RESEARCH REPORT On A PERSPECTIVE ON FURTURE OF SMALL CARS IN INDIA

ACKNOWLEDGEMENT

My first and foremost thanks to God Almighty who helped me to complete my dissertation work. I take this opportunity to express my profound gratitude to my faculty guide *************** whose support and suggestions were immense in enabling the successful completion of this dissertation report. Finally, my hearty thanks to my friends for their moral support, suggestions and encouragement.

***************

CONTENTS

Declaration Certificate from Faculty guide Acknowledgement

S. No. 1. 2. 3 4.

Chapter Name Introduction Literature Review Industry Structure Objective & Research Methodology 4.1-Objectives 4.2-Scope of the study 4.3-Research methodology

5. 6. 7.

Result and Discussions Conclusions and findings Recommendations References Annexure

CHAPTER - 1 INTRODUCTION

The main aim of the study is to analyze the strategies being adopted in the Indian small passenger Car Industry. A strong car brand can create significant value in the automotive industry. The price consumers expect to pay for otherwise identical luxury vehicles can vary as much as $ 41301 depending on the car's brand. For massmarket cars, brand helps determine which products a consumer considers buying. Furthermore, superior brands extend their halo across every model of vehicle within the brand. It's no surprise that most auto manufacturers make brand positioning and development a key item on their marketing agenda. Because of the prominent role that brand positioning and

development play in many auto manufacturers' business strategies, we conducted extensive research and analysis to better understand how consumers think about car brands. The study analyzes the set of factors which provide valuable insights into consumer brand

perceptions. The consumers have a simple yet sophisticated understanding of what differentiates car brands. Notwithstanding automakers'

attempts to distinguish their brands on the basis of lifestyle or emotional imagery, consumers evaluate brands in terms of their

earned reputation for product excellence relative to their total ownership cost. Consumers' perceptions are based on their

accumulated direct and indirect experience with the products that constitute those brands. These perceptions are obviously not perfect. Some brands'

reputations exceed or fall short of their demonstrable product attributes. But, as a rule, consumers' beliefs are accurate, stable, and relatively immune to manipulation. In contrast to the situation with other consumer goods, in which equity is created substantially through advertising, automotive brand perceptions change primarily through consistent and sustained changes in the underlying product portfolio. The race for Indias small car market has begun. But only those among the Big Four who get all their strategies right will win this unforgiving contest. The prize: not just the largest automobile segment, but also survival in this market .Now they are lined up for the last lap. With market India becoming a minefield for the worlds largest auto-makers, the Formula 1 has become brighter than the red lights that have stopped them in their tracks so far -only the small car will enable endurance. Bumper-to-bumper, therefore, the combatants are accelerating towards the small-car luxurious segment. Though Indias small car rally puts it way ahead of Europes annual compact car production of 5 lakhs units, it is still a distant second to the 1.7-1.8 million mini cars cranked out per year by Japan. The

Indian unit now faces an onslaught from global competitors rushing into the country with ambitious expansion plans. Honda, Toyota, Hyundai, General Motors and others have announced plans to make small cars in India. Small cars (comprising models like Maruti 800, Alto, Santro, Indica, WagonR, Swift, Getz etc.) have enjoyed faster growth this year than the overall growth of just fewer than 22%. Small car exports have clocked over 84,000 units till October 2008. Last year, small car exports touched 93,844 units in April-November. As for domestic sales, the compact car curve has not been evenly steep year-on-year. It grew from 3, 97,682 units in April-November 2007-08 to 7, 32,700 units last fiscal, up just 11.6%. The demand for cars is dependent on a number of factors. These factors can be studied as under: - Per capita income, Price of cars, Availability and cost of car financing schemes, Introduction of new models, Incidence of duties and taxes, Depreciation norms, Fuel cost and its subsidization, Public transport facilities. Since 1998, there has not been the smallest lull in the Indian automobile market. It has taken a giant leap in a last decade to become the hottest automobile market in the world. Almost every car manufacturer in the world wants to have an outlet here. Its not just the possibility of dumping, a large number of chassis thats attracting them here, but the frugal engineering that everyone wants to exploit to reduce the costs and be competitive in price-sensitive

