Japanese giant Sumitomo buys car lease division of Carzonrent India

Sumitomo Mitsui Auto Service Co. Ltd, a wing of Japan’s biggest car leasing business group Sumitomo Corporation, has acquired the car leasing business of Carzonrent India. With this, Carzonrent will transfer the car leasing rights of its fleet to Sumitomo’s Indian arm. The deal was done for INR200 crores (US$32.3 million), The Times of India reported.

Founded by Rajiv Vij in 2000, Carzonrent has a fleet of about 6,500 cars across India. It claims to have 18 percent market share in the organized car rental sector. Currently, Carzonrent offers chauffeur-driven cabs under the Easy Cabs brand and the self-drive car rentals under MYLES brand. Carzonrent India offers car rentals in 39 Indian cities.

According to a statement from Sumitomo, the company wants to get a foothold in the Indian taxi market, which is seeing a dramatic surge in the last one year. “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 read.

Carzonrent aims to invest INR2,000 crores (US$370 million) in next four years to expand in the domestic market as well as foray outside. This investment from Sumitomo will also be used to boost its fleet to 30,000 cars, including premium and luxury vehicles. Earlier this year, Carzonrent placed a large order with Mercedes-Benz for 120 C-Class luxury sedans.

Sumitomo is also looking at other emerging markets in the Asia-Oceania region and elsewhere to further expand their overseas operations and auto leasing business.

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(Top Image: EasyCabs Facebook)