It is a very big call: Innoson Vehicle Motors (IVM) will launch a vehicle-hailing service in Eastern Nigeria in Q4 2020. According to Techpoint, they will begin with 200 vehicles and then ramp up to 500, covering most parts of Eastern Nigeria. Drivers will be trained by the Federal Road Safety Corps (FRSC).
Prospective drivers to operate the fleet must be tech-savvy, and with capacity to pay back the vehicle within two years via a hire purchase agreement. For the integrity of the hire purchase system, all transactions would be electronic. Yes, IVM is going all electronic on payment here. This is the way to go: IVM can use this playbook to even sell more cars. If that works, it could open it up with a leasing service in Nigeria.
This is a double play strategy. He can lose money on this but in that process, he will create a brand where IVM vehicles become common on the streets. Just like that, everyone goes for IVM. Brilliant call by the legend as he can capture value via sales through brand awareness triggered by IVM Connect.
The risks are on the aggressive two year hire purchase plan which I think may not be possible. Also, the vehicle-hailing business has not shown capacity to be profitable at scale anywhere. But the little losses may bring popularity through awareness this will bring.
When great entrepreneurs emerge, nations rise. Well done Innoson Motors.
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And Innoson goes techie, it shows awareness.
The two year hire purchase doesn’t look feasible, that could deny drivers their daily bread, in trying to meet target. The cost of the vehicles holds a lot of cards there, if they are new vehicles, 3 – 5 years contract could crack the code; not sure two years captured drivers’ wellbeing.
And now a local big masquerade is entering the ride-hailing forest, maybe our brittle and itchy regulators across states would now be forced to behave. When you have a lunch with a big man, it’s all handshakes and smiles afterwards…
We see how it goes.
The Eastern and South South Market will keep them busy. Just returned from the east and it was a bit challenging navigating the various social engagements within the short stay. Am sure the market is there to be enormously tapped. The issue that seems knotty for me n is repaying for the vehicles within the two year window.
In all its a great step at creating employment for the venturesome youths of the region.
This is an interesting development, but a bit concerned that they are starting in the south eastern part , except the intention is to show their solidarity and create a market where there is none, I think a simple denominator of a ride hailing service would be the volume of traffic and the percentage of upward mobile people willing to pay for that service. I would have thought targeting the commercial hubs and travel destinations would be the way to go.
“This is an interesting development, but a bit concerned that they are starting in the south eastern part , except the intention is to show their solidarity and create a market where there is none” That is not correct. Onitsha is the largest market in Africa, more than any market anywhere in Africa. Also, why come to Lagos where there is Uber when there is free-range chicken opportunity in SE? You noted the number #1 issue entrepreneurs make: enter a red ocean and waste resources. Coming to Lagos means he has to offer discounts to get drivers from Uber and Bolt. But in SE, that is not necessary. Saying there is no market in SE is unfortunate. It is a faulty assumption that people do not move around in Aba, Owerri, Awka, Onitsha, etc. I do not understand the statement.
I moved my office from Lagos to Owerri in 2013 and we saw huge benefits. In this age of WFG, there is really no benefits of begin in big cities if you offer web services. The assumption that you need to be in Lagos to serve people digital contents online is faulty. And the assumption that you need to join Uber, Bolt, etc to destroy value in Lagos when other cities are free is faulty. Look at this from a different angle.
I definitely agree with you. There is no need to continue to overcrowd and supersaturate Lagos with the investments. But who are the people that travel a lot – South East and South South people, of course. In the East, you have market for every good thing. The population may not be as high as in Lagos but the people are mobile and resourceful, which is what is needed. Traffic will not keep you in one place for a long time.
Please bring your investments to the South East. Your product will sell.
All hail INNOSON.
It’s great we have a vehicle production company in Nigeria really welcome, but our it’s yet accomplish but with what we are seeing it’s simply means that the common man Messiah is yet to be born and more so our vision of eradicating fairly used in Nigeria we still need divine intervention because when the price list it’s amazing but we really need better Nigeria where we can be bost of a good life but Kudos to INNOSON in Nigeria the wisdom you God will grant you guys.