“THE STUDY ON CONSUMERS PERCEPTION TOWARDS

LUXURY CAR SEGMENT”

A PROJECT SUBMITTED TO UNIVERSITY OF MUMBAI FOR PARTIAL

COMPLETION OF THE DEGREE OF

BACHELOR OF MANAGEMENT STUDIES

UNDER THE FACULTY OF COMMERCE

BY

AKSHATA BHANESH PAI

ROLL NO – 95

UNDER THE GUIDANCE OF

Ms. PARVEEN NAGPAL

M.L.DAHANUKAR COLLEGE OF COMMERCE

DIXIT ROAD, VILE PARLE (EAST),

MUMBAI – 400 057.

MARCH – 2020.

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 M.L. DAHANUKAR COLLEGE OF COMMERCE

Dixit Road, Vile Parle (E)

CERTIFICATE

This is to certify that Ms. Akshata Bhanesh Pai has worked and duly completed the
Project Work for the degree of Bachelor in Management Studies under the faculty of
commerce in the subject of project in Management Studies (Marketing) and her
project is entitled, “A STUDY ON CONSUMERS PERCEPTION TOWARDS
LUXURY CAR SEGMENT” under my supervision.

I further certify that the entire work has been done by the learner under my guidance
and that no part of it has been submitted previously for any degree of any university.

It is her own work and facts reported by her personal findings and investigations.

Date of Submission –

Ms. Parveen Nagpal Ms. Parveen Nagpal

(BMS Coordinator) (Internal guide)

External examiner Principal

ii
 DECLARATION

I, the undersigned Ms. Akshata Bhanesh Pai hereby, declare that the work
embodied in this project work titled “A STUDY ON CONSUMERS
PERCEPTION TOWARDS LUXURY CAR SEGMENT”, forms my own
contribution to the research work carried out under the guidance of Ms. Parveen
Nagpal is a result of my own research work and has not been previously submitted to
any other University for any other Degree to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Signature of Candidate

Ms. Akshata Pai

Certified by

Ms. Parveen Nagpal

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 ACKNOWLEGEMENT

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the UNIVERSITY OF MUMBAI for giving me

chance to do this project.

I would like to thank my Principal, DR. DNYANESHWAR M. DOKE for providing

the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator MS.PARVEEN NAGPAL, for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide

MS. PARVEEN NAGPAL whose guidance and care made the project successful.

I would like to thank my COLLEGE LIBRARY, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my

PARENTS AND PEERS who supported me throughout my project.

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 INDEX

SR.NO TOPICS PAGE NO.

1 INTRODUCTION
1.1 History 5–7
1.2 Characteristics 8–9
1.3 Growth of Luxury car sector 10
1.4 Reasons to buy a brand new Luxury car 11 – 14
1.5 Classification of Indian Luxury consumers 15
1.6 Pros and Cons of buying a Luxury car 16 – 18
1.7 Market Categories 19 – 23
1.8 Difference between Luxury & Premium cars 24 – 26
1.9 Deceleration of the Indian Market 27 – 28
1.10 The Psychology of Luxury car buyers 29 – 32
1.11 Global Financial crisis 33
1.12 Top Luxury car brands & their Parent company 34 – 36
1.13 Preowned/ used Luxury cars. 37 – 41
2 RESEARCH METHODOLOGY
2.1 Introduction to topic 42
2.2 Objectives of the study 43
2.3 Scope/Importance of the study 44 – 45
2.4 Research Methodology 46 – 49
2.4.1 Research Universe
2.4.2 Method of Sampling
2.4.3 Sample size
2.4.4 Method of data collection
2.4.4.1 Primary data
2.4.4.2 Secondary data
2.4.5 Method of Primary data collection
2.4.6 Method of Secondary data collection
2.4.7 Data analysis techniques
2.4.8 Limitations of the study
3 REVIEW OF LITERATURE 50 – 53
4 ANALYSIS & INTERPRETATION OF DATA 54 – 63
5 FINDINGS & CONCLUSION 64 – 66
6 BIBLIOGRAPHY 67 – 68
7 ANNEXURE 69 – 71

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 LIST OF TABLES

Sr no. Name of table Page no.

1 Gender 54
2 Age 55
3 Income group 56
4 Respondents owning Luxury cars. 57
5 How do the respondents know about 58
the Luxury car brands.
6 Reasons to purchase a Luxury car. 59
7 Features they look at before buying a 60
Luxury car.
8 Pricing of Luxury car. 61
9 Preferred Luxury brand. 62
10 Whether they would buy a Luxury car 63
or invest the money.

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 LIST OF GRAPHS

Sr no. Name of table Page no.

1 Percentage wise study of Gender. 54
2 Percentage wise study of age. 55
3 Percentage wise study of Income group. 56
4 Percentage wise study of respondents 57
owning Luxury cars.
5 Percentage wise study of how do the 58
respondents know about the Luxury car
brands.
6 Percentage wise study of reasons to 59
purchase a Luxury car.
7 Percentage wise study of features they 60
look at before buying a Luxury car.
8 Percentage wise study of pricing of 61
Luxury car.
9 Percentage wise study of preferred 62
Luxury brand.
10 Percentage wise study of whether they 63
would buy a Luxury car or invest the
money.

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 SUMMARY

The Luxury car market in India has registered a fair amount of growth in the last few
years and is growing at the rate of 25% per year. A Luxury car is a luxuriously styled
automobile which is designed to give the satisfaction and comfort to its owner. A
Luxury car typically has carrying capacity of 6 passengers. The Luxury car in the
Indian market are very expensive, with price tags that start from Rs.20 Lakh. Hence,
there are lot of such takers in the Indian automobile market. Almost every sector is
eyeing India as a potential investing hub, and automobile sector is no exception.

This study is particularly based in Mumbai, which is a financial capital as well as the
largest city in India. The Increase of disposable income of the people has led to
different lifestyle. Now the mindset of the Indian consumers is a lot different.
Previously, Indian consumers would check the prices of everything they bought.
Now, the consumer looks at the experience of the company during the buying process.
More than price, quality matters.

As luxury car manufacturers are launching multiple models with various price ranges,
along with user-friendly financing schemes, the demand for luxury cars is expected to
rise in the country. Moreover, the demand for luxury SUVs has been growing rapidly
in the country and is expected to continue during the forecast period, as they offer
extra space and comfort. Major luxury car manufacturers, like Audi, BMW, and
Mercedes are planning to launch new luxury models in the country at a competitive
prices.

Lower interest rates and good conditioned roads are some of the steps taken by the
Indian government which fuelled the demand for ultra-luxury cars in Indian market.
Still the study shows us that most of the people prefer to invest or save the money
rather than to purchase a Luxury car.

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ix
CHAPTER 1: INTRODUCTION

In economics, a luxury good is a good for which demand increases more than
proportionally as income rises, and is a contrast to a "necessity good", for which
demand increases proportionally less than income. Luxury goods are often
synonymous with superior goods and Veblen goods.

In India after independence, industrialization has paved the way for people to have
luxury items such as LCD’s, Smart phones, home appliances, and Luxury cars etc.,
The car market has recently undergone a phenomenal change with an entry of new car
model as a result of collaboration with different foreign car market. Though there are
many car manufacturing companies only a few are able to stand in the market and
earn profit and mostly the companies are not able to face the competition to remain in
the market. The reason is due to the entry of new International cars which contribute
to the luxury segment. So, I have developed an interest to study the reason behind
preferring some brands and also a very few research studies in Luxury car segment
are available. My sincere aspirations is to know the back ground of the Luxury car
industry in India and also which brand is dominated by the society in Mumbai is
studied.

If you’re in the market for a new vehicle, it can be difficult to determine exactly
which make and model is best for you. One word you may stumble across quite often
in your search is ‘luxury’, but what exactly does that mean for a vehicle? Contrary to
popular belief, luxury vehicles can come from any brand. In order to be considered a
luxury car, the vehicle must have high-end features that go above and beyond the
average necessities.

The term luxury is used to categorize vehicles that are equipped with better
performance capabilities, lavish interiors and all the latest safety and technology
features. In the past, certain brands such as Mercedes-Benz, BMW and Audi were
known as the luxury vehicles. However, nowadays there are luxury models available
for the mainstream brands such as Toyota and Honda.

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In India’s auto market, luxury cars are the fastest growing segment. In India, Luxury
car market has grown at an accelerated pace in the past couple of years. Research and
studies have revealed that the luxury car market is growing at a steady rate of 25% per
annum with more and more number of luxury cars entering the Indian car market.
India is one of the fastest growing economies of the World. With the consistent
growth rate of 8-9 % for the last five years the disposable income of Indians has been
growing in an impressive manner. Besides, the growth of HNI community in India is
crossing mark of 25%, the highest in the World. Because of these factors the Luxury
market of the World, which was centered around Europe, USA, Japan, China, and
Korea, so far, has started shifting its focus on India. Besides, traditionally, India has
always been known for her royalty. In this zest for Luxurious Lifestyle, both east and
west find this as an opportune time to make India as a hub for the Luxury market of
the World. Moreover, it is not only the luxury brands that are creating a benchmark in
the Indian industry but also the affluent class people who are keen to splash cash for
the cachet of exclusive cars. The impact of India's initiatives on economic
liberalization and globalization (post 1991) was most apparent in the automotive
sector. Moreover, the new age Indian was becoming more comfortable with his riches
and flagrant display of wealth, which ushered in opportunities for global luxury car
makers in India. Analysts estimate that the luxury car segment would be growing at a
rate of 28% annually. More than 7,000 luxury cars were sold in India every year and
nearly 20 global luxury brands were competing for the market share. The Indian
luxury car market has tripled its size in the past five years. It is expected to grow at
the same pace for 2-3 years. India being one of the lucrative hubs for the car market
which attracts auto majors from all over the world. The recent growth in the luxury
car market in India is much more than mere market dynamics in a particular car
segment. It is a reflection of the changing lifestyle of the affluent class in the country.
The Indian luxury car market accounts an impressive compound annual growth rate of
approximately 25% between 2005 and 2009, though the base still remains quite low,
representing around 1% of the total new car market. This expansion can be attributed
to high economic growth which led to increased disposable income, finance-friendly
government policies such as the relaxation of equity regulations and the reduction of
import tariffs 107 pertaining to the automobile industry. The economy was growing at

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7% per annum and the information technology revolution in India had created a
sizable professional class with huge purchasing power.

