ASSIGNMENT

RESEARCH
METHODOLO
GY
SUBMITTED TO: SUBMITTED
BY:
Mr. Chander shekar Dogra Ravi Shankar
Kumar
LECTURER RR1002 A-12
DEPT. OF BUSINESS & ARTS 110003576

1
 LOVELY PROFESSIONAL
UNIVERSITY

TOPIC
STUDY OF GROWTH
OF

LUXURY
CAR
SEGMENT IN
PUNJAB
2
 INTRODUCTION
Punjab is today viewed as a hot market for cars from the sales point, especially in
the luxury segment. The U.S. auto industry is faced by a situation where it looks
standing on the brink of disaster. The large industrial growth coupled with the
partiality to spending on machines, has given a push to the premium car segment in
Punjab. Recently, the Ford Company launched New Ford Icon in Chandigarh in
view of the growing potential in Punjab for cars. The real strength is that there is
passion for motor vehicles among people of Punjab. People travelling long
distance looks for latest features in their vehicle in terms of safety, security and
drives ability and also has a passion for standard and status symbol. For such
people, luxury cars are absolutely right product. Luxury cars are going to have very
strong market share for new marketing strategies in Punjab.
Punjab is turning into a luxury car heaven as BMW, Skoda, Audi,
Volvos and Mercedes find space in the hearts and garages of the State. Despite
slowdown, people in Punjab are willing to spend money for their dream machines.
Growth in the real estate, boom in business and good agricultural produce in
Punjab, there has been an optimistic response in the market. So the luxury car
market has also come up. As a majority of Punjabi’s buys cars with cash, and do
not depend on bank loans, the car market remains stable in Punjab. Also, with
rising incomes, the market for luxury cars has been growing at an average of about
25 per cent. The people who lived in Punjab are having enough money to buy cars.

3
They like to have latest models and technologies available in the market. Most of
the luxury cars are sold in Punjab only. Seeing this trend companies are launching
their products here. People in Punjab have enough money and as well as style,
People bought the luxury cars to establish their status. Out of every 5 people 3
would dream to buy a Mercedes in Punjab. There are now a wide variety of
luxuries cars in the Punjab market and people are easily attracted to them. In India,
over 35 million Cars are sold every year. Cities like Chandigarh are being flooded
with luxury car dealers who were ready to book a car costing thousands of US
dollars. In Punjab, from where a majority of people goes abroad, the demand for
luxury cars have increased tremendously. In Punjab where one is going to buy a
car because of its functional value. On the other hand, other buy car because it give
them a competitive status.

With the growing consumerism in the big cities of Punjab, a new culture of
big showrooms has introduced. The craze for luxury cars among the youth would
increase by a shoot. In Punjab Luxury cars is not limited to star personalities only.
Common people with some money in their banks would ready to spend it just to
owe a luxury car; they didn’t hesitate in spending Rs 40-50 lakhs to fulfill their
dream.

When people go out for buying a car, they look for international brands,
Quality matters the most for them. If they have to buy a good brand then they have
to pay for it. This is the modern mentality of a rational consumer for a car in
Punjab. When it comes to Mercedes cars, Punjab is on top gear. The craze is so
much, especially for the newly re-launched and modified C-class, that the dealer
has virtually run out of cars of this model. Youngsters particularly want to buy this
car model, given its attractive features and the new design. At a time when this
region is witnessing growing competition among leading top-end foreign brand
cars like BMW and Mitsubishi Montero and Pajero, Mercedes.

Mercedes-India has officially acknowledged Ludhiana as the Merc-

capital of the world. The industrial city has over 550 Mercedes cars while
Chandigarh has another 300. Jalandhar city, which falls in the NRI-rich belt,
boasts of 250 plus Mercedes cars.

 Audi opened its sales office in Ludhiana.

4
  Luxury car manufacturer Mercedes Benz opened a sprawling showroom in
Jalandhar.
 German car maker BMW also has plans to start selling its cars in Ludhiana.
 Another car maker Volkswagen opens an outlet in Jalandhar.
Punjab has a rapidly growing economy. People here want to show it to the
world. With its roads teeming with the luxury cars, they want to proclaim to the
world how life is to be enjoyed. This is just a beginning for Punjab to register its
name in the commercial world; it is believed that a positive tendency among
buyers in Punjab will help the automobile industry to overcome the crisis. And the
state of Punjab, where people want to drive in “luxury”, will continue to attract
players in the automobile sector.

OBJECTIVE
1. Mounting demand for luxury cars in Punjab
2. Reasons and facts which influences people in Punjab to buy a luxury
3. The raised standard of living of the people of Punjab.