markets. India is already manufacturing close to 1.5 million cars every year and new cars are being planned almost every day. The Hyundai i10 became the first car to be sold worldwide but manufactured exclusively in India. This is certainly going to establish India as an auto hub in this part of the world. Pune was recently tagged as Detroit of India when GM and Volkswagen drove down to Chakan-Talegaon (near Pune); and also because of the existing large footprint of auto majors and the ancillaries. On the dark side, the infrastructure has been struggling to keep up with the pace of automobile penetration. (Source1: http://www.businessweek.com/globalbiz/content/sep2006/gb2006092 6_662135.htm)

CHAPTER 2 LITERATURE REVIEW

Indias top-gear run in small cars this year has made it the second biggest compact car producer in the world after Japan. Says Jagdish Khattar, MD, Maruti Udyog: The strict CO2 emission rules due in Europe by 2010 is prompting global OEMs to look for small car options from markets like India to offset the fuel efficiency and other averages in their existing stable. Thats why more and more companies are looking to build compact car manufacturing facilities.1

Suzuki has already announced plans to make a new small car in India for domestic sales and exports for itself and Nissan. Renault has also announced plans to set up a 5-lakh unit facility with M&M, in which Nissan is expected to become a partner. Honda has announced that it will set up another facility for a small car (the new Jazz) in India, while Toyota is said to be thinking of a second facility dedicated to a compact model.1

Hyundai is expanding its capacity, while GM is setting up a new plant in Maharashtra for small car Spark. Ditto for Volkswagen, which is setting up a compact car facility near Pune? The small car rush and the build up of capacity may also have its impact on the global auto

pecking order, says Arindam Bhattacharya of Boston Consulting Group. The biggest growth segment in the next five to 10 years will be the small car in developing markets where many global OEMs are disadvantaged, he says. That could lead to the ascent of players like Tata Motors of India and Chery of China.1

Indian automobile industry had an action-packed year with big-ticket announcements such as excise duty cut for small cars, entry of German car major Volkswagen and Mahindra's tie-up with Renault, besides snazzy car and bike launches keeping the sector in top gear in 2006. The year also saw the release of Automotive Mission Plan 2006-2016, which aims at drawing a roadmap for the auto industry and doubling the sector's contribution in GDP by taking the turnover to $145 billion in 2016 with focus on export of small cars, MUVs, twowheelers and auto parts.2 But 2006 also had its share of differences, which literally began from the word go. The much-awaited 8 per cent excise duty cut on small cars, though cheered companies for a while, ended creating fissures within the industry as most carmakers, except for leader Maruti, terming it as a "market distorting measure". Differential excise duty and a more favourable regime for small cars were seen to be directly benefiting Maruti, which has the largest stable of high-demand compact cars. Other companies such as

Hyundai, General Motors, Honda and Toyota cried foul, demanding that excise duty be made uniform.2

India: Small Cars Are on a Roll Fueled by huge investmentand cuts in excise taxthe subcontinent's small-vehicle market is expected to double in the next four years Small is beautiful when it comes to India's car market. Though India's auto industry is nowhere near as developed as China's, investment is starting to pour into the small-car segment. Global auto companies such as Hyundai and Honda and local ones such as Tata Motors and Maruti Udyog, a subsidiary of Japan's Suzuki Motor, are rushing forward with plans to launch small car models they hope will click with India's emerging middle class. While India is the fabled "back office of the world," Prime Minister Manmohan Singh's government has big aspirations to build up the country's manufacturing sector, and small-car manufacturing is a huge priority. The sector received a big boost in late February when Finance Minister Palaniappan Chidambaram announced plans to reduce excise duties on small cars from 24% to 16% to spur investment.