MEANING OF LUXURY AUTOMOBILE:

Luxury vehicle is a marketing term for a vehicle that provides luxury — pleasant or
desirable features beyond strict necessity — at increased expense. The term suggests a
vehicle with higher quality equipment, better performance, more precise construction,
comfort, higher design, technologically innovative modern, or features that convey an
image, brand, status, or prestige, or any other 'discretionary' feature or combination of
them. Luxury is relative, "what may be luxury for one may be premium for another."

In contemporary usage, the term may be applied to any vehicle type including sedan,
coupe, hatchback, station wagon, and convertible body styles, as well as to mini-vans,
crossovers, or sport and to any size vehicle, from small to large in any price range.
Moreover, there is a convergence in the markets and a resulting confusion of luxury
with high price: where there may have been a clear difference in price between luxury
and others, there is no longer an absolute separation between premium and luxury,
with what may be premium brands now more expensive than the equivalent so-called
luxury ones.

Automobile manufacturers market specific makes and models that are targeted at
particular socio-economic classes, and thus "social status came to be associated more
with a particular vehicle than ownership of a car per se." Therefore, automakers
differentiate among their product lines in ‘collusion’ with the car-buying public.
While a high price is the most frequent factor, it is ‘styling, engineering, and even
public opinion that cars had the highest and lowest status associated with them’.

Automobile history in every era has had ‘a group of car marquees and models that
have been expensive to purchase, due to their alleged superiority of their design and

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engineering’. Aimed at wealthy buyers, such automobiles might be generically be
termed luxury cars.’ This term is also used for unique vehicles produced during’ an
era when luxury was individualistic consideration and coachwork could be tailored to
an owner like a bespoke suit’. Although there is a considerable literature about 108
specific marquees, there is a lack of systematic and scholarly work that ‘analyses the
luxury car phenomenon itself’.

Luxury vehicle makers may either be stand-alone companies in their own right, such
as BMW and Mercedes, or a division/subsidiary of a mass market automaker (e.g.,
Lexus belongs to Toyota). Badge engineering may often be used for economical cost
savings, such as most Lincoln vehicles being based on Ford. Though widely used, the
term luxury is broad and highly variable. It is a perceptual, conditional and subjective
attribute and may be understood differently by different people; ‘what is a luxury car
to some... may be ‘ordinary’ to others’.

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1.1 HISTORY:

European manufacturers-

Prior to World War II, a wide array of European producers made luxury cars,
including Rolls-Royce, Bugatti, Delage, Delahaye, Talbot-Lago, Bentley and Isotta
Fraschini, Aston Martin, Maybach.

France was a leading producer of powerful luxury automobiles prior to World War
II. After World War II, the French government used puissance fiscale tax regulations
to encourage manufacturers to build cars with small engines, and French motorists to
buy them. The Maserati-powered Citroën SM and the Citroën C6 were arguably the
last domestic French luxury cars. In the 2010s, some French manufacturers have
attempted to develop luxury cars, however the lack of a historical legacy has
hindered these efforts. In 2014, Citroën introduced DS Automobiles subbrand to
market luxury cars.

Following World War II, Germany rose to become an export powerhouse, building on
success with the Mercedes-Benz brand, later joined by BMW, which now owns
RollsRoyce Motor Cars, and Volkswagen, which now owns Audi, Bentley, and
Lamborghini.

In the Soviet Union, the manufacturer ZiL (then called Zis) began producing
limousines in the mid-1930s and GAZ and joined the luxury car market in the early
1950s.

North American manufacturers-

The luxury car phenomenon began the start of the automobile industry when the
wealthy frequently invested in the manufacture of such models to gain the social
prestige associated thereby. Emphasis was also placed on custom built coachwork.
The 1920s and 1930s were the apogee of production of these very large luxury

5
automobiles from many manufacturers. The significant North Americans
manufacturers from 1910-1940

were Cadillac, Chrysler, Cord, Duesenberg, Lincoln, Packard, Pierce

Arrow and Stutz. Most of them had a straight-eight, V8, V12, or V16 engine. The
Great Depression put many luxury car brands out of business; others would hold on
before folding during the post war era.

From 1946 to the late 1990s, Cadillac was the highest selling brand of luxury cars in
the U.S. and Lincoln was the second-highest. The most successful and long-running
model names during this era were the Cadillac Deville and Lincoln Continental.
The personal luxury car is an America-specific category of popularly-priced cars
made from the 1950s by the four domestic manufacturers (GM, Ford, Chrysler, and
AMC) that reached peak popularity in the 1970s. The cars were stylized, mass
produced two-door coupés or convertibles, relying on standard components. These
distinctively styled cars were targeting the needs of individual customers, not an
entire family. The longest running model lines were the 1958-1997 Ford
Thunderbird and the 1967-2002 Cadillac Eldorado.

In 1990, American luxury brands dominated with Cadillac selling over a quarter
million cars and Lincoln had its best year ever at 231,660 units. However, the market
was changing with an ever greater acceptance of smaller, more efficient imported
luxury brands while at the same time the domestic manufacturers were downsizing
their models with product decisions that backfired on quality and brand respect.

Since the late 1990s, Japanese and German brands have sold the most luxury-type
cars in the United States. However the Cadillac Escalade has led the luxury SUV
segment sales in the United States since its introduction in 1998, with the highest
sales for 15 out of its first 20 years on the market.

In the 2000s, both Ford and General Motors produced luxury pickups: the 20022013
Cadillac Escalade EXT, 2002-2003 Lincoln Blackwood and 2006-2014 Lincoln
Mark LT.

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In the late 2000s, the Cadillac CTS and Cadillac DTS led to a resurgence in the
brand's luxury sedans. The equivalent sedan from the Ford group, the 2008 Lincoln
MKS, was also regarded as a significant improvement over previous models. In 2010,
BMW was the best-selling luxury vehicle manufacturer by sales, with Audi and
Mercedes-Benz the second and third highest selling luxury brands.

Asian manufacturers-

Chinese manufacturer Hongqi was launched in 1958, making it the oldest Chinese
luxury car marque.

Japanese manufacturers have been producing luxury cars since the 1950s, including
the Toyota Crown (1955–present), Prince/Nissan Gloria (1959–2004), Nissan
Cedric (1960–2015), Mitsubishi Debonair (1964–1998), Nissan President (1965–
2010), Toyota Century (1967–present), Mazda Luce/929 (1969–1991) and Honda
Legend (1985–present).

Since the 1980s, overseas sales of Japanese luxury cars have increased, challenging
the traditional European luxury brands.

Several Asian manufacturers have created sub-brands for the marketing of luxury
cars. The first of these was the 1986 launch of Acura (a Honda sub-brand), followed
by Lexus (Toyota) in 1989, Infiniti (Nissan) in 1989 and Genesis (Hyundai) in 2015.

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1.2 CHARACTERISTICS OF A LUXURY CAR:

Luxury cars tend to offer a higher degree of comfort than their mainstream
counterparts, common amenities include genuine leather upholstery and polished
"woodgrain-look" dashboards. Compared to mainstream vehicles, luxury cars have
traditionally emphasized comfort and safety. Luxury vehicles are also a status symbol
for conspicuous consumption. Contemporary luxury cars also offer higher
performance and better handling, which is often known as sport. However, in Europe,
where large-displacement engines are often heavily taxed and many luxury buyers shy
away from conspicuous consumption, brands offer buyers the option of removing
exterior engine-identifying badges. Forbes noted that the reputation of luxury
marquees enables them to continually introduce many new safety technologies and
comfort amenities, such as anti-lock brakes, electronic stability and DVD
entertainment systems, before they trickle down to mass market cars. Numerous
‘smart car’ features are largely only found on luxury cars as of 2009.The rear-wheel
drive with longitudinal engines (FR) is a common layout of luxury of luxury cars.

European marquees like Mercedes-Benz, BMW, and Jaguar have almost never
adopted front-drive and retained a lineup mostly or entirely made up of FR cars.
Japanese brands such as Lexus and Infiniti also have predominantly FR lineups. The
FR layout, while more expensive than the FF, has been retained by these luxury
manufacturers as it allows for higher performance engines (particularly the straight6,
V8, and other engine configurations with more cylinders), better handling, and a
smoother ride. American manufacturers also largely followed the FR for their luxury
brands (as well as their mass-market cars of the time). However, due to the 117 Arab
Oil Embargo of 1973 and the 1979 fuel crises began eliminating their FR platforms in
favor of the more economical front wheel drive transverse engine layout (FF).
Chrysler went 100% FF by 1990 and GM's Cadillac and Buick brands for the US
were entirely FF by 1997. One of the few notable holdouts was Ford's Lincoln Town
Car and Lincoln LS. In the 21th century, as part of the revamp of its design and
image, Cadillac did return most of its lineup (sedans, roadsters, crossovers and SUVs)

8
to have rear- and all-wheel-drive, the only exceptions being the frontwheel drive
Cadillac BLS (which is not sold in North America) and the Cadillac DTS. Chrysler
returned its full-size cars to this layout with the Chrysler 300. Ford’s Lincoln retained
the longtime FR platform for the Town Car, intended for use as a limousine and
chauffeured car, but newer offerings such as the MKZ and MKS will use newer FF
platforms shared with mainstream Ford vehicles, with all-wheel drive as an option.

WHAT MAKES A LUXURY CAR – LUXURY?

There is no certain vehicle type when it comes to luxury vehicles. Drivers can find
luxury vehicles in all categories including sedans, hatchbacks, crossovers, SUVs and
even minivans. It doesn’t necessarily matter how much the vehicle costs either, which
is where this tricky. What it comes down to is that even if an automaker considers a
certain model to be a luxury vehicle, that doesn’t mean all drivers will agree. What it
comes down to is that there is no clear definition of what makes a luxury vehicle,
luxury. It’s mostly in the eye of the beholder, but there are still those wellknown
brands that hold on to the luxury definition even as it changes through the years.
Some features that are considered to be ‘luxury' are as follows:

• Heated steering wheel

• Integrated seat massagers

• Water-resistant windows

• Automatic safety features

• Entertainment systems

These are just a few features that come to mind when we think of what defines a
luxury vehicle. Of course these features don’t automatically make a vehicle luxury,
but it’s a step in that direction.

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1.3 GROWTH OF LUXURY CAR SECTOR:

India, the world’s second-fastest growing auto market is in top-gear growth. The
country is a hot destination for luxury car manufacturers due to its robust economic
growth, favourable demographics, higher disposable income, changing lifestyle and
positive industrial ecosystem. India is expected to become the third biggest automaker
in the world in the next decade.