METHODOLOGY
The data in the report has two types of data:

1) Primary data: under this the data is collected by me, by applying

different statistical methods of collecting primary data, direct contact with
the persons from whom the information is to be obtained for this purpose I
visited some of the dealers in jalandhar who deal in luxury cars, then I
collect the required information through questionnaires which I distribute
among the customers who were there in the showroom to know about their
response towards buying a luxury car, almost 100 people in different

5
 showrooms gave their response towards the luxury cars, which helped me to
analyze the growth and increased demand of luxury cars in the Punjab.

2) Secondary data: under this I have gone through the article and reports
published and analyzed by different authors, as secondary data is basically
that data which is already in existence, and which have been collected for
some other purpose. Thus this data also help me to analyze that how luxury
car market makes a boom in Punjab for the luxury cars in spite of low per
capita income the growth in luxury car segment has been seen from a past
decade which shows that the people in Punjab has money and desire to have
a luxurious life.

REVIEW OF LITREATURE
ARTICLE 1-
Punjab emerges as a new market for cars
Karan Kapoor, Sunil Sharma,(2008)
Punjab continues to be an enigma for luxury car manufacturer who have a base in
India. The Punjabis love for Mercedes-Benz, BMW, Volvo, Skoda, Honda and
Fiat. Punjab holds the record for purchasing the highest number of Mercedes in the
country. Punjab is a darling of luxury car manufactures. The main factor in the
overall rise in sales of luxury cars is the real estate boom. People who have sold
their lands are going for luxury cars; money sent by NRI relatives is contributing
immensely to pockets of people. As dollars and pounds are flowing down to
Punjab people here are looking for ways to spend them. One of the first choices
owes cars. The next biggest factor is the easy availability of bank credit. It is learnt
that farms loans have been diverted towards luxury cars. While real estate boom
has helped them sustain the loan repayment capacity. Owing a Mercedes or BMW
is a symbol of their lifestyle.

ARTICLE 2-
6
World Review of Entrepreneurship, Management and Sustainable
Development
Hyun-Sook Lee and Beverlee B. Anderson, (2008)

This article analysis about of the automobile industry, specifically as it

relates to a move into India. The environment and forces of the industry is
analyzed to give insight as to the opportunities and challenges of entering the auto
industry in India. Especially in some particular states in India, like Punjab, where
the sale in cars particularly in luxury cars had increased over a past decade. The
purchasing power and standard of living had increased in Punjab due to which
people there are more emphasized to buy at least one luxury car for them. Foreign
car manufacturers now focus more towards Punjab, because of more demand of
imported and luxurious cars in Punjab from last few years and it increases day by
day.

ARTICLE 3-
High demand for luxury cars in Punjab
S L Talwar, (2010)

In Punjab, people are inclined to buy new and luxury cars frequently and is
being viewed as the hot market for all cars. The large industrial growth coupled
with the partiality to spending on machines, has given a push to the premium car
segment in Punjab. Punjab and Haryana are capturing the 15% of the luxury car
such as Audi, Porsche and BMW market of the country. Jalandhar and Ludhiana
have the largest number of Mercedes in India. Punjab has plenty of NRI money
and they spent them on luxury items like cars. Luxury cars are a status symbol for
the people in Punjab along with Chandigarh. The people here are having enough
money to buy cars. They like to have the latest models and technologies available
in the market. Most of the luxury cars are sold in Punjab. Despite the crisis, the
small car segment has achieved 15% growth in Ludhiana city alone. Ludhiana
holds the tag of highest number of Mercedes and the number is growing. Other
premium models, like Skoda and Toyota Corolla, are also very popular brands.

7
ARTICLE 4-
Punjab consumers presses the peddle on high-end cars
Swarleen kaur, (2008)

The large industrial growth coupled with the flair of spending on machines,
has given a push to the premium car segment in Punjab. Despite the diminishing
agriculture growth, Punjab is turning into a luxury state, as BMW, Skoda, Audis,
Volvos and Mercedes find space in the hearts and garage of the state. Increase in
sales of automobiles in the luxury segment validates the fact that the people of
Punjab are ready to shell money for their dream machines.. Industrialists and the
NRI belt have given a boost to the sales of premium cars. Besides, service and IT
sector is set to grow in the state, which will encourage many young professionals
to buy their dream cars. Above all, Punjabis like to spend, which remains the
biggest factor for high sales of cars.