Small cars already account for 70% of India's total one-million-car yearly marketa figure that is expected to double in the next four 10

years. Around a dozen new small and compact cars, with engine capacities ranging from 1,000 cc to 1,500 cc, are expected to hit the market in the next two years in gasoline, diesel, and hybrid-engine models. India's long-range potential could be impressive. A study by consulting firms Booz-Allen Hamilton and McKinsey predicts that India's domestic car market will cross 3.5 million by 2015. Maruti Udyog, in which Suzuki has more than a 50% stake, is said to be working at lowering the cost of its base model Maruti 800 currently selling at $4,130to compete with Tata. The company boasts a portfolio of about 11 brands including the Omni, the Esteem, and the premium small car Zen; plus Suzuki brands such as the Alto, WagonR, and Versa, the off-road vehicle Gypsy, and the luxury sportutility vehicle Grand Vitara. Big Japanese automakers such as Toyota and Honda are also looking at major expansion plans in India. Honda, which established a motorcycle joint venture in India back in 1984, is aiming to double auto-production capacity at its local unit, Honda Siel Cars, to 100,000 by the end of 2007.3 Toyota and its subsidiary Daihatsu will together invest $86 million to make 100,000 vehicles a year at a facility in Bangalore. The capacity will be doubled by 2010. The company has said it wants to grab a 10% share by the end of the decade. However, it has a long way to go to catch up with Suzuki Maruti, which controls over 50% of the

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Indian passenger-car market. Automakers of all stripes are attracted to India, thanks to its galloping economy, increasing disposable income, and young population. In addition, the small-vehicle segment is a great avenue into India's sizable rural market.3

P. Balendran, vice-president of General Motors India, points out that "in terms of volumes, the mini segment remains the largest opportunity area for manufacturers." General Motors has four vehiclesChevrolet's Optra, the multi-utility vehicle Tavera, the Aveo, and the Chevy SRV, a premium "sportsback"available in India. And the company will launch the hatchback Chevrolet Spark, a refined version of Daewoo Motors' small car, the Matiz, by next April. General Motors is investing $300 million in a new plant with annual capacity of 140,000 vehicles.

Volkswagen, which has a huge manufacturing footprint in China, is also getting serious about India. It has announced plans to invest $540 million to build a plant to make 100,000 small cars a year for the Indian market. While not official, there's talk of the western India state of Maharashtra as the location for the new plant. Its current assembly operation in that state already produces 25,000 Skoda Octavias annually.

India car-market leader Suzuki hopes to extend its lead by investing $650 million to expand, make diesel cars, and set up a new plant in 12

Manesar in the northern state of Haryana. The new facility will make a compact car with global partner Nissan. It plans to double capacity to 1 million vehicles a year by 2010.

Some of that new capacity will be exported to other markets such as Europe, and Suzuki will see its production costs go lower over time. "If you have a large production base, any incremental production comes cheaper," says ABN Amro auto analyst Pramod Amte.

What could spoil this upbeat picture? One big threat would be an unexpected slowdown in India's economy that would stretch the pocketbook limits of Indian consumers, who tend to borrow to finance their car purchases. Also, if India's road infrastructure doesn't improve fast, that could break growth. But right now, India's economy is on a strong growth track. Until that outlook changes, automakers in India will continue to bet big on the small-car segment.3 Reference Sources:
1

http://economictimes.indiatimes.com/articleshow/589352.cms http://ia.rediff.com/money/2006/dec/20auto.htm

http://www.businessweek.com/globalbiz/content/sep2006/gb2006092 6_662135.htm

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Summary of the review: (February 2, 2009 February 18, 2009).

The present study on small segment car is also trying to find out the Consumer Perception about different features of cars and how Price, Design/Style, Quality, Fuel Efficient, Easy Availability and Variety are affecting the sale of cars.