The various reasons for the growth of luxury cars in India:

• The economy is rising in the country which has given the people more
disposable income which they are spending in buying luxury cars.
• With the IT boom in the country many youngsters are earning high pay
packages which enable them to buy luxury cars. This further gave boost to
market of luxury cars in India.
• Various loan schemes have been launched by automobile manufacturers and
the financial institutions. This has made it very easy for the people to buy
luxury cars and this has boosted the luxury car market in India.
• The government has formulated many policies such as the relaxation of equity
regulations and the reduction of import tariffs pertaining to the automobile
industry. They have helped to reduce the prices of the luxury car, which in
turn have led to the growth of the luxury car market in India.

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1.4 7 REASONS TO BUY A BRAND-NEW LUXURY CAR:

Although, the luxury car industry has a selective target audience, the engineers of the
imported car companies are determined to convince a certain class of people about the
worthiness of buying these grandeur automobiles.

It’s understood that the luxury car market segment is not for the masses, only the ones
who can afford them get to enjoy the superior drive. The luxury car automakers have
a rich experience in making cars with solid engineering, performance and quality.

Luxury vehicles not only come with high price tags but also with many added benefits
that are mentioned below:

1. Better driving experience

A luxury car elevates the driving experience to another level altogether that a standard
car can’t even reach near to. The state of the art interior, smooth engine, comfortable
leather seats, a smooth steering and the strong road grip of the luxury car makes it a
top of the line option which not everyone can afford.

The old phrase,’ you get what you pay for’, perfectly depicts a luxury car’s cost. You
might be paying extra, but the added benefits justify each dollar you paid for the
vehicle.

2. Quality

The luxury cars are built to last, unlike the average cars. It is a known fact that even a
used and old luxury car will perform better than a new average or even an
aboveaverage car.

The reason behind this is crystal clear; a normal car may have its manufacturer’s
compromise on a lot of things in order to manufacture and sell it at an economical
price. However, while manufacturing a luxury car, this is not the case. Their engineers

11
make sure they built the car that truly delivers an amazing driving experience without
compromising on its elegant look.

When you buy a European brand car like Mercedes-Benz, Audi, Porsche, BMW and
Lamborghini, you are not just buying an expensive car, you are associating yourself
with a brand with millions of satisfied customers.

3. Resale value and investment

The luxury auto repair in Grapevine, TX states that the resale value of a car
depends on the following factors:

• Brand name

• Regional demand

• Safety and power features

• Type of transmission: auto or manual

Brand name determines the resale value of the car; it is directly responsible for
whether the price will depreciate or increase in terms of value. Every luxury car brand
name, guarantees a high resale value because the name speaks for its quality and
service.

There might be no part in the world where people don’t crave for a luxury car. A
certain brand may be preferred over another, but the resale value is usually high.

A car with extra features always sells at a better price and it is a known fact that
luxury car brands are the pioneers who introduced these features in their cars. As per
the luxury auto repairs in Grapevine, TX imported cars have a lot more additional
features that make them highly profitable while selling.

Buying a luxury car is actually an investment which gives benefits in the longer run.
Value of the rare model of an imported car may even increase and it may get sold at a
significantly higher price than its original one.

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4. Prestige

Apparently, owning a luxury car will uplift your status in your social circle. You will
be perceived as a powerful and influential person depending upon the luxury car you
drive. The prestige and respect that imported and luxury cars provide are unparalleled.

A car says a lot about the person who drives it. In other words, a luxury car is your
style statement just like the clothes and accessories you wear. A better car can
substantially add to your personality which can be beneficial for your business.

The luxury auto repairs in Grapevine, TX, have witnessed people doing better
business all the while driving a luxury car—is it just a coincidence? We think not!

5. The latest technology

Additional technological features are increasingly becoming common in luxurious

cars. New features include: innovative parking assist, 4RM four-wheel steering
package, Porsche’s 4D-Chassis Control system and many others. All these features
guarantee a great driving experience.

As per the luxury auto repairs in Grapevine, TX, luxury cars have always featured the
latest technological advancements years before they are introduced in the average car.

6. Safety features

Luxury cars are known to be safer than the average cars because they are equipped
with some of the advanced features that ensure your safety to a large extent.

According to the luxury auto repairs in Grapevine, TX safety components of a

highend luxury car will definitely amaze you. Some of the safety features include:
blind spot warning systems, anti-lock brake systems, auto lane keeping and curtain
airbags.
All these features promise you a safe and secure drive.

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7. Elegant interior design

Driving a luxury car is more than just good, it’s an experience that can’t be described
but only felt. From the comfortable leather seats to the sound system, the interior of
an imported car transcends you into a different zone.

Designers of the car have made sure that you enjoy every touch point of the car. By
driving a luxury car, you will realize that you were missing on several functions in
your average car.

Driving a luxury car is just not a vehicle; it’s an experience of a lifetime!

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1.5 CLASSIFICATION OF THE INDIAN LUXURY CONSUMERS:

SRI Consulting Business Intelligence segments consumers into 3 different categories

according to what luxury means to them:

Functional – These consumers buy the luxury goods for their superior functionality
and high quality. The consumers in this segment are the largest of the three groups
and they are older and wealthier. They are willing to buy the things which will be
long lasting and will have enduring value. The decisions that they make are logical
rather than emotional. They are product quality and information sensitive when
considering purchase of luxury items.

Rewarding – The consumers in this segment are younger than the first group but are
older than the third one. For them luxury goods are a symbol of status, to show to the
world they have arrived. They are motivated by their desire to succeed and they
demonstrate by the goods that they buy. So the decision of buying a luxury item is
more of emotional rather than logical. They go for the best goods available to show
that they are the best and they like the best. They buy luxury for the way it makes
them seem in front of others so rationality in the decision making is not much present.
They would go more for the goods which showcase exclusivity.

Indulgence – This is the youngest of the group and they are the smallest in number.
There are slightly more males in this segment compared to the other segments. They
buy goods because they want to indulge lavishly. They are ready to pay premium for
the fact that the luxury item will give them a sense of individuality and are not
concerned with the problem of quality or enduring value. They buy the goods because
of how it makes them feel and thus the decision to buy will be an emotional one and
not a rational one. So they respond well to the brands which showcase unique and
emotional qualities. The above segmentation was regarding the reasons for the buying
of luxury cars.

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1.6 THE PROS AND CONS OF BUYING A LUXURY CAR:

There no denying the fact that buying a luxury car is one of the pinnacle symbols of
success.

Regardless of whether you’re into sedans or SUVs, everyone knows that the
manufacturer mark on the hood of the car and written across the trunk is what really
matters.

Symbolism aside, luxury cars come stocked to the brim with fancy features and
highspeed engines that make them even more appealing to sports car lovers and sleek
aesthetic seekers. As each year passes, the bar for cutting edge luxury vehicles is set
higher and higher—and the prices show.

There are plenty of upsides and downsides to the splurge worth exploring before
chasing your dream car.

Pro: World-leading performance

Upscale vehicle manufacturers like Mercedes, Tesla, and Audi are popular for a
reason. Not only do these cars look beautiful on the inside and outside, but they
perform better than most low-end vehicles on the market.

Even with used models, you’ll find that a 2020 Mercedes-Benz comes with plenty
more horsepower than a 2020 Toyota with a similar build.

Engine performance and body design are truly the defining factors of a luxury car,
and upscale brands deliver above and beyond on the high-tech expectations
consumers have for them year after year.

16
Con: Price

The cost of an upscale car can be hard to fork over, especially when tens to hundreds
of thousands of dollars are on the line.

For example. The gorgeous BMW M850i x Drive Coupe starts at a hefty $111,900.
Unless you’re completely dripping in money with fruitful income to cover the price
tag damage, you’ll have to modify your budget so you can continue living your cushy
lifestyle without going into debt.

But that’s the price you pay for beauty… and speed, horsepower, leather interiors, and
concert-hall quality sound systems.

Even used luxury cars tend to carry heftier prices than their lower-end counterparts.
It’s not uncommon to find a 2012 Lexus that costs more than a 2019 Honda.

Depending on make and model, some luxury cars depreciate slower while others
riddled with past issues depreciate fast.

Do some diligent research on your desired vehicle before handing over any lump
sums of cash—a big purchase like a luxury car deserves careful consideration and
justification.

Pro: You can buy used luxury

Bargain hunters looking to fulfill their dreams of luxury car living can turn their
fantasies into a reality with a used luxury car.

One of the most significant perks of buying used luxury is that you still get every
ounce of high-powered performance you want, the upscale interior you expect, and
the fancy hood ornament you can’t wait to brag about.

Buying used luxury does not necessarily mean you’ll save on maintenance costs, but
you will save thousands on the cost of the actual car.

17
Con: Selling is tough

As mentioned before, luxury cars may not feel the wrath of car depreciation as
quickly as your run of the mill Honda or Kia might, but it is a simple matter of fact
that all cars depreciate.

No matter how many bells and whistles your car has, the newer model will almost
always be worth more. Fortunately, there will always be a market full of people after
used luxury cars—if you’re on the hunt yourself, you’re living proof!

There are plenty of car dealerships out there who will take your luxury vehicle off you
for resale, but the problem of harshly knocked-down resale prices can scare car
owners looking to sell away.

Make sure you know your car’s value from the mileage to the condition of the engine
for an adequate sale both the seller and buyer can be happy with.

Pro: Safety

Above all else, when you’re searching for a new or used vehicle, you need it do the
absolute bare minimum before getting into classier specs. Yes, it can get you from
point A to point B, but can it do so safely?

With luxury cars, the answer is usually yes. While manufacturers do spend plenty of
time engineering your favorite BMWs and Jaguars to be flashy and sporty, they are
equally concerned about the safety of the passengers who end up inside of their
creations.

Upscale cars tend to be equipped with a full set of airbags, traction control, and
reliable ABS. You can rest assured that your pricy purchase will protect you against
the odds.

Just like any other car purchase, there is plenty to consider when buying a luxury car.
Always be sure to do your research and go for a few test drives before handing over
the many wads of cash you’ll need for a proper upscale pay-out!

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1.7 MARKET CATEGORIES:

Premium compact / entry-level luxury-

The premium compact class is the category of the smallest luxury cars. It became
popular in the mid-2000s, when European manufacturers— such as Audi, BMW, and
Mercedes-Benz— introduced new entry-level models that were smaller and cheaper
than their compact executive models.

Examples include the Acura ILX, Mini Clubman ,Alfa Romeo Giulietta, Audi
A3, Mercedes GLA, Mini Countryman, Audi Q3, BMW X2, Buick Verano, BMW 1
Series, BMW 2 Series, Lexus CT 200h, Infiniti Q30, Mercedes-Benz AClass,
Mercedes-Benz B-Class, Volvo C30, Volvo V40 and BMW i3. Premium compacts
compete with well-equipped mid-size cars, and highly optioned premium compact
cars can have pricing and features that overlaps with compact executive cars.

