a possibility that Mahindra's electric cars will be inducted in the Ola fleet in the future.

This isn't the first time that an automotive manufacturing company has announced a partnership in a ride hailing service provider. Tata Motors and Uber had gone into a similar agreement a couple of months back.



Link to Team-BHP News

Just a question:
Are these kinds of deals made for pushing out excess stock?
I remember Tata signing a deal with Uber a few months ago.

Easy way for Mahindra to sell their excess Xylos and Tata to sell their excess Indicas/zests

Rather than pushing out excess stock, it is now being seen as an opportunity for carmakers to cash their old, slow-selling models.

Consider this, as far as the passenger vehicle segment is considered, the Verito is a dead product by now. The Verito sedan and the Verito Vibe hatch are cumulatively clocking 200-300 unit sales every month. That is a very low sales figure for keeping the assembly lines rolling.

But now, under the said partnership with Ola, Mahindra has opened up a new market for the Verito. Even if half of the claimed 40,000 drivers opt in for the Verito, it will be equivalent to 100 months (over 8 years!) of sales by Verito's current pace of 200 dispatches per month.

Moreover, it isn't just the auto business that is benefitted. Be it the Tata-Uber alliance or the Mahindra-Ola tie up, both the automakers have combined their financial and insurance verticals into the aggregator's business models. This makes a win-win equation for all: the automakers, service providers, as well as the driver partners.

I personally feel that the Taxi business will see more partnerships with automakers in the future. Not all companies are shy of adding a commercial vehicle image to their models, case in point - the Toyota Etios. What was once perceived as a threat is now being looked at as an opportunity.

Look at the picture behind those two gentlemen.
Verito is the biggest car in that picture, but they have displayed Xylo, Scorpio and KUV as well.