Reliance Not Selling Cars: Mukesh Ambani is one of the richest people in India, and his Reliance Industries is working in different sectors. You might have seen Reliance’s salt, SIM, petrol etc. in the market, but you might not have seen Reliance’s cars. Mukesh Ambani is active in every major sector, but not in the automobile business. Have you ever wondered why Mukesh Ambani, who runs a top company like Reliance, does not sell cars? Let us consider the reason for this.
The main businesses of Reliance Industries include petrochemicals, oil refinery and telecom. Along with this, Reliance is also active in the retail sector. But Reliance automobile Have not entered the sector. What is the reason that stops Mukesh Ambani from making cars? After all, despite being the owner of such a big industry, why is he avoiding selling cars?
Reliance’s main business
Reliance’s main focus has been on core sectors like energy, petrochemicals and telecom. Most of these businesses are such in which Reliance deals directly with business corporates. Its another successful business model is telecom, in which the company directly connects with the customers through Jio.
1. Preference for B2B business
This proves that Reliance’s working model is mainly business-to-business (B2B). There is no direct interference of customers in such business models. Jio is a business that works on business-to-customer (B2C) model. In the case of Jio, the company connects with the customers, and it is through Jio that Reliance has a network of millions of people.
It is clear that Reliance mostly runs its business through B2B. But selling cars is a B2C business model. In the automobile sector also dealings are done directly with customers. But the automobile sector is different from the telecom sector. Recharging Jio is cheap, but buying a new car requires a big budget.
2. Customers and Demand-Supply
If you go out in the market to buy a new car, you will have to spend at least Rs 5-6 lakh for a right car. There are many customers who fulfill their dream of buying a car through car loan. Apart from this, the supply of cars is more than the demand. But the trend of Reliance has been in such a business where supply is less and demand is more.
3. Capital Investment
One reason is that the automobile industry requires a lot of investment. Time and money have to be spent on many tasks like research and development, manufacturing and marketing. Therefore, instead of investing big money in the automobile sector, it is better to invest money in those businesses where Reliance is already strong.
4. Market Competition
There is already tremendous competition in the automobile sector. International brands including Maruti Suzuki, Tata Motors, Mahindra are in the race to sell cars. All these brands are old players in selling cars. The competition of these brands will have to be tackled with huge investment.
5. Renewable Energy
Reliance is now moving forward in the emerging renewable energy business. But the automobile sector runs on fuel. Therefore, there may be a conflict of interest in both the sectors. The trend of electric vehicles is increasing, but it is not so much that we start making and selling cars based on it.
6. Electric Vehicle Industry
However, Reliance definitely does the business of electric vehicle technology and batteries. But B2B business applies here also. If Mukesh Ambani starts making cars, then there may be a conflict with this business.
These are some of the main reasons which prevent Mukesh Ambani’s Reliance from selling cars. Every industry does business keeping in mind its business model and objectives. Perhaps Reliance does not find the automobile sector suitable for itself, hence steps have not been taken in this direction.