The present automobile business scenario is extremely complex and some highlights of it are as under: Ever increasing intensity of competition More aggressive competitors emerging with greater frequency Changing bases of competition 14

Geographic sources of competition are becoming wider Niche attacks are becoming frequent Pace of innovation is rapid Price competition becoming more aggressive Product differentiation is declining Still untapped target market

The marketing strategies are today shifting from the mass marketing concept to individual marketing concept. Each consumer is different than the other. This is so because the likes and dislikes of individuals, demographic characteristics like economic and educational

background, geographical factors etc are different. To effectively implement this new strategy, companies need to be in constant touch with their customers and their behaviour patterns. Depending upon the above said factors, the needs of individuals also change. For example air travel may be a luxury for the common man but is a necessity for professionals since it saves time and time is money for them because of continuously increasing small car segment.

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CHAPTER - 3 INDUSTRY STRUCTURE

In a routine response purchase advertisements and endorsements play a major role. To change the consumer's behavior in routine purchase there is a need to give them information and spread awareness. Of the one million, around 70% of Indias total one million car market is expected to manifold to double in the next four years. And with a dozen new models of Mid size cars with engine capacities between 1,000 cc to 1,500 cc expected to arrive at the market the long term potential would be fasinating. Indias domestic car market is expected to cross 3.5 million units by 2015 says a study by firms like Booz-Allen Hamiltion and McKinsey. Price Wars The obstacle in India always is producing low priced cars hence making it competent and affordable to the gigantic market. Two years ago Mr. Ratan Tata, Chairman of Tata Motors announced the launch of a $2,200 priced small car by 2008. This would mean the price war would get even more aggressive. Also extensive research is continuously being done by Tata Motors for smaller car production with its joint venture partner, Fiat. To compete with Tatas 1 lakh car Maruti Udyog is re-engineering with its base model Maruti 800 to lower its cost. Maruti 800 is currently selling at $4,130. The company pride themselves on the 11 brands they produce. Some of their most 16

popular produce is Omni, Esteem, among the premium small car, Zen, Suzuki brands which include Alto, Wagon R, Versa, Gypsy, the off-road vehicle and the Sports Utility Vehicle Grand Vitara. Honda and Toyota the two big automakers of Japan are also on its way to a major expansion strategy in India.

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Attractive Market The Indian version of the Civic was rolled out by Honda in July of 2006 and by 2010 it is expected that they would have sold 150,000 units. Because of Indias high growth potential it is a very important market for Honda. Toyota and its subsidiary Daihatsu will make 100,000 vechicles a year at a plant in Bangalore investing $86 million. Further it is said that the capacity would double by 2010 so that their expected share of 10% by the end of this decade would be achieved. However with the presence of the indian automobile giant which has a market share over 50% in the indian passener car market this seems a rather difficult task. With the indian economy galloping, coupled with increasing

disposable income,young population and a large rural market,global automakers are all in the look out to bite a share of the vast high potential growth market.

70 % of the Indian population live in the rural sector earning less than their urban counterparts. This is a vast market to tap and with the cut on excise duty for the first time small segment cars could be affordable for these potential buyers. It is also estimated by the capital, New Delhi, that sales of automobile would rise from $34 billion this year to $145 billion in 2016, if one was to follow these estimations then auto sales would be 10% of Indias gross domestic product(GDP). 18

The biggest oppurtunity for car manufacturers would be in the small segment car segment. General Motors who have four premium cars in India and is launching the hatchback Chevrolet Spark by April 2007. the Chevrolet Spark would be a refined version of the Daewoo Motors ,Matiz. Also with its $300 million investment in a new plant they plan to roll out 140,000 unit vehicles annually. Volkswagen which saw great oppurtunity in China had establshed a huge manufacturing plant but now they seem to be getting serious about India. Its plan in India is the invest $540 million to build a plant producing 100,000 units of small cars. Currently they have a assembly operation facility in Maharashtra which produces 25,000 Skoda Octavias annually.

