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Old 2nd December 2018, 11:39   #1
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Default Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

Interesting comments from the Chairman of India's largest car maker:
https://auto.economictimes.indiatime...ility/66890639

This makes sense:

Quote:
One car under shared mobility does the work of five personal cars, reducing congestion, he said. Increased use of shared mobility reduces parking problems and cost of mobility will become much less.
This does not:

Quote:
“People should start thinking why do I need to buy a car. I buy a car costing Rs 10 lakh. And 80-90% of the time it is lying idle. What a terrible waste of capital,” he said
When companies buy depreciating assets (truck, aircraft, ship, industrial machinery etc), their goal is maximum utilization of the asset so that they can earn some money!

But when individuals buy depreciating assets (smartphone, computer, AC, toilet commode), it is never with an intention of using it all the time. An individual's idea behind purchasing a depreciating asset is 24/7 availability of the asset for personal use at any instant.

Last edited by SmartCat : 2nd December 2018 at 11:41.
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Old 2nd December 2018, 12:14   #2
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

I wonder would he have said the same thing if he were still chairman of MSIL with shareholder value creation targets to meet....
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Old 2nd December 2018, 12:19   #3
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

Quote:
Originally Posted by smartcat View Post
This does not
It does when you add one word -

'People should start thinking why do I need to buy a Maruti car.'

Quote:
Originally Posted by smartcat View Post
An individual's idea behind purchasing a depreciating asset is 24/7 availability of the asset for personal use at any instant.
Makes sense - and in a way, this is the EXACT reason why Uber is hitting car ownership levels hard in cities, specially among the young tech savvy generation.
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Old 2nd December 2018, 12:59   #4
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

I hope Mr. Bhargava has not been roped in by Zoom car to market their ZAP offering. This came to mind when i read the line "And 80-90% of the time it is lying idle. What a terrible waste of capital,”
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Old 2nd December 2018, 13:11   #5
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

Makes sense for economic, environmental and social reasons. Flipsides are privacy, personal safety and convenience. Ride sharing is very common in advanced countries, it reduces pollution as well as provides an economical transport. Unfortunately our taxing constraints and legal ambiguities have banned ride sharing. Related thread (Karnataka: Carpooling app? Your car could be seized).

Last edited by Thermodynamics : 2nd December 2018 at 13:17.
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Old 2nd December 2018, 13:48   #6
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

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Originally Posted by CrAzY dRiVeR View Post
Makes sense - and in a way, this is the EXACT reason why Uber is hitting car ownership levels hard in cities, specially among the young tech savvy generation.
Do you have any number/facts to justify/support your hyperbole? Car's are still aspirational in India, even something as humble as a Maruti Alto.

Last edited by extreme_torque : 2nd December 2018 at 14:04.
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Old 2nd December 2018, 15:36   #7
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

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Originally Posted by extreme_torque View Post
Do you have any number/facts to justify/support your hyperbole? Car's are still aspirational in India, even something as humble as a Maruti Alto.
Lots of anecdotal evidence - relatives not buying a new car or getting rid of an unused car because of convenience that Ola/Uber offers. We have some data to support such a thesis but it is not conclusive. .

- Taxi sales accounted for 9 percent of sales in 2016
- It is estimated to account for 15 to 17 percent of sales in 2020.

https://www.moneycontrol.com/news/bu...a-1060217.html

Quote:
Originally Posted by shankar.balan View Post
I wonder would he have said the same thing if he were still chairman of MSIL with shareholder value creation targets to meet
Bhargava seems to imply that growth in shared mobility platforms will be good for car companies like Maruti.

Quote:
In the long term, even if there is a decline in personal ownership, increased utilisation of vehicles by shared mobility platforms will shorten replacement cycles and help boost sales, Bhargava said.

“What is the most important parameter for determining when a car should be scrapped and replaced — how much it has run. Now if more people are able to use a car and run distances which are otherwise run using two-wheelers and three-wheelers, will that result in more car running than an individual car running or not,” he asked. “So, the replacement cycle will become faster, I will have more sales … That is why I want shared mobility.”

Last edited by SmartCat : 2nd December 2018 at 15:40.
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Old 2nd December 2018, 15:37   #8
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

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Originally Posted by extreme_torque View Post
Do you have any number/facts to justify/support your hyperbole? Car's are still aspirational in India, even something as humble as a Maruti Alto.
Hyperbole! If you're not sure if there is fact behind the statement, or not have proof for a counter argument - why do directly call it a hyperbole?