Mercedes-Benz-A class Infinity Q30

(2015–2019) (2018–present)

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 Compact executive / compact luxury -

A compact executive car is a premium car smaller than an executive car. In European
classification, compact executive cars are part of the D-segment. In North American
terms, close equivalents are "compact premium car", "compact luxury car",[29]
"entrylevel luxury car" and "near-luxury car".

Alfa Romeo Giulia Tesla Model 3

(2018–present) (2015–present)

Executive / mid-size luxury -

Executive car is a British term for an automobile larger than a large family car. In
official use, the term is adopted by Euro NCAP, a European organization founded to
test for car safety. It is a passenger car classification defined by the European
Commission.

Genesis G80 (2016–present)

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Luxury saloon / full-size luxury sedan -

The next category of luxury cars is known in Great Britain as a luxury saloon or
luxury limousine, and is known in the United States as a full-size luxury sedan,
large luxury sedan or flagship sedan. It is the equivalent of the European
Fsegment and German Oberklasse segment.

Many of these luxury saloons are the flagship for the marque and therefore include the
newest automotive technology. Several models are available in long-wheelbase
versions, which provide additional rear legroom and often a higher level of standard
features.

Examples of luxury saloons / full-size luxury sedans include the BMW 7 Series,
Cadillac CT6 Genesis G90, Mercedes-Benz S-Class, Lexus LS and Porsche
Panamera.

Mercedes-Benz W222 S-Class BMW M760Li xDrive

(2015–present) (2013–present)

Ultra-luxury -

Luxury cars costing over US$100,000 (as of 2007) can be considered as "ultra-luxury
cars". Examples include the Rolls-Royce Phantom, Maybach 57, Bentley Arnage, and
Toyota Century. High-end sports cars which are targeted towards performance rather
than luxury are not usually classified as ultra-luxury cars, even when their cost is
greater than US$100,000. The history of a brand and the exclusivity of a particular

21
model can result in price premiums compared to luxury cars with similar features
from less prestigious manufacturers.

Rolls-Royce Phantom VII

2017)
(2012–

Luxury SUV/Crossover -

Long before the luxury SUV segment became popular in the 1990s, the vehicle in this
segment was the 1966 Jeep Super Wagoneer, which was marketed at the time as a
station wagon. It was the first off-road SUV to offer a V8 engine, automatic
transmission, and luxury car trim and equipment.[51] Standard equipment included
bucket seating, a center console, air conditioning, seven-position tilt steering wheel, a
vinyl roof and gold colored trim panels on the body sides and tailgate. By the late
1970s, optional equipment included an electric sunroof, The 1978 Jeep Wagoneer
Limited was the spiritual successor to the Super Wagoneer and was the first
fourwheel drive car to use leather upholstery.

Another precursor to the luxury SUV is the Range Rover, which was released in 1970.
It was the first road-going vehicle to have a permanent four-wheel drive system, split
tailgate, clamshell bonnet and continuous waistline (in the same vehicle). The Range
Rover had long-travel coil spring suspension and an aluminium V8 engine.
Development of the Range Rover began in 1951.

In the mid-1990s, the SUV market expanded with new entrants. By the mid-1990s,
the entry-level Ford Explorer and upscale Jeep Grand Cherokee were the market
leaders for SUVs. The fastest growing sector of this market was for the so-called

22
luxury SUVs, which included the Jeep Grand Cherokee ... the Grand Cherokee's
allure: "This vehicle is proof you can have a true off-road vehicle without giving up
luxuries and amenities" with the Jeep providing a crucial new intangible factor for
buyers—image.

The SUV models generated higher profit-margins than passenger cars, and car
manufacturers began introducing new luxury SUVs during the late 1990s. SUVs
such as the 1995 Lexus LX, 1997 Mercedes-Benz M-Class and 1998 Lincoln
Navigator were the first SUVs produced by these luxury car brands. Some of these
early luxury SUV models used a unibody construction, becoming part of the trend
moving away from the body-on-frame construction traditionally used by off-road
vehicles.

Crossover SUVs became increasingly popular in the mid-2000s, and manufacturers

also began to produce luxury versions of crossovers. The Lexus RX was the earliest
luxury crossover on the market, and it has since been the best-selling luxury vehicle in
the US. Some luxury crossovers are built on a platform shared with sedans or
hatchbacks, for example the Infiniti FX is based upon the same platform as the
Infinite G35 sedans and coupes. While early luxury crossovers released in the late
1990s have resembled traditional boxy SUVs, later crossovers, such as the Infiniti
FX and BMW X6, have been designed with a sporting appearance.

Jeep Wagoneer Lincoln Navigator

(1986–1991 model shown) (2018–present model shown) luxury SUV

23
1.8 DIFFERENCE BETWEEN LUXURY AND PREMIUM CARS:

The automotive industry isn’t as black and white as it used to be. In the past there
were two basic types of cars, luxury and affordable, but times have changed. Over the
last decade or so, there has been a growth in the “premium” car and truck category.
The premium and a luxury categories are similar but there are a few distinct
characteristics of both types of vehicles.

Similarities

The biggest similarities are in technology and safety features. Premium and luxury
vehicles are generally equipped with the most up-to-date and highest level technology
and safety features that are not standard in all cars. These tech features include larger
touchscreens, preventative safety tech and an array of cameras.

Additionally, luxury and premium cars typically have high-end materials and finishes
on the interior and exterior of the car. High end interior elements include leather
seating, leather wrapped steering wheel, heated seating, ventilated seating and name
brand stereo equipment. The exterior features generally include bigger and better
quality wheels, name brand tires, a sunroof if available, tinted windows and window
shades.

Differences

So, you may be wondering if these two types of vehicles are so similar what are the
differences? Well, the biggest difference is usually all luxury brand cars like
Mercedes or BMW come standard with luxury features. Whereas premium cars tend
to just be the highest trim level of a particular model. For example Chrysler 300
Limited is the base trim and the Chrysler 300C Platinum is the premium car trim. The
premium car trim has all of the bells and whistles and is packed with name brand
products, the base trim may have some of those things.

24
Another huge difference is value v. status. Premium cars are generally not as well
perceived when it comes to status. For example, someone who drives a Lexus has a
certain status or image of wealth, whereas someone who drives the premium version
of the Kia Optima (Overland) is just seen as someone with an Optima. To some the
status and name brand is worth the value, whereas others just want the features at a
lower cost. This is the difference between a $50,000 vehicle and an $80,000+ vehicle.

3 Main Differences between Luxury and Standard Cars:

Auto buyers have a number of choices available when they’re shopping for new or
pre-owned cars. Not only can you choose from the various makes and models, but
you also have to decide between a luxury model or a standard model. The main
differences between the two options aren’t always easy to spot, but there are some
pretty major aspects that make the two classes of vehicles different from one another.

High-End Features -

If you need your car to have the best and most comfortable features, shop the luxury
section. Most luxury cars include features like leather upholstery, premium sound
systems, heated front seats, multi-zone automatic climate control, ambient interior
lighting, and LED or xenon exterior lighting. While you can typically find these
highend features on standard cars, they will usually come with a higher price tag. You
may even have to opt for the highest trim level to get leather upholstery or heated
front seats, which could be a difference of several thousand dollars.

Many luxury automobiles also come with better tech features that make your car more
enjoyable to drive. A premium sound system with more speakers is commonly found
in a luxury car, as are Bluetooth connectivity, satellite and HD radio, voice controls,
and navigation. It is rare to see a luxury car that doesn’t include an oversized touch
screen display, and most vehicles pair the screen with some type of infotainment
system.

25
Safety Features -

While some of the premium features that come standard on a luxury car might seem
confusing, and you may think you don’t need or want them, the high-end safety
features are definitely worth a second look. Most newer luxury models come standard
with features like blind spot monitoring, which gives you a visual cue that a car is in
or approaching your blind spot, as well as an audible alert when you signal and a car
is in that blind spot. Rear cross traffic alert is another great feature, which warns you
that a car is passing behind your car when you’re in reverse.

One of the systems that is a proven lifesaving option is a collision warning system
with automatic emergency braking, something that typically is a standard feature or
available as an option on a luxury car. This system uses a camera to detect the speeds
of cars ahead and warns you if you’re approaching too quickly to a car that is stopped
or slowing down. With automatic emergency braking, the system will stop your car if
you don’t have enough time to react, something that could dramatically diminish the
damage that occurs if you do get into an accident or even prevent it completely.

Price -

Another difference between luxury and standard cars is the price tag. Luxury cars
come with better features, so they’re obviously more expensive, but when you
compare a single-trim luxury model with the top trim level on a standard car, you may
find that the cost difference isn’t that significant.

Take a luxury vehicle for a test drive and see just how nice it is to have the features
you didn’t know you needed or wanted. You may be surprised to see that a luxury car
fits into your budget more easily than expected.

26
 1.9 DECELERATION IN THE INDIAN MARKET, IN THE
HISTORY OF LUXURY CARS:

MUMBAI|NEW DELHI: Hit from all corners, the Indian luxury car market is
expected to post its first ever decline in 2016 since Mercedes Benz officially started
selling in India in 1994. Mercedes Benz India managing director Roland Folger said
2016 has been the toughest year for the luxury car industry in a while. He thinks it
would be unrealistic to hope that last year’s numbers can be achieved.

First, there was the 2-litre diesel vehicle ban in the National Capital Region that
accounts for almost a fourth of the market, followed by a 1 per cent extra tax in the
Budget, an infrastructure cess of 1 per cent and finally demonetisation. All this has
meant that the top two luxury car makers, Mercedes Benz and Audi, which account
for 60 per cent of the market, are likely to post flat numbers or declines for 2016.

The other key players—BMW, Jaguar Land Rover and Volvo—are likely to post
moderate growth. Overall, the market is seen declining 2-3 per cent in 2016 to 35,000
units from 36,000 units in 2015. Mercedes Benz India had forecast 20 per cent growth
in 2016 after registering a healthy 30 per cent growth in 2015.

"Till August we had the diesel ban crippling our sales in the key Delhi NCR market
and since November we have the short-term effect of demonetisation in addition to
the additional cess levied on luxury cars," said Folger. "These factors have negatively
affected the customer sentiment, resulting in lesser footfalls and enquiries at the
dealerships."

The bigger loser in volume and market share has been Volkswagen Group-owned
Audi, which saw some challenges on diesel vehicle recalls besides availability of
diesel engines in new vehicles. Audi is estimated to post a drop of over 20 per cent to
8,500 units, which the likes of BMW, Volvo and JLR have taken advantage of.