Doubling Capacity Hyundai Motors which sells Santo and Getz in the small passenger car segment is planning on investing $700 million in a new facility coupled with a engineering and transmission facility in Madras. Speculation has it that Ford and its Japanese partner Mazda will have a small car rolled out by the end of the decade for the indian market. . The Indian auto market is growing rapidly, and we continue to explore all opportunities for growth. Suzuki the Indian small car 19

market leader also plans to extend its reach by investing $650 million to set up a new plant nearby New Delhi at a place called Manesar to expand and make diesel cars. And through this facility they plan to roll out a new small car along with global partner Nissan. Maruti is on a mission to double capacity to 1 million unit vehicles per year by 2010. Besides the lucrative small passenger market in India the only setback would be to see the slowdown in the Indian economy and this would hit hard on the Indian consumers who stretch their pocket limits and borrow to finance their car. But until this high growth scenario changes automobile makers in India will continue to battle it out in the small car segment.

Market Segmentation
Some key market segments and the dominant market behaviour of buyers n those segments. Status buyers are - Car is bought primarily as a status symbol; Brand image associated with the car is very important; Quality of engineering and attention to finish are very important, in general, looks and styling are important; Multiple car owners and light users; usually chauffeur driven; Economy of operation and costs of maintenance are irrelevant to the purchase decision. The Mercedes is the absolute top of the line model in this segment. Till a few years ago the Honda and the Maruti Esteem were slotted in this segment. Other models that might make a dent in this segment are GM Opel Astra, and Toyota. 20

Classic Premium Mercedes Benz, BMW

Upper Premium

Mtisubhish Lancer, Ford Fiesta, Honda Accord, Hyundai Sonata

Lower Premium Daewoo Cielo, Maruti Esteem, Tata Sumo, Tata Estate Upper Opel Astra, Tata Indigo, Hyundai Getz, Maruti Swift, Ford Ikon, Maruti Versa

Extended Maruti Zen Estiol, Wagon R, Fiat Palieo, Tata Indigo

Compact Maruti 800, Maruti Alto, Hyundai Santo, Tata Indica

INDUSTRY ANALYSIS USING PORTER'S FIVE FORCES

Porter's "Five Forces of Competition model views the profitability of an industry as determined by the five sources of competitive pressure. These five forces of competition include three sources of "horizontal" competition - competition from substitutes, the threat of competition from entrants, and competition from established

producers - and two sources of "vertical" competition - the bargaining power of suppliers and buyers. The view of the Indian passenger car 21

industry from these five angles leading to the expected changes in the coming years in the structure.

Competition from Substitutes LOW Inadequate Public Transportation System: The public

transportation system in India is not only extremely inadequate; it is notably poor in quality. This scenario is not expected to change drastically in the next ten years. Developmental Stage of Electric Cars: Though the major car manufacturers in the world are currently developing electric cars or hybrid cars to reduce pollution in the coming years, these

technologies will require considerable length of time to become commercially feasible in developing nations as the REVA car experience has demonstrated.

Threat of New Entrants LOW Economies of Scale: Being a capital intensive industry, economies of scale acts as a significant entry barrier. Since, in India, the economy segment cars are expected to drive volume growth in India in the coming years, it is extremely important for a manufacturer to have a model in this segment to reduce his per unit cost.

General Economic Conditions: The recent pull-out of Peugeot is an example that even a global automobile company could find it

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extremely difficult to operate in India if it faces labour trouble and problems with its joint venture partner.

