Luxury car maker BMW and taxi hailing app Ola have signed an MoU to provide on demand luxury cab services in India.

While BMW wants to expand the luxury car market in the country, which is less than one per cent at present, for Ola it is just another extension to its luxury segment "Ola Lux" that it had launched in June this year and is present in just three cities.

The Bengaluru-based company plans to extend the same to other markets soon. Ola targets to double its revenues from this segment this year at a mere two per cent, said its COO, Pranay Jivrajka. Currently the fleet size is 1,000.

Meanwhile, several global as well as domestic auto majors across the world are re-thinking their strategies as they witness decline in auto sales due to the growth of on-demand economy globally.

Frank Schloeder, President (Acting), BMW Group India, said that India is a very small market with only 35,000 cars and the young generation is not looking at buying cars and homes anymore but believe in shared economy.

As a part of BMW Group's NEXT 100 strategy, the auto major wants to focus on how individual mobility will diversify in the coming future through connectivity, digitalisation, technology and sustainability.

He said that the European market is already witnessing a huge growth in shared mobility and India is also a potential market.

However, on whether BMW will come out with cheaper models or tweak its pricing to be able to cater to the shared economy, Frank did not wish to comment.

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