27
BMW India, declining since 2012, bounced back in the first nine months of 2016,
registering growth of 20 per cent. The demonetisation effect may subdue this to 10
per cent, with JLR and Volvo registering similar growth rates on a lower base.
"Demonetisation will impact consumer sentiments and our business in the immediate
future," said Frank Schroeder, acting president, BMW India. "Consumer sentiments
are expected to stabilize and business to resume normal pace over the next few
months...

(However) from a long-term perspective, demonetisation will be beneficial for doing

business in India." After a tepid first half, luxury car makers had been expecting
demand to take off with the festive season. However, demonetisation soon after that
hit enquiries and footfalls across brands, segments and markets.

For most, footfalls have dropped as much as 50 per cent over the past month with
customers deferring purchase decisions over uncertainties in the economic situation.
The sharp drop in demand after a lacklustre year has made most companies revise
their growth targets downwards for 2016.

Volvo Auto India too, which was earlier expecting to grow 25 per cent to 1,750 units
in 2016, has reined in its growth target for the year. Volvo’s growth has been steered
by new launches, the XC90 and the S90. "The expected growth was more than the
possible 10 per cent we will grow this year," said Tom Von Bonsdorff, managing
director, Volvo Auto India.

Going ahead, vehicle manufacturers are optimistic. Mercedes Benz is confident of the
mid to long-term potential of the Indian market and will aim for double-digit growth
in the coming year. Volvo is aiming at cornering a segment share of 10 per cent by
2020 and expects a steady 20 per cent compounded annual growth rate.

28
 1.10 THE PSYCHOLOGY OF LUXURY CAR BUYERS: 7
CONSIDERATIONS

The luxury car market accounts for 6 percent of automobile sales in the United States,
resulting in a small but highly lucrative segment. Companies looking to increase their
luxury vehicle sales at auto shows need to understand the factors that drive luxury car
buyers in this sector. This information gives live marketers the insight they need to
create customized messaging capable of converting luxury buyers.

Perceived Value:

Luxury brands have a higher perceived value compared to other companies.

Consumers are willing to pay higher prices for a vehicle when they feel that the price
reflects the value that they're getting in return. Some luxury vehicles are functionally
identical to lower-priced models, but the details and the way the car is positioned
makes the difference.

Effective marketing can elevate a vehicle brand's perceived value and make it more
desirable for luxury buyers looking to maximize their investment in an automobile
purchase.

Status Symbol:

A luxury car can act as a status symbol for the buyer. Companies that want to convey
they are successful may have employees drive around in luxury vehicles when they
visit client sites. A common story surrounding luxury vehicle purchasing is the
midlife crisis. The customer wants a new, high-class car to represent a change of pace
in their life or to show that they've reached a personal milestone.

According to a study published in The Journal of Marketing, there are two different
types of motivations that drive consumers to purchase goods, including vehicles.
These two motivations are hedonic and utilitarian. Whereas utilitarian motivations are
more focused on positioning the consumer as smart and responsible, hedonic

29
motivations are more focused on self-promotion, and elevating them to a higher class
on the social scale.

Thus, those who buy luxury cars more likely crave social status and material wealth,
as opposed to utilitarian cars which consumers buy out of necessity.

The luxury car company needs to maintain their brand reputation and quality to attract
these customers. They pay close attention to how people react to the company and
may stay away from vehicles that come from businesses that don't align with their
personal or professional values.

Self-esteem:

Some people gravitate towards luxury brands as a way to boost their self-esteem. This
factor may crossover with other purchase influencers, such as wanting a status symbol
to increase confidence. This phenomenon is called compensatory consumption. The
action may occur due to psychological threats or negative life events that impact the
person's ego.

The marketing messages for approaching this market segment should focus on
the emotional impact of owning a luxury vehicle. When marketers can make this
connection at an auto show, they can show the buyer that they're capable of
fulfilling the customer's self-esteem goals.

Passion:

Car enthusiasts love automobiles as part of their hobby, so they have a strong
attachment to brands that offer unique experiences or top-level performance. They're
not looking for a vehicle to get from point A to point B. Every part of the car
contributes to the way they enjoy their free time, which means this type of buyer pays
close attention to every aspect of a luxury car.

They are better-educated buyers, as they regularly consume automobile content in

publications and online. Features that get overlooked by the typical customer end up
front and center for the enthusiast.

30
In an analysis of luxury consumption, social psychologist Hümeyra Aslım Bilge
observes:

"In recent years, the concept of luxury has expanded from materialism to time and
passion, and become eventually more available. As consumers satisfy their feelings of
pleasure and gratification through the luxury goods, the available luxury products will
also continue to enhance its charm for consumers."

Auto show marketers should also be aware that this customer demographic may share
detailed information about the entire purchase experience with their social circles or
on enthusiast forums.

Consumer Experience:

"Luxury" covers more than the quality of the end product. It also sets an expectation
that the consumer experience will be elevated compared to purchasing from another
automobile company.

According to Autotrader, the majority of consumers (54%) said they would buy from
a dealership that provides a superior experience over one with the lowest price.

Marketers need to consider every customer touchpoint in the process and ensure that
it meets or exceeds the assumptions that the buyer brings to the table. Some ways that
luxury car brands can convey this at an auto show include having enough staff to offer
one-on-one attention, providing value-added perks to the booth and delivering a
personalized experience that they can't get anywhere else.

Build Quality:

Some luxury car brands simply have a better build quality than their competitors. The
premium prices for the vehicles make it possible for the company to use high-end
finishes, better quality materials and innovative features.

Rolls-Royce, for example, has maintained a reputation for over 108 years for its
excellence in engineering and quiet motoring. And consumers pay the price—luxury
buyers will be hard pressed to find a model under $200,000.

31
The Bentley Mulsanne is the most luxurious vehicle Bentley can build. According to
roadandtrack.com, "The $300,000-plus Mulsanne is the most luxurious vehicle
Bentley can build. The rear seats are inspired by first-class cabins in airplanes, and the
options available are limited only by your imagination—and your budget."

When the buyer wants to have the best-in-class vehicle, they know to look for luxury
brands that deliver all of the bells and whistles.

Exclusivity:

The luxury car market has a high barrier to entry for the average consumer, which
makes it an exclusive club that not everyone can join. Some car owners end up being
the only person with that particular model in their city or region, which can give them
a level of local fame that's personally desirable.

One way to reinforce this factor at an auto show is to talk about the limited number of
vehicles released by the brand in a year. The small numbers would be a negative for a
budget car brand, but it ends up adding to the value and desirability of the luxury
brand.

People lust after products they can't have, and this buyer enjoys evoking these
feelings when they have part of a limited run. They could also end up maintaining the
value of their investment if they know that no other cars get produced after the initial
manufacturing period.

Optimizing a marketing strategy for luxury cars at an auto show requires a deep
understanding of the target audience and what drives them to look for these cars.
Leverage these triggers to move buyers along their journey and increase the chances
of attracting qualified leads interested in moving forward

32
1.11 GLOBAL FINANCIAL CRISIS:

The late-2000s global financial crisis was the first time since the Great Depression of
the 1930s that the luxury car market suffered considerably, something not seen in
previous economic downturns. Many such customers saw their net worth decline
following the collapse in financial markets and real-estate values. For example, some
of the steepest drop-offs came at the high end, including the BMW 7 Series and
RollsRoyce Phantom, and in 2010 Mercedes-Benz unexpectedly dropped the price of
the W212 E-Class. The unusually sharp decline in luxury car sales have led observers
to believe that there is a fundamental shift and reshaping of the luxury automotive
market, with one industry official suggesting that the marques no longer command the
premiums that they used to, and another saying that conspicuous consumption was no
longer attractive in poor economic conditions. Additionally, mainstream brands have
been able to offer amenities and devices such as leather, wood, and anti-lock brakes,
previously found only on luxury cars, as the costs decline.

However, luxury vehicle sales did not collapse as much as their non-luxury
counterparts. This was aided by growing interest in luxury vehicles from emerging
markets such as China and Russia.

Sales in the entry-level luxury segment remained strong throughout the GFC, due to
prices being lowered to compete with well-equipped non-luxury cars. For example, in
Canada, several luxury manufacturers set sales records in August 2009, due mostly to
discounted pricing on entry-level luxury vehicles.

33
 1.12 THE TOP LUXURY CAR BRANDS AND THEIR PARENT
COMPANY:

If you’re an avid car enthusiast, you might know that certain car brands have luxury
counterparts. If you aren’t, you may have thought that each luxury counterpart acts
independently. I’m here to tell you that both are true – it just depends on the brand.
So, if you’ve been curious about whether or not the top luxury brands are
independent, or if they have parent companies, here is your answer.

a) Mercedes-Benz

Mercedes-Benz is one of the world’s top luxury car makers, and it is owned by
an automotive company called Daimler AG. Daimler AG’s headquarters are in
Stuttgart, where a number of other automotive events take place.

b) BMW

34
BMW is independent, but what you may not know is that the brand also owns Mini
and Rolls Royce. The brand has been around for over a century, and its headquarters
are in Germany – not far from competitor Mercedes-Benz.

c) Lexus

Lexus is a prominent luxury brand, but you may be surprised to find out that it isn’t
independent. The brand is owned by Toyota Motor Company, and acts as the luxury
counterpart to Toyota – one of today’s most popular brands.

d) Jaguar and Land Rover

Jaguar and Land Rover are known as British brands, but what people may not know is
that they’re owned by a company in India called Tata Motors. While that may be the
case, the vehicles are, in fact, produced in the United Kingdom.

35
 e) Cadillac

Cadillac is owned by General Motors. This name might sound familiar, if you’ve ever
driven a Buick, Chevrolet, or GMC model. The company is based out of both Europe
and Australia, but releases vehicles all over the world.

f) INFINITI

INFINITI is a young brand, but it’s gaining ground in the luxury segment. It was
started in 1989, and has since acted as Nissan’s luxury counterpart. That said, Nissan
is owned by a company called Renault – based out of France.

36
1.13 PRE OWNED / USED LUXURY CARS:

At a time when luxury cars are witnessing a surging trend, the sales of pre-owned
category in the segment have also swelled, due to factors such as exorbitant price of
new cars, high taxes and growing consumer aspirations.

Various reports have suggested that while the pre-owned automobile market is
growing at 15 per cent year-on-year, it's the pre-owned luxury car segment that is
witnessing an increasing traction with three times demand in 2017 compared to 2010.
The demand of the likes of Mercedes, Audi and BMW, among others, have been
growing with more of service class people showing interest.

Some of the dealers of pre-owned cars ETAuto spoke to, said while the sales of
hatchback and mid size cars have maintained an average growth, the demand of the
likes for Mercedes, Audi and BMW, among others, have been growing with more of
service class people showing interest.