ARTICLE 5-
Luxury car market on the rise in Punjab
Komal Amit Gera & Vijay C Roy, (2007)

Despite dwindling agricultural income and increasing suicides by farmers in

Punjab, the state remains one of the bestsellers for luxury cars in India. And, the
growing density of luxury cars is a clear indication of growing income disparities
in the state. Despite a modest GDP growth rate of 5% in the state in the last
financial year, a little more than half the country’s growth rate of 9%, and a
stagnant rate of growth in agriculture at 2% per annum for the past five years, the
automobile sector considers it a potential market for the new launches. Apparently
remittances from NRIs contribute immensely but another factor is the sudden shift
of income because of the real estate boom. The land prices in the state have broken
all records and the landlords and rich farmers are becoming richer by selling land.
The quick money earned is being mostly spent on luxury cars. The easy
availability of bank credit has facilitated the growth of automobile sales in Punjab.

8
ARTICLE 6-
Luxury autos vroom into Punjab
Maheswaran Parameswarn, (2007)

Luxury car brands like Audi, Porsche and BMW have dealer in the Punjab-
Haryana region, despite it boasting 15% of the Indian luxury car market share.
Ludhiana and Jalandhar are home to the largest number of Mercs in India. BMW
and Audi have appointed authorized dealers here, while Porsche is about to finalize
its dealer in the region. Chandigarh has bagged the dealership for German auto
giant Audi. Currently, it has dealerships in three cities, namely New Delhi,
Mumbai and Bangalore. Punjab has plenty of NRI money and they spent them on
luxury items like cars. Luxury cars are a status symbol for the people. Moreover,
Punjab along with Chandigarh has one of the strongest economic centers in the
country. There is a lot of business opportunity in this region and that's the main
reason of the dealership

ARTICLE 7-
Punjab, bestseller for luxury cars in India
B. Bowonder, (2009)

Punjab has stood one of the bestsellers for the luxury cars sales from
previous years. The real-estate boom in Punjab touched high and the landlords
made quite good bucks by selling their lands and the quick earned money played a
role on spending on luxury cars.. Ludhiana holds the tag of highest number of
Mercedes and the number is growing. Other premium models like Skoda and
Corolla are also very popular brands in the state The research shows that despite
the overall picture of economy growth in Punjab where state has slipped to 6th slot
in terms of per capita income and many industrial units relocated to neighboring
states due to tax and other lack of resources, the car market is still up and growing.
NRI money is also playing a role in giving rise to the luxury car market and easy
availability of back credits have also given a push to this growth.

9
ARTICLE 8-
Luxury car segment bucks slowdown trends; records stupendous
growth in 2008
Suhas Kadlaskar, (2009)

Mercedes Benz, among the well known luxury cars in the world, which sold
3,625 cars in India in 2008, has recorded a growth of over 45% over the previous
years. Punjab market sold 275 cars against 175 in the previous year, grew even
higher at 48 per cent. In fact, Northern region that among others includes Delhi is
ahead of other regions with 38 per cent of total sales. Punjab is a very important
market and dealers of luxury cars are aggressively looking at the region with new
product line. Especially Ludhiana has responded well to the Mercedes sales

ARTICLE 9-
BMW to ramp up dealership network in Punjab
B.B Goyal and Meghna Aggarwal, (2008)

German luxury car maker BMW plans to ramp up its network across the
country by year-end and penetrate into tier II cities like Ludhiana, jalandhar in
Punjab. The company would emerge as the No.1 seller of luxury cars in Punjab.
The company had sold 992 cars in the first quarter of 2009 all over the country.
BMW's global component sourcing from India is progressing. BMW has already
launched four new models this year with three more in the offing. These include
the petrol and diesel variants of its top-end sedan 7 series.

ARTICLE 10-

10
Volvo grows competitive to capture a bigger share of the luxury car
market in Punjab
Trilochan Mukherjee, Avinandan Sastry, (2009)

The expansion dealer network signals the importance of the Indian market to
Volvo Cars specially the purchasing strategies of people in Punjab. Punjab holds
tremendous potential for the brand and fully capitalizes on the opportunities
available while at the same time providing the best possible services for customers
at the best value at the most competitive prices. The Volvo, now a seven seated
with third row AC has been an ongoing success story ever since it was introduced
in Punjab. It provides luxury at right price.

ARTICLE 11-
Power Drives ; SUVS are the rich Punjabi’s passion; a sign of
machismo for those who work hard, play hard and spend big.
Ayesha Singh, (2010)

When it comes to luxury cars, Punjabis are in top gear. From them, it's not about
the money. It's all about living the opulent life, and exhibiting the machismo that
Punjabis are best known for. Punjabis love SUVs and the bigger they are, the more
powerful they are, the better it is. On Punjab's roads, it is common to see Porsche
Panameras, Audi Q7s, Land Rovers, Tuaregs and BMW X5s roar past in full
throttle. Welcome to the land of trend and testosterone- Punjab-where horsepower
has replaced the stallions of the warriors of yore