Rivalry between Established Competitors HIGH Highly Concentrated Industry: The Indian car industry is highly concentrated with Maruti itself accounting for about 49 per cent in April-June 2006 of all sales. Diversity of Competitors: The entry of Maruti in 1984 and the deregulation of the sector in 1993 have been landmark years for the Indian car industry. India has gradually become the latest battlefield for global auto majors. The last few years have seen the industry integrate with the global automobile industry and evolve into being extremely competitive. Product Differentiation: One of the key trends observed in the car industry during the last decade is that the products of different companies have become increasingly similar especially in the economy and mid-size segment. Excess Capacity and Exit Barriers: The entry of numerous players in the car industry can lead to significant over-capacity. This is likely to lead to significant price cuts, as companies will need to generate volumes to cover their fixed costs. The car industry faces high exit barriers in India due to various government laws, which make it difficult for a company to shutdown and fire all its employees. Also, the heavy investments in plants and development of ancillaries have resulted in high exit barriers. 23

Increase in Working Capital Needs: The intense rivalry between the automobiles companies is resulting in longer credit periods to its dealers. The substantial over-capacity is resulting in increased inventory holding. These two factors point towards an increase in working capital needs of car companies. Bargaining Power of Buyers HIGH Buyers' Price Sensitivity: Car buyers in India are extremely pricesensitive especially in the economy segment and are more willing to switch brands while intense competition among the companies requires them to generate volumes. Relative Bargaining Power: The entry of global players has redefined the dealer-customer relationship in India. The present-day global Indian consumer wants the best value money can buy plus more. Availability of Easy Financing: The availability of cheap finance for the Indian consumer has led to fierce competition among the car companies and has even led to free gifts being doled out to buyers to lure buyers. Used Car Market: The used car market is still in the nascent stage in India as compared to the developed nations like United States that has a thriving used car market. A thriving used car market reduces the ownership period of cars and helps in increasing demand for new cars. Recently, Mercedes Benz in India was offering discounts of 3035% for sparingly used E220s as it had decided to phase out this model. 24

Bargaining Power of Suppliers - LOW Diminishing Supplier Power: The development of the auto ancillary industry has brought in the phenomenon of outsourcing of car parts. However, the large number of competitors for supplying each part implies that in the coming years, supplier power will diminish to a large extent except for suppliers who have almost monopolistic powers like Mico-Bosch. Also, there is an increasing shift towards reduction in vendor base for a car company, which means that the chosen suppliers also have to make substantial financial investments to enhance the quality of their products. Moreover, the lowering of tariffs will expose the Indian automobile ancillary industry to fierce competition from better-quality imports. All these factors will lead to a situation where the automobile manufacturer will have substantial bargaining power with the suppliers in terms of quality and pricing of the product.

GENERIC STRATEGIES ADOPTED BY COMPANIES IN SMALL PASSENGER CAR SEGMENT Strategic Advantage

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DIFFERENTIATION S t r a t e g i c T a r g e t Zen Estilo

OVERALL COST LEADERSHIP

SANTRO ALTO

M800

INDICA

FOCUS ZEN ESTILO

The market leader MUL is trying to adopt a Focus strategy to protect Zen from existing competitors.

They are focusing on the customers loyalty aspect towards the brand.

They are encashing the goodwill which MUL has builds in 20 years of its existence as a best available and dependable name in Indian car market.

The entire focus strategy of Zen is build around serving a particular target (the Maruti Loyal Customers) very well, and each functional policy is developed keeping this aspect in mind.

Santro Hyundai has adopted Differentiation strategy by putting Santro in a frame of technically most advanced and spacious car.

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They feel that this strategy would provide insulation against competitive rivalry because target audiences have lower

sensitivity to price than to quality. The differentiation strategy would yield higher margins with which to deal with supplier power and will mitigate, buyers power, as buyers will lack comparable alternatives in terms of technology and will be fewer prices sensitive. They are also trying to differentiate their product by providing an extra advance Customer Care Centers (CCCs). Alto MUL is also adopting the differentiation strategy by

differentiating Alto as the most beautiful and technically advanced car with more space than other cars. They are promising more value to customers.

Indica Telco is following cost leadership by launching Indica at the lowest price in its segment Low cost position defends Indica against powerful buyers because buyers can exert power only to drive down price to the level of the next most efficient competitor. Leadership strategy also provides defence against suppliers by providing more flexibility to cope with increase in input cost. Low cost position usually also provides substantial entry barriers in terms of scale of economies or cost advantages.