"Till about 2011, we used to sell four to seven luxury cars in a year but now that
number has grown to around 35-40," said one of the dealers.

According to OLX, which commands around 77 percent market share of the

organised pre-owned luxury car segment, currently the size for pre-owned cars is
valued at 3.8 million units. Market for luxury cars in general is on an upwards
trajectory. The surging trend points to higher disposable incomes, better lifestyle and
consumer aspirations," said Sunny Kataria, Director, Auto Category, OLX India.

OLX said there were 16 lakh pre-owned cars listed on OLX between January to April
2018.
Another dealer said the reason for more demand of luxury cars is the huge price
difference compared to a new car.

37
"There is almost 50-60 per cent decline in prices of a luxury car, which makes it
affordable for buyers without compromising on the features," he said.

Other growth drivers for pre-owned luxury cars include, new launches which have
increased the number of options for consumers, shorter ownership cycle reducing
from 7 years to 4 years, and better infrastructure leading to less wear and tear of
vehicle parts as a result of which the usable life of the car has extended.

Moreover, demand from smaller cities are increasing, with two out of four buyers
being from non-metros. Reports show around 40 per cent of the used car demand
came from Tier I and Tier II cities during 2015-2017

With increasing income of people from tier II and III cities, there will be a surge in
demand for luxury used cars in the coming years, a report by OLX noted.
OLX said there were 16 lakh pre-owned cars listed on OLX between January to April
2018.
In terms of new car sales in the luxury segment, sales in India grew at its fastest pace
since 2012 at around 39,000 units.

As per an IHS Markit survey, India's luxury car market ranked 27th in 2017, a
significant jump from 48th position in 2007.

The pre-owned luxury car sales, clocked sales of around 28,000 units. The number
could have been more but factors such as demonetisation, GST implementation and
banning of BS III emission norms had slowed down the sales to some extent.

Analyst say the sales are bound to grow as people have become highly aspirational
and every family wants atleast one luxury car in their homes and it will not be
surprising if the used car sales will take over the new car sales in 5-7 years from now.

Adding to the factors driving luxury car sales is the influence of digital mediums. As
per a Google report, online search related to auto sector is rapidly increasing,
especially in non-metros, where 20 per cent of OEM (original equipment
manufacturer) sales were driven by digital means in 2017.

38
Similarly, the OLX report stated that on an average three out of every four interested
car buyers, go online to research before making a purchase.
Pros:

• A nicer car:

This is probably why you're considering the used vehicle in the first place.
Luxury cars are filled with nicer materials, such as walnut wood trim,
softtouch plastics and aluminum inserts. The engines are often larger and
have more power and (while this is subjective), the styling is usually better.
Picture Audi's modern styling versus Volkswagen's conservative style, for
example.

• Less depreciation:

The first owner of the car has already taken the big depreciation hit. Using the
new Accord and the used 328i as examples, the Honda will depreciate by
about $4,773 in its first year, while the BMW will depreciate by about $2,903
in 2014, according to Edmunds True Cost to Own® (TCO®) data.

• Loaner access:

Assuming you are going to have your car serviced at one of the luxury brand's
dealerships, you may have access to a free loaner car. That's a nice perk.

Cons:

• Little or no warranty:

This depends on whether you are buying the luxury vehicle from a private
seller, an independent dealership or from the brand's dealership as a CPO car.
(Only brand dealerships can sell CPO vehicles.) If you bought a three-year-old

39
 BMW 328i that was not a CPO car, you would only have about a year left on
the new-car warranty. A luxury CPO warranty adds about two years to the
vehicle's original warranty. If the vehicle still has some warranty remaining,
you can always purchase an extended warranty. This, however, will offset the
savings you got from buying the used car in the first place.

• More maintenance:

Since the used luxury vehicle has more miles, it will usually need more
maintenance than the new car. Edmunds TCO estimates indicate that the
Honda Accord will cost $3,833 to maintain over five years, while the BMW
328i will cost about $12,784.

• More expensive repairs:

Parts and labor rates are more expensive for luxury vehicles. For example,
Edmunds TCO puts the five-year repair cost at $7,989 for the used 328i.
Compare this to $773 for the new Accord.

• May not have all the options:

Just because you're buying a luxury vehicle doesn't mean any particular car
will come loaded with all the options. We ran across a number of 328i models
that didn't have navigation or a rearview camera, for example.

• Old technology:

Assuming the luxury car does have navigation or an infotainment screen,

there's a high likelihood that they won't age well. The map data will be years
out of date and the infotainment system may not play nicely with your
smartphone. If the latest technology is important to you, stick with the new
car.

40
• Less efficient:

Since luxury vehicles tend to come with larger and more powerful engines,
they are often less fuel-efficient than non-luxury vehicles. Additionally, many
luxury-car engines (like the one in our hypothetical 328i) require premium
fuel, which also adds to the costs of ownership.

41
CHAPTER 2: RESEARCH METHODOLOGY

2.1 INTRODUCTION:

Research methodology is the specific procedures or techniques that is used to identify,

select, process, and analyse information about a topic. In a research paper, this
methodology section allows the reader to critically evaluate a study's overall validity
and reliability.

This research aims to understand the research methodology of Consumers perception

towards Luxury car segment with the help of Primary and Secondary data. A survey
had been carried through Questionnaire method and the perception of about 100
respondents were noted and analysed. Analysis was done with the help of pie charts,
bar diagrams, etc.

Demographic factor is one of the key social factors. It affects lifestyle, consumer
trends, the type of risk aversive behaviour, spending power and value per customer.
The change of lifestyles and habits have a direct impact on the consumer
expenditures. Consumer Demand: Now a days, consumers are very smart in selecting
a car. They look for the best option available in the market. Their demands are highly
efficient, affordable cost, reliable, comfortable and stylish models cars. Some
consumers also consider that the cars should be environment friendly.

Thus such factors will be analysed in this study and different perception of different
consumers will analysed.

Luxury vehicle is a marketing term for a vehicle that provides luxury — pleasant or
desirable features beyond strict necessity — at increased expense. The term suggests a
vehicle with higher quality equipment, better performance, more precise construction,
comfort, higher design, technologically innovative modern, or features that convey an
image, brand, status, or prestige, or any other 'discretionary' feature or combination of
them. Luxury is relative, "what may be luxury for one may be premium for another."

42
2.2 Objectives of study

A research objective is a clear, concise, declarative statement, which provides

direction to investigate the variables under the study. Research objectives focus on the
ways to measure the variables, such as to identify or describe the. The objectives of a
research project summarize what is to be achieved by the study. Research objective is
a concrete statement describing what the research is trying to achieve.

Research is an organized investigation of a problem where an investigator attempts to

gain solution to a problem. In order to get the right solution a clearly defined
objectives are very important.. Without focused objectives, no replicable scientific
findings can be expected.

The following are the objectives of this study:

• To determine the scope of luxury cars in India.

• To identify and analyse the factors influencing the purchase of luxury cars.
• To assess the awareness of buyers about various brands and features of a
luxury car.
• To examine the level of satisfaction of buyers in using the luxury car.
• To study the perception of consumers while buying a luxury car.

43
2.3 Scope of the study:

“Marketing is a total system of business, an ongoing process of:

i. Discovering and translating consumer needs and desire into products and
services.
ii. Creating demand for these products and services.
iii. Serving the consumer demand with the help of marketing channels, and
then, in turn,
iv. Expanding the market even in the face of keen competition.”

The study includes the following items:

1. General purpose of the study of the study is to know about the different
perception of different consumers regarding the Luxury car segment.

2. The population or sample that I am studying are the middle and high class
families residing in Mumbai. The total sample size I have taken here is 100.

3. The topics or theories that I have discussed here are some of the types of
luxury cars, Classification of Indian luxury consumers, Different features of a Luxury
car, History about Luxury cars, Market categories, Psychology of a Luxury car buyer
and the reasons for a consumer to buy a Luxury car.

4. The main aim of the study is to know what the consumers prefer. Would they
prefer to buy a Luxury car or would they prefer to invest the same money into
something else.

5. The study helps us to know what features the customers look into before
buying a Luxury car, what are the reasons for them to buy a Luxury car and which
Luxury car brand would they prefer to buy.

44
Consumer perception is an important tool for studying about a Luxury car.

Customers that are satisfied with a product or business have an overall good
perception of that product or business. When consumers’ perceptions are good, they
will continue purchasing goods from this company. These customers also will avoid
spreading disappointing experiences to others. Consumer perceptions are based on
feelings. A customer perception measurement is an important tool used by companies
that expresses how well the companies are satisfying customers.

The only way to measure and increase customer's positive perceptions of your
company is to ask customer's how they feel about your company. By creating a
survey, you are able to get information directly from the customer.

The study is important because, the automobile industry in India is expected to be

the world’s third largest. Globalization and liberalization is very evident in
automobile industry, with the entry of many prominent foreign manufacturers. Since
early 1990‟s Manufacturers such as Ford, General Motors, Honda, Toyota, Suzuki,
Hyundai, Renault, Mitsubishi, Benz, BMW, Volkswagen and Nissan set up their
manufacturing units in India in joint venture with their Indian counterpart companies,
by making use of the Foreign Direct Investment policy of the Government of India,
These manufacturers started capturing the hearts of Indian car customers with their
choice of technological and innovative product features, with quality and reliability.
Indian markets have seen an increase in the demand of luxury items especially Luxury
Cars. Another important fact is that the demand for such cars is not only increased in
Tier-I cities but has increased even in Tier- II & Tier- III cities. Considering such shift
in buying preference, the global premium luxury cars brands like Audi, BMW Aston
Martin, Lamborghini Mercedes, Rolls Royce and others are now eyeing the Indian
Market. The conceptual study of brand building in Indian market of these luxury
brands is also analysed, as they see huge potential in Indian buyers and are planning
to even establish their showrooms and manufacturing units in India.

45
2.4 Research methodology:

2.4.1 Research universe:

This research is conducted with Mumbai being the universe. All the respondents
reside within Mumbai Maharashtra.

2.4.2 Method of sampling:

Here simple random sampling method is used. Simple random sampling is a

sampling technique where every item in the population has an even chance and
likelihood of being selected in the sample. Here the selection of items completely
depends on chance or by probability and therefore this sampling technique is
also sometimes known as a method of chances.

A simple random sample is a subset of a statistical population in which each member

of the subset has an equal probability of being chosen. A simple random sample is
meant to be an unbiased representation of a group.