ARTICLE 12-
11
The cult of the luxury brand: inside Asia's love affair with luxury
Radha Chadha, Paul Husband,(2006)

Asia is an incredible growth market with every CEO in the world fully realizing its
huge potential for growth and profit. However, conquering marketers need to be
armed with genuine insights about the diverse Asian consumer. On average, luxury
goods consumption accounts for 4% of a consumer's assets in the world. There is
however a limited number of really rich people among Asia's luxury goods
enthusiasts. The Cult of the Luxury Brand examines the psychological makeup of a
generation which is prepared to rely on savings and overdrafts to fund their fetish
for the cult of the luxury brand

INTERPRETATION
Punjab has stood one of the bestsellers for the luxury cars sales The real-estate
boom in Punjab touched high and the landlords made quite good bucks by selling
their lands and the quick earned money played a role on spending on luxury cars
Ludhiana holds the tag of highest number of Mercedes and the number is growing.
Other premium models like Skoda and Corolla are also very popular brands in the
state. The research shows that despite the overall picture of economy growth in
Punjab where state has slipped to 6th slot in terms of per capita income and many
industrial units relocated to neighboring states due to tax and other lack of
resources, the car market is still up and growing. NRI money is also playing a role
in giving rise to the luxury car market and easy availability of back credits have
also given a push to this growth.

Punjab is always known for its culture and colorful traditional customs. The state
now seems to be the 'hot' market for cars and it is the luxury segment that is
scoring high compare to other class. In the present time, when the car industry is
facing hurdles due to global recession, it is enjoying good car sales in Punjab. The
demand and sales of premium cars has seen a good growth in Punjab. Yes it's true,
and the recent launch of all-new Ford Icon in Chandigarh also proves the aforesaid.
The people of Punjab have a great passion and love for cars. They are the true fans
12
of the latest technology, car features, and all elements that are present in luxury
cars. Interestingly, this state is gradually turning into a luxury car hub with the
increasing number of luxury car brands like BMW, Skoda, Audi, and Mercedes-
Benz. Looks like the present global crisis has not affected Punjab, as buyers are
still investing money to purchase their dream cars. The mode of payment is also a
factor that has not affected the prospective buyers in the state. Most of them make
solid payment without depending on any financial schemes. Punjab has given a
new vision to the car manufacturers amid the slowdown eventually boosting their
confidence and compelling big players to target the state for new car launches. But
only one state cannot bring a change to the huge car industry. The growth and
boom can only happen with the development and expansion of the sector in the
entire nation as whole.

REFRENCES
ARTICLE 1- Karan Kapoor, Sunil Sharma, (2008), Punjab emerges as a new market for cars,
Journal of India Standard Time.

ARTICLE 2- Hyun-Sook Lee and Beverlee B. Anderson, (2008), why world automobile
industry may move to Asia Pacific zone: the case of India's automobile industry, Journal of
World Review of Entrepreneurship, Management and Sustainable Development, Vol.4 no.1
pp.31-45

ARTICLE 3- S L Talwar, (2010), High demand for luxury cars in Punjab, Journal of Retailer
Retailer, Vol. 5 No. 8

ARTICLE 4- Swarleen kaur, (2008), Punjab consumers presses the peddle on high-end cars,
Journal of The Indian express

ARTICLE 5- Komal Amit Gera & Vijay C Roy, (2007), Luxury car market on the rise in
Punjab, Journal of Business standard

ARTICLE 6-Maheswaran Parameswarn, (2007), Luxury autos vroom into Punjab, Journal of
Economic times

ARTICLE 7- B. Bowonder, (2009), Punjab, bestseller for luxury cars in India, Journal of
International Journal of Management, Vol. 15 No.6-7 pp.646-680

ARTICLE 8-Suhas Kadlaskar, (2009), Luxury car segment bucks slowdown trends; records
stupendous growth in 2008, Journal of India retail business

13
ARTICLE 9- B.B Goyal and Meghna Aggarwal, (2008), BMW to ramp up dealership network
in Punjab, Journal of Indian management studies, Vol.12 pp.37-60

ARTICLE 10- Trilochan Mukherjee, Avinandan Sastry, (2009), Volvo grows competitive to
capture a bigger share of the luxury car market in Punjab, Journal of Indian Automotive
Industries, Vol.3 No.5pp.73-80

ARTICLE 11- Ayesha singh, (2010), Power drive ; SUVs are the rich Punjabi's passion; a sign
of machismo for those who work hard, play hard and spend big., Journal of India Today

ARTICLE 12- Radha Chada, Paul Husban, (2006), The cult of the luxury brand: inside Asia's
love affair with luxury, Jounal of Nicholas Brealey Publishing, Business & Economics, Vol.3
pp.227-229

14