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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