2.4.3 Sample size:

The sample size is a term used in market research for defining the number of subjects
included. The sample size in this research is 100. They are selected from the general
population and is considered a representative of the real population for this specific
study. The samples are mostly working employees as well as students in Mumbai.

2.4.4 Method of data collection:

In this research conducted a mix of both primary and secondary methods were
conducted to collect data from various sources.

46
2.4.4.1 Primary data:

Primary data are those data, which are collected afresh and for the first time and
therefore it happens to be original in character. They are collected by the investigator
conducting the research.

Primary data is information that you collect specifically for the purpose of your
research project. An advantage of primary data is that it is specifically tailored to your
research needs. A disadvantage is that it is expensive to obtain.

2.4.4.2 Secondary data:

Secondary data are those which have already been collected by someone else and
which have already been passed through the statistical process.

The secondary data collects supplements that primary data previously collected. It
helps to broaden the view of the subject that is taken into consideration for conducting
the research study.

2.4.5 Method of primary data collection:

The questionnaire method is used for primary data collection.

Questionnaire is an instrument for collecting uniform and comprehensive information

in survey research. Basically, it is a set of standardized questions, often called items,
which follow a fixed scheme in order to collect individual data about one or more
specific topics. Sometimes questionnaires are confused with interviews. In fact, the
questionnaire involves a particular kind of interview—a formal contact, in which the
conversation is governed by the wording and order of questions in the instrument. The
questionnaire often is administered in a standardized fashion, that is, in the same way
to all the respondents of the survey.

The questionnaire was prepared on google docs and sent to the respondents to
understand and comprehend their opinion.

47
2.4.6 Method of secondary data collection:

The secondary data was collected from various published and unpublished sources
such as books, journals, websites, Government publications, research papers and other
subject related articles.

2.4.7 Data analysis techniques:

Data Analysis is the process of systematically applying statistical and/or logical

techniques to describe and illustrate, condense and recap, and evaluate data. Analysis
is to extract useful information from data and taking the decision based upon the data
analysis.

Here, the questionnaire was prepared using the google document and the answers
received by respondents was interpreted with the help of pie charts, histogram,
bardiagram, graphs and percentage method.

Data analysis is understanding the responses with the help of various graphical
representative tools such as bar-diagram, pie charts, etc.

48
2.4.8 Limitations of study:

• The scope of research study is Mumbai. So the results are reliable to this
place only.
• The information given by the respondents can be biased. It is the tendency of
a person to answer questions on a survey untruthfully or misleadingly. They
may feel pressure to give answers that are socially acceptable. Thus the
results obtained from the research may not be totally accurate.
• It is a general study on Luxury cars, so this study is not made for a specific
brand.
• People may find it boring to answer the questionnaire which is a major
difficulty that affects the study. They might not answer the questionnaire or
randomly select any options. Thus the results may be flawed.

49
CHAPTER 3: REVIEW OF LITERATURE

Review of literature is essential for every researcher to carry on investigation

successfully. All efforts where made together relevant study. But there is no sufficient
number of studies on luxury products. Anyhow to gain the knowledge relating to
Methodology, Hypothesis, Problem etc. some other relevant studies have been
reviewed and this details has been summarized below:

Preeti tak and Ashish pareek (August 3, 2016) in their article on “Consumer
Attitude towards Luxury Brands” An empirical study studied the buying pattern
consumers has witnessed dramatic change over the past decade. Higher income has
enhanced consumer buying power. As a result consumers are readily adopting global
luxury brands at a much faster pace. Indian consumers are attracted towards acquiring
luxury brands and purchasing these brands has become a prestige symbol. Luxury
brands are helpful in communicating one’s uniqueness, fashion style and individuality
in social circles. This study analyses the impact of dimensions of consumers’ need for
uniqueness and fashion consciousness on the attitude towards luxury brands. A
structured questionnaire was used to collect the data. To test the hypotheses,
correlation and regression analyses were employed. The findings suggest that the
dimensions of consumer need for uniqueness and fashion consciousness positively
influence their attitude towards luxury brands.

Shweta kastiya (August 3,2016) in her article on The Impact of consumer

personality traits on luxury brand market: An empirical study on closet consumers
studied the market for luxury brands is expanding rapidly in India, includes thanks to
economic deregulation, rapid GDP growth. Increasing consumption, and a growing
young and upper middle class working population, who can be classified as closet
consumers. Closet consumers are those who have not been born wealthy and are just
experimenting with luxury as yet with a middle-class and conservative mindset, the
aim of this study was to explore the impact of consumer personality traits on
preference towards luxury brand market segment. Using Exploratory factor analysis

50
(EFA), 16 selected luxury consumer personality traits have been reduced to five major
factors, namely modernity, eccentricity, sincerity, competence and excitement the
findings show that some consumer personality traits are significantly related to
preferences towards particular luxury brand market segments.

Anumesh kariappa (July 8, 2015) in his article a study on luxury cars in India
studied that Globalization and liberalization is very evident in automobile industry,
with the entry of many prominent foreign manufacturers. Since early 1990‟s
Manufacturers such as Ford, General Motors, Honda, Toyota, Suzuki, Hyundai,
Renault, Mitsubishi, Benz, BMW, Volkswagen and Nissan set up their manufacturing
units in India in joint venture with their Indian counterpart companies, by making use
of the Foreign Direct Investment policy of the Government of India, These
manufacturers started capturing the hearts of Indian car customers with their choice of
technological and innovative product features, with quality and reliability. Indian
markets have seen an increase in the demand of luxury items especially Luxury Cars.
Another important fact is that the demand for such cars is not only increased in Tier-I
cities but has increased even in Tier- II & Tier- III cities. Considering such shift in
buying preference, the global premium luxury cars brands like Audi, BMW Aston
Martin, Lamborghini Mercedes, Rolls Royce and others are now eyeing the Indian
Market. The conceptual study of brand building in Indian market of
these luxury brands is also analysed, as they see huge potential in Indian buyers and
are planning to even establish their showrooms and manufacturing units in India. The
automobile industry in India is expected to be the world’s third largest by 2016.

Henrik uggla (August 3, 2016) in her article leveraging luxury brands: Prevailing
trends and research challenges studied this conceptual paper revolves around trends
and research challenges in luxury brands management for the future. Four broad
research trends are identified and discussed. First of these is the issue of country
cannibalization at the strategic and tactical level. Second, is the issue of make-andbuy
brand portfolios, revolving around how brands can be acquired from the market and
internalized with the portfolio, and how brand managers think in relation to this.

51
Thirdly, the issue of luxury partner branding is discussed in relation to modifier and
modified brands, and their relation towards and between each other. Finally, the issue
of old brand extensions is developed and discussed in depth.

Srinivas Acharya and Ribhu Mahajan (December 27, 2009) in their article "The
Competition Heats Up - Super Luxury Cars in India" studied that The Four-Wheeler
Industry in India has not quite matched up to the performance of its counterparts in
other parts of the world. The primary reason for this has been the all-pervasive
regulatory atmosphere prevailing till the opening up of the industry in the
mid1990s.The various layers of legislative Acts sheltered the industry from external
competition for a long time. Moreover, the industry was considered low-priority as
cars were thought of as "unaffordable luxury". But now the trend has changed it is
expected that by 2030, the Indian car market will be the 3rd largest car market across
the globe. The main encouraging factors for the success story of the car market in
India are the increase in the opportunity for new investments, the rise in the GDP rate,
the growing per capita income, massive population, and high ownership capacity.
Luxury is all set for an unprecedented flourish here as the Indian consumer has
overcome the guilt pangs associated for ages with indulgence. The size of the luxury
market in India is estimated at around $ 3.5 billion, and what’s best, given the right
momentum, it could easily leapfrog to $30 billion by 2015. The Top 10 Super Luxury
Cars in India are Mercedes Maybach, Bentley Azure, Rolls Royce
Phantom, Lamborghini Murcielago, Bentley Arnage, Bentley Continental Flying
Spur, Porsche 911 GT2, Mercedes-Benz S Class, BMW 7 Series and Audi R8.

Shamindra sanyal (September 2014) in his article Attitude of Indian consumers

towards luxury brand purchase: an application of ‘attitude scale to luxury items’
studied Consumers’ attitude about luxury goods in Indian perspective through an
empirical investigation that was carried out among urban respondents belonging to
different social strata in Kolkata Megapolis, West Bengal, India. We have proposed
three hypotheses where separately attitude and subjective norms toward luxury brands
positively affect the intention to use the goods. Furthermore, intention to use luxury
brands does not positively influence actual usage of the same. Finally through

52
qualitative process, we have determined the ‘none available’ item spaces as
mentioned in a priori classification of attitudes to luxury. The findings support the
hypothesis that luxury consumption intentions affect actual luxury brand consumption
behaviour. The findings show how nuances occur between measures of attitudes,
subjective norms, and intention.

53
CHAPTER 4: ANALYSIS AND INTERPRETATION OF DATA.

Q1.

OPTIONS PERCENTAGE RESPONSES

GENDER MALE 51% 51
FEMALE 49% 49
OTHER 0% 0

INTERPRETATION:

Here the gender of the respondent is depicted in the form of a pie

chart.
The respondents are grouped according to their gender (i.e.) Male,
Female or Other.
51% of our respondents are Male and 49% of our respondents are
Female.

54
Q2.

OPTIONS PERCENTAGE RESPONSES

18-30 60% 60
AGE 31-40 17% 17
41-50 15% 15
50 and above 8% 8

INTERPRETATION:

Here the respondents are grouped into the following age group
mentioned above.
Majority of the respondents (i.e.) 60% fall under the category of 18–
30 age group.
17% respondents fall under the age group 31–40 and 15% respondents
fall under the age group 41–50.

8% of the respondents are senior citizen’s (i.e.) 50 and above.

55
Q3.

OPTIONS PERCENTAGE RESPONSES

INCOME None 42% 42
GROUP Below 15 lakhs 32% 32
(Annually) 15L – 25L 15% 15
Above 25 lakhs 11% 11

INTERPRETATION:

The respondents are grouped in the following annual income group

mentioned above.
Majority of the respondents (i.e.) 42% have no income as they might
be students or might be unemployed.
32% respondents have annual income below 15 Lakhs and 15%
respondents have income between 15L–25L.
Only 11% respondents have income above 25 Lakhs.

56
Q4.

Do you own a OPTIONS PERCENTAGE RESPONSES

Luxury car?
Yes 24% 24
No 76% 76

INTERPRETATION:

Here the respondents are asked whether they own a Luxury

car or no.
24% of our respondents own a Luxury car.
Whereas, 76% of our respondents do not own a Luxury car.

