Maruti Suzuki, the country’s largest carmaker, may soon offer a new product for companies with a large fleet of vehicles, such as taxi operators, BPOs and IT companies.
The company has called for a shareholder vote on including fleet management services in its memorandum of association — the most basic document of a company that serves as a company’s constitution.
In a regulatory notification, Maruti Suzuki said it wants to amend the MoA to add the following to the aims of the company:
“To carry on the business of: (i) operating/maintaining/availing/providing web-based services, information technology platforms and other IT-enabled services on digital and electronic networks for facilitating sale and/or provision of goods and services, and to undertake all activities that are incidental or ancillary thereto, including, but not limited to: (a) partnering with third party operators and service providers for the operation/maintenance/availing/provision of such platforms and ancillary services; (b) levying fees/charges for providing such platforms; (c) providing advertising space to third party sellers/service providers on such platforms; and (d) facilitating payments by customers for purchase of such goods and/or availing of such services; and (ii) developing and selling / licensing software and relevant applications (including through third party providers) for automobile / mobility management, including but not limited to fleet management services.”
Shareholders can cast their postal ballot by Feb 5.
Maruti Suzuki has been acting purely as a manufacturing company so far. However, changes in technology, business models and consumer preferences has forced many pure manufacturing or product companies to start offering their products as services.
This phenomenon, also called the ‘as-a-service’ model, was first seen in the software products industry.
Many companies that used to sell their software on optical disks for a fixed fee, such as Oracle and SAP, have been forced to start offering these products as services.
For example, Oracle, which used to offer a software that a company could install on its office computers to manage inventory, production and employees, now offers the same in the form of a web page into which the company’s employees can log in and upload data.
Within the personal transport industry, companies that used to make and sell cars are increasingly offering ‘car-as-a-service’.
Maruti Suzuki has been a pioneer in this field in India, and offers a ‘car subscription’ service under which a person can ‘subscribe’ to a model of his choice and take delivery of the same in return for a monthly fee. When the subscription is canceled, the car is taken back by the company.
Maruti has currently tied up with Japan-based car rental player ORIX to offer its subscription service.
It is possible that its interest in vehicle/fleet management services and software may be related to extending such a rental service to corporate customers such as taxi companies and others such as BPOs and IT/outsourcing companies.
It is also possible, though less likely, that it is not interested in providing its vehicles, but is only looking to sell software or service as an independent offering, allowing taxi companies and other corporate clients to manage their existing fleets of vehicles.