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It also favours the firm vis--vis substitutes relative to its competitors in the industry.

Maruti 800 M800 has adopted both differentiation and cost leadership strategies to penetrate the car market. It is looking to have a position of cost leader in the industry by pricing its product a bit lower than other small cars At the same time, they are differentiating their product by claiming to be advanced and tough car with different style.

COMPETITOR ANALYSIS
PRODUCT, POSITIONING, STRATEGY & PROSPECT SANTRO PRODUCT Nicknamed as tall boy because of overall height (1590 mm). A

perfect urban run about mobile whose 1086 cc engine with unique

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combination of 4 valve per cylinder gives a comfortable power of 55 BHP and yielding a mileage of 16 km/l with assistance of its multi point fuel injection system. The design of car is tailor made to the Indian requirements. Santos durability and engine smoothness is by far superior to its competitors. Technology is superior and very much contemporary. It is ergonomic as well as. The power to wt. Ratio for this car is .0692 giving it a zip while accelerating. The gearing drawback is of its design and styling with bulging headlamps and vehicle slats on the grille makes it look rather grumpy.

THE POSITIONING From the day Hyundai made a mid-course correction, dumping the 1086 cc car in favor of smaller car, it was certainty that its offering had to be a complete family car. Yet, given its relative obscurity in the Indian Market, it had to offer tangible differentiates. That

philosophy has been translated into a superior engine and a spacious interior while air-conditioning has become a standard feature in all the 3 versions of the Santro. The Tall Boy up its creators differentiating strategy; but hold the price line down. Priced between Rs. 2.99 lakhs (the basic variant

which comes with air-conditioning) and 3.36 lakhs (the loaded model, which sports a power steering, central-locking, and a defogger), the Santro is targeted at the Maruti 800-user who desires to graduate to a superior vehicle. So, it is competes directly with the Zen, whose 3 29

models are priced between Rs. 3.66lacs and Rs. 5.19 lakhs. Although the Zen accounts for 25 per cent of the small cars sold, it is present in a segment that is growing at 45 per cent per annum. India is in the initial stages of motorization, and this juncture in its evolution favors the small car.

THE STRATEGY Hyundai does not have the advantage of experience but that is not tempering its aggression. At present, the South Korean manufacturer has set up a network of 80 dealers besides the exclusive Hyundai Plazas in Chennai, Delhi, and Mumbai. To preempt breakaways,

should sales betray expectation, Hyundai is not forcing its dealers to make huge investments: it is lowering their capital burden by centralizing equipment purchases, leading to cost savings of Rs.22 lakhs per dealer. Hyundais unique What might prove more helpful, however, is telescoping finance scheme, where annual

repayments will increase the level of affordability by targeting that section of consumers whose members expect their income-and by extension, their repayment capacity-to increase as they move up the career ladder or boost their business.

Its Rs. 2,300-Crore 1.20 lakhs unit-capacity manufacturing facility at Sriperambudur in Tamil Nadu is Hyundais largest integrated unit 30

outside South Korea.

India is going to be their sourcing-base for

engine components Since Hyundai makes its own engines and transmissions, its costs are more controllable than those of say, Daewoo, which will be importing Semi-Knocked Down (SKD) kits for its Matiz. With an army of 60 vendors, Hyundai has already achieved a localization level of 70 per cent compared to Daewoos 45 per cent. Even Maruti Udyog had a localization level of 25 per cent when it launched the 800 in 1983. Localization is critical for cost

competitiveness and long-term strategy.