57
Q5.

OPTIONS PERCENTAGE RESPONSES

How do you know Internet 77% 77
about the Luxury Television 54% 54
car brands? Newspaper 39% 39
Friends & family 59% 59
magazines 29% 29

INTERPRETATION:

The bar diagram above represents how did the respondents

know about the Luxury car brands.
Majority of the respondents (i.e.) 77% came to know about
the Luxury car brands through Internet, followed by Family
and friends with 59% and Television with 54%.
Newspaper with 39% and Magazines with 29% were also a
means of promotion

58
Q6.

What is the OPTIONS PERCENTAGE RESPONSES

reason for you Status 24% 24
to purchase a Societal influence 12% 12
Dream car 51% 51
Luxury car?
Exclusivity 40% 40
comfort 74% 74

INTERPRETATION:

Above mentioned are the reason for the respondents to

purchase a Luxury car.
Majority of 74% respondents would purchase a Luxury car
for its Comfort.
51% respondents buy it as it is their Dream car whereas
40% respondents buy it because of its exclusivity.
24% would buy it as a Status symbol and 12% because of
Societal influence.

59
Q7.

OPTIONS PERCENTAGE RESPONSES

What features High – tech 60% 60
will you look at Latest model 49% 49
before buying a Maintenance cost 43% 43
Luxury car? Mileage 32% 32
Interior 54% 54
Safety 74% 74
Brand image 40% 40

INTERPRETATION:

Majority of the respondents (i.e.) 74% and 60% will look

for Safety and High-tech before buying a Luxury car.
54% respondents will look out for the Interior whereas,
49% will look of for its Latest models.
43% will look at its Maintenance cost and 40% will look for
its Brand image.
Only 32% respondents will look at the Mileage, giving it
the least importance.

60
 Q8.

What is your OPTIONS PERCENTAGE RESPONSES

opinion regarding
Low 3% 3
pricing of Luxury
car? Reasonable 67% 67
High 30% 30

INTERPRETATION:

The above pie chart shows us the opinion of respondents

regarding pricing of Luxury cars.
67% respondents think that the price is reasonable.
30% respondents think that the price of a Luxury car is
high.
Whereas, only 3% people think that the price for a Luxury
car is low.

61
Q9.

OPTIONS PERCENTAGE RESPONSES

Which luxury Jaguar 56% 56
car would you BMW 41% 41
prefer to buy? Mercedes 41% 41
Rolls Royce 39% 39
Bugatti 22% 22
Lamborghini 35% 35

INTRTPRETATION:

The above bar diagram depicts which Luxury car would the
respondent prefer to buy.
Majority of the respondents opted for Jaguar with 56%.
There is a tie between BMW and Mercedes with 41% each.
Followed by Rolls Royce with 39% and Lamborghini with
35%.
The least preference was given to Bugatti with 22%.

62
 Q10.

Would you like to buy OPTIONS PERCENTAGE RESPONSES

a luxury car OR invest
that money into Buy a luxury car 44% 44
something else?
Invest the money 56% 56

INTERPRETATION:

The above pie chart shows us whether the respondents

would buy a Luxury car OR invest the money into
something else.
Majority of the respondents (i.e.) 56% would invest the
money into something else other than spending it on a
Luxury car.
44% respondents would prefer to buy a Luxury car other
than investing it.

63
CHAPTER 5: FINDINGS AND CONCLUSION

FINDINGS:

CONSUMER BEHAVIOUR OF LUXURY CARS:

Most current owners of luxury cars tend to have purchased a car previously; the
customer has potentially developed an attitude toward it. Here, an attitude becomes an
evaluating judgement (desire or not desire) based on prior or present experience such
as previous satisfaction from dealers or products and services (after sales and
warranty), driving experience, and socioeconomic status of customers. It is also
possible that an attitude can be developed based on prior information without
experience, as when consumers develop preferences or biases for or against brands
based on the brands’ images in the marketplace. This also depends largely on
purchasing power of individual Customers. Customers may have a favourable attitude
towards some manufacturers’ luxury cars, but may lack the ability due to insufficient
purchasing power or willingness to take buying action. On the other hand, luxury or
lower luxury (lower-priced) manufacturers’ cars may be neglected by customers who
have high purchasing power (or overpurchasing power in this sense). For example,
most buyers (with high, medium, or low income) tend to have a preferable attitude
towards some manufacturers’ luxury cars such as Aston Martin, Bentley, Ferrari,
Porsche, and Rolls-Royce, though the majority of them might not even have had a test
drive before. The difference is that customers with low to medium income may still
also anticipate the quality of smaller sized cars of manufacturers from the lower
segments such as Fiat, Ford, Peugeot, and Vauxhall, as these cars are affordable to
them. In other words, cars from lower segments have the meaning of ‘reality’ to them.
In contrast, the better-off buyers will only appreciate expensive cars from luxury
marquees and may disregard inexpensive cars from any marquees (even from a luxury
one e.g., the least expensive Audi A3 or BMW 3 Series Compact) as their choices.

64
FACTORS INFLUENCING CONSUMER PREFERENCE TO BUY LUXURY CARS:

Change in attitude of the customer accounts for the sudden acceleration in the Luxury
car Market in India, as the emphasis has been shifted from price consideration and
affordability to design, quality and pleasure. The Indians who believed in traditional
savings now follow an extravagant approach. Stepping down to the third possible
reason, exposure and passion for speed, power and elegance run on to take their seats.
With more and more Car rallies, exhibition, televising of Formula 1 and international
motor shows happening in the country, these luxurious coupés have created an urge in
drivers to experience comfort and control at the very same time. Also, lower interest
rates and good conditioned roads are some of the steps taken by the Indian
government which fuelled the demand for ultra-luxury cars in Indian market. Now,
penetrating into the future, we can adamantly say that, with the real GDP growth of
India (8.8% in 2016) being outstanding, there are definite prospects of increasing
count of Luxury car buyers. Luxury brands have often been associated with the core
competences of creativity, exclusivity, craftsmanship, precision, high quality,
innovation and premium pricing. These product attributes give the consumers the
satisfaction of not only owning expensive items but the extra-added psychological
benefits like esteem, prestige and a sense of a high status that reminds them and
others that they belong to an exclusive group of only a select few, who can afford
these pricey items.

65
 CONCLUSION:
Consumer Buying Behaviour is the decision processes and acts of people involved in
buying and using products. Need to understand is why consumers make the purchases
that they make, what factors influence consumer purchases, the changing factors in
our society. There are various number of factors that has been analysed in the above
study stating that Age, Education level of respondents, Occupation and Income level
of the people influences the purchase of the Luxurious car. Intern it also deals with
other influencing factors such as Sources of information, Level of Awareness of
brands of cars as well as Special features of the car etc Consumer Buying Behaviour
refers to the buying behaviour of the ultimate consumer. A Branded car company
needs to analyze buying behaviour for: 1. Buyer’s reactions to a firms marketing
strategy has a great impact on the firm’s success. 2. The marketing concept stresses
that a firm should create a Marketing Mix (MM) that satisfies (gives utility to)
customers, therefore need to analyse the what, where, when and how consumers buy.
3. Marketers can better predict how consumers will respond to marketing strategies.
Though extensive research has been applied for the study as the consumer preference
or buying behaviour may be changed over time. This study further enhances the
researchers to make an elaborate study on the particular brand of Luxury cars and
how far it has got impact on the consumers.

The advancing demand of luxury cars across the globe represents a

promising trend to the growth of luxury car industry. The rising demand of luxury car
in India is a sign of people getting richer day by day as well as their desires are also
increasing and there is also increase in the spending power of the customer which
shows that economy of India is also developing at a fast rate. There has been 200%
growth in the automobile sector in India especially in the luxury segment and the
sports car segment. Due to which European luxury car makers are introducing most of
their sports car models in India due to the rising demand and interest of the people.

Increase of disposable income of the people has led to different lifestyle.

Now the mindset of the Indian consumers is a lot different. Previously, Indian
consumers would check the prices of everything they bought. Now, the consumer
looks at the experience of the company during the buying process. More than price,
quality matters.

66
 BIBLIOGRAPHY

JOURNALS:

 http://www.iaeme.com/MasterAdmin/Journal_uploads/IJCIET/VOLUME_9_I
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 https://www.academia.edu/4965991/A_PROJECT_REPORT_ON_THE_LUX
URY_CAR_SEGMENT_Submitted_By_-
_Aafreen_Tinwala_TYBMS_Semester_6_Project_Guide

 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2817809

(The IUP Journal of Brand Management, Vol. XIII, No. 1, March 2016, pp. 3441)
by Henrik uggla.

 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2817781

(The IUP Journal of Brand Management, Vol. XIII, No. 1, March 2016, pp. 2033)
by Shweta Kastiya.

https://shodhganga.inflibnet.ac.in/bitstream/10603/72552/8/chapter%204.pdf

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WEBSITES:

 https://www.autosofdallas.com/blog/what-are-the-top-luxury-car-brands-andtheir-
parent-companies/

 https://en.wikipedia.org/wiki/Luxury_vehicle

 https://importcarcenter.com/2018/06/14/7-reasons-to-buy-a-brand-newluxury-car-
luxury-car-auto-repairs-in-grapevine-tx/

 https://www.bmwakron.com/blogs/1468/akron-bmw-dealer/131/

 https://www.edmunds.com/car-buying/should-i-buy-a-new-car-or-a-usedluxury-
car.html

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 ANNEXURE

Q1. Name – _____________

Q2. Gender –

a) Male
b) Female
c) Other

Q3. Age –

a) 18 – 30
b) 31 – 40
c) 41 – 50
d) 50 and above.

Q4. Income group (Annually)

a) None
b) Below 15 Lakhs
c) 15L – 25L
d) Above 25L

Q5. Do you own a Luxury car?

a) Yes
b) No

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Q.6 How do you know about the Luxury car brands?

a) Internet
b) Television
c) Newspaper
d) Friends and Family
e) Magazines
f) Other.

Q7. What is the reason for you to purchase a Luxury car?

a) Status
b) Societal influence
c) Dream car
d) Exclusivity
e) Comfort
f) Other.

Q8. What features will you look at before buying a Luxury car?

a) High – tech
b) Latest model
c) Maintenance cost
d) Mileage
e) Interior
f) Safety
g) Brand image
h) Other.

Q9. What is your opinion regarding pricing of a Luxury car?

a) Low
b) Reasonable
c) High

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Q10. Which Luxury brand would you prefer to buy?

a) Jaguar
b) BMW
c) Mercedes
d) Rolls Royce
e) Bugatti
f) Lamborghini
g) Other.

Q11. Would you buy a Luxury car or would you prefer to invest that money into
something else?

a) Buy a Luxury car.

b) Invest the money.

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