LOOKING AT the larger PICTURE

Rajiv Vij (CEO & MD, Carzonrent) on his long- term approach driven by strong principles

Q. What led to the establishment of Carzonrent?

A. I spent the first 15 years of my career working for the Birla group, where I would sell old Ambassador cars. Later, I also worked for an international travel house for five years. In 2000, I decided to move from the travel house and got into the current business.

This industry has a large growth potential in India, and with time it will structure itself like in the developed parts of the world. It is this belief that drove me to set up this company. If this industry had not grown earlier in India, it was not because it lacked the potential but because all the players were not viewing it as a core business activity. Rather it was looked upon as an activity to support their businesses – hotel, travel or financial services business. I believe businesses build up when there is at least one success story in the industry to inspire others.

If you do not have any success story, the industry will not advance and will eventually die. Therefore, my objective was to ride the first success story in the business.

Q. What were the challenges at that point in time?

A. When I decided to get into this industry, it was a general perception that this was a very fragmented industry, which had not progressed. Despite companies like ITC, Oberoi and ILFS being in this industry for long, there was not much progression. There was no big player; the biggest player had only 600 cars. The industry did not have a status enjoyed by the aviation or the hospitality sector. The big challenge was to become capital-intensive industry player.

Q. What was so unique about your business model that helped you succeed?

A. My approach towards business was different. It was long term, driven by strong principles and robust values. From day one we adhered to all the laws of the land, focused on ensuring that every employee gets his salary on the last day of the month. We made sure that our commitment towards banks is met timely.

As a result, at any given time, we get instant approval on loans and other services. Initially we decided to look at drivers as business partners and implemented a model where we helped a lot of them to own the particular cars they would drive. This helped a lot, as the driver automatically developed an interest in that asset. We knew that unless we made them a part of the business we would never succeed.

Q. How many cars did you start your business with?

A. We started with 29 cars, though we did not have the money to purchase them and had a small equity of INR 30 lakh. I had some friends in banks, who had confidence in the business model and decided to fund the cars.

 

Q. How difficult or easy is it to start the business today? Will you still do it?

A. I would possibly still do it. Today, I will perhaps need more money to begin the business, as the investment has increased drastically and entry of new companies in the industry has become more challenging.

Q. You have a large database of customers you serve. How do you ensure that the information is not misused?

A. We have invested heavily on technology and use every possible tool to protect our data. We do not sell any of the data and do not use it without our customers’ permission. It is important to maintain the privacy of data and that of the customers because they not only give us their personal but their financial data as well.

Q. How would you define the DNA of your company?

A. Early on in our business, one fundamental thing that we had structured was the use of the best of entrepreneurship and corporate world. This combination is difficult to find. We believe in serving our customers’ expectations and configure products and services that meet those expectations. Our ability to innovate and continuous delivery to our customers is what constitutes our key strength.

Q. How would you define your leadership style?

A. I always keep my team with me. I make sure that they have complete involvement in everything that we do as a company. Today, they have complete ownership of whatever they do. I have been successful in getting good people and making sure that they are motivated and have a sense of ownership of everything they do. I have a vision and I make sure that my team has the same vision for the success of the company.