Anyways, yes it is supported with the below discussions -

https://www.team-bhp.com/forum/india...ml#post4393306 (Car sales dropping in the Metro cities: Just a blip or a larger trend?)

Last edited by CrAzY dRiVeR : 2nd December 2018 at 15:42.
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Old 2nd December 2018, 16:00   #9
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Quote:
Originally Posted by CrAzY dRiVeR View Post
Hyperbole! If you're not sure if there is fact behind the statement, or not have proof for a counter argument - why do directly call it a hyperbole?
I did not make that statement and therefore the burden of proof lies with you not me. Its a hyperbole (dictionary definition:exaggerated statements or claims not meant to be taken literally) subject to your definition of "hitting hard".

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Originally Posted by CrAzY dRiVeR View Post
Are you clear on distinction between what is a reasoned fact vis a vis speculative discussion?

Quote:
Originally Posted by smartcat View Post
Lots of anecdotal evidence - relatives not buying a new car or getting rid of an unused car because of convenience that Ola/Uber offers. We have some data to support such a thesis but it is not conclusive. .

- Taxi sales accounted for 9 percent of sales in 2016
- It is estimated to account for 15 to 17 percent of sales in 2020.

https://www.moneycontrol.com/news/bu...a-1060217.html
So what is the percentage drop in sales vs increase in Taxi sales? What percentage of taxi sales it usually is vs personal car sales? Also, anecdotal evidence is not evidence. Anecdotal evidence that my friend uses Uber/Ola does not mean my friend does not own a car. I do not know a single person who uses Ola/Uber all the times but does not own a personal car. Its hardly what I would call "Hitting Hard".


Quote:
Originally Posted by smartcat View Post
Bhargava seems to imply that growth in shared mobility platforms will be good for car companies like Maruti.
Well its a statement from an executive of a car company looking for the next growth area but I am not sure if India is actually ready for large scale car share programs apart from Ola and Uber and its mostly related to infrastructure more than anything else.

Last edited by SDP : 2nd December 2018 at 17:23. Reason: Merging back to back posts. Please edit or multi-quote instead of typing one post after another
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Old 2nd December 2018, 16:43   #10
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

Capital allocation is a personal decision of an individual. As long as an individual is able and bears such cost of his decision, that is fine. This is called freedom, liberty.

WRT pollution impact of vehicular density, that is a function of urban planning, road width etc. That the Indian political-bureaucratic power structure will come up with such strawman arguments to deflect responsibility is par for the course.
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Old 2nd December 2018, 18:50   #11
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

What futuristic India is this fellow living in? Can I get a ticket?

While everything he says is hunky dory on paper, two questions:

1) Can you assure me of quality
2) Can you assure me of safety

If someone can guarantee these two things, I'm more than happy to not go for ownership.

Quote:
Originally Posted by smartcat View Post
An individual's idea behind purchasing a depreciating asset is 24/7 availability of the asset for personal use at any instant.
This is the crux! In the absence of reliable rent-a-car options, widespread app-based taxi network and public transport, one HAS to have a vehicle.

Forget smaller cities and towns: an unfortunate reality in a city like Pune is that one has to know how to ride/drive and own a vehicle because of the non-existent public transport and whimsical auto-wallahs.

This statement from Mr. Bhargava is fit for some Vision 2025 conclave, but terribly removed from reality.
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Old 2nd December 2018, 19:05   #12
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

Whatever his motivations are, let us welcome the change in Mr Bhargava's thinking. :-)
At least he is thinking about the future now rather than defending the status quo. So far we have only heard him say that adding safety features will increase the cost of the car and that a unsafe car is still safer than a two wheeler!
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Old 2nd December 2018, 19:11   #13
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

May be he forgot which company he's working for, as one ages such slip ups are normal.
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Old 2nd December 2018, 19:17   #14
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

Bhargava seems to be taking a page out of GM's book. GM's CEO Mary Barra reiterated recently (albeit part of an operations restructuring announcement that's drew Trump's ire) that the new GM of the future will reinvent itself heavily on shared rides using autonomous self-driving cars ("robo-taxis"), and reduced conventional ownership.

Last edited by theMAG : 2nd December 2018 at 19:21.
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Old 2nd December 2018, 19:44   #15
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Default Re: Maruti's RC Bhargava says individuals buying cars is a waste of money, bats for shared mobility

What he says is absolutely true, although in an ideal world. The only issue - none of us live in that ideal world! Our real world will immediately collapse if one were to heed to such council. Best ignored would be my best response.
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