The Hindu Business Line : Corporates offer cars to retain talent

New Delhi, Oct. 30 A rapidly increasing attrition rate in the corporate world seems to be widening the opportunity-cake for the corporate car leasing industry. After non-poaching agreements with other companies and contracts with their employees, companies now consider cars as a carrot to shackle junior and middle level managers who are constantly on the job prowl.

Corporate car leasing companies, who have smelt the opportunity, say that unlike earlier days when companies offered cars only to those at key positions, they are now offering them to employees at lower levels too.

“Retaining talent is a key reason behind more and more corporates offering leased cars to their employees at the lower level. So the perks that were offered at key senior positions are now increasingly being seen provided to Assistant Managers,” said Mr Rajiv K. Vij, Managing Director, Carzonrent ( India) Pvt Ltd, the master franchisee for Hertz in the country.

The company has about 45 corporate clients to which it offers car leasing services. It also provides rental services.

According to him, about 10 per cent of these clients offer cars to junior and middle-level employees.

Tax saving

While employee motivation is the key reason for the HR department to offer the perk, tax saving and its impact on the balance sheet are also other factors leading to growth of the corporate leasing industry.

LeasePlan, the largest player in the segment — with about 650 corporate clients across all sectors including consumer durables, banking and financial services, pharma and IT — also estimates that companies are increasingly lowering the barriers for their car policies to employees.

Junior slot

“We are certainly seeing companies opening up their car policy to the lower level. Of our overall portfolio, 10-15 per cent of the clients lease cars for junior level employees,” said Mr Prashant Puntambekar, looking after all-India sales for LeasePlan.

As a matter of fact, some companies are also offering cars to entry-level employees who have less than two-three years of experience, said Mr Sanjeev Prasad, Country Manager of LeasePlan.

With this trend, the company sees a growing opportunity for its business.

Megacabs, which operates a fleet of radio taxis, is also eyeing the same space and plans to foray into the expanding pie of the corporate car leasing business after Diwali, said Mr Binod Mishra, General Manager of the company’s fleet operations.

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