THE PROSPECTS Despite its clear-cut vision, Hyundais energies are focused on tactical breakthroughs: sales of 10,000, 65,000, 1.10 and 2 lakhs units respectively, in 2002-03, 2004-05 and 2006-2007. A lot will depend on how (Hyundais) competitors price their products. Given an

average price-realization per car of Rs. 3 lakhs, and sales of 35,000 in year 2- which is less than the companys projections- Hyundais revenues would be Rs. 1,050 crore. Assuming an operating margin of Rs. 50,000 per car, the companys operating profits should top up to Rs.175 crore. Given Hyundais

debt-equity ratio of 1.19:1 on its Rs. 2,300-Crore investment, the interest cost for year should work out to at least Rs.125 crore, and depreciation to another Rs. 230 crore. The pay-out, then, will be

Rs.180 crore more than the operating profits. But thats something

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the company has factored in. Nobody has come to India expecting profits from year one. Neither will exports butter sales in the initial two years, since the focus will be solely on the domestic market. But, eventually, Hyundai is targeting 30 per cent of its sales from exports. Given the low

volumes, will it be able to justify its investment? Hyundai needs a sales level of 71,000 units to break even. And thats the number it is expecting in year two. By the year three, the cash profits are

expected to turn into net profits.

INDICA PRODUCT It is one of the best looking cars around with an excellent point quality. The next slashes smiling grille and tall rear headlamps gives to it one of the best lookers but its interiors are a big disappointment, with large gaps between shut lines and plastic looks. Inside derives console and is uncomplicated and the car is spacious. The 1405cc 75 BHP MPFI petrol engine is good. Also 1405cc diesel engine giving sufficient power of 54 BHP is rather noisy and unrefined. Without assistance from MDFI system it gives a satisfactory 15 km/l. One more drawback is 5 speed gear boxes in standard options of both engine options affecting its engines smoothness.

POSITIONING 32

When Project Indica was launched, Telcos Chief Ratan Tatas brief to his designers and engineers was simple; make a car that has the spaciousness of an Ambassador and the price of a Maruti 800, economy of Fiat. The product was priced below Rs.3 lakhs when it was launched in December, 1998, so it will compete with almost every car in the market. TELCO has strong engineering skills in diesel technology which it can use to offer a different product to consumers.

STRATEGY If there is one thing that the Indica can rely on, it is parenting Telcos distribution muscle. With 90 sales-and 290 service-points around the country, the Light Commercial Vehicle (LCV) and Heavy commercial Vehicle (HCV) manufacturer has already erected an entry barrier for new entrants. TELCO reaches even the villages. A new entrant Only by piggy

cannot duplicate such a network and be viable.

banking on Telcos sales infrastructure Indica cannot hope to gain the cost advantage in the small car segment. That is critical since TELCO priced the Indica as close to the Zen as possible. With an investment of Rs. 1,700 crore, the year one ,a huge Rs 85 crore of interest payments (assuming debt-equity ratio of 1:1 and an interest charge of 10 per cent), and a depreciation charge of Rs 170 crore (at a rate of 10 per cent) and assuming a material cost per car of Rs.1,25 lakhs, conversion cost of Rs.30,000, depreciation and interest charges of 30,000, excise duty (40 per cent), and a sales tax

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of Rs. 28,800 (10%), the cost of the Indica would work out to Rs.3,17 lakhs.

PROSPECTS To break even, Indica must sell 60,000 cars a year. To achieve that, TELCO is imitating GMs Saturn strategy-creating a company within a company-and has kept the Indica project independent of the parents operations, even creating a new distribution channel. It has tied up with the Hong Kong-based car dealership, Concord, a member of the Jardine Matheson Group, to set up world-class distribution outlets across the country. biggest hurdle. Already, the company has picked up a 26% stake in Concorde; but with just 7 Concorde outlets operational, and only 11 more on the anvil, TELCO, obviously, has to bank on its own dealer network. While exclusive channels would truly differentiate Indica, they would slim Telcos margins. A showroom today could cost anything between Rs. 50 lakhs and Rs 5 crore. The returns are always long-term. Still, distribution could prove to be Telcos

MARUTI 800 PRODUCT A 14 year old national car is now showing its age. It loses very badly when compared to like of Santro and Matiz. But it is the cheapest 4 wheeler with nippy performance, effortless steering, 34

and top speed of 120 kph and manages to return a mileage of 16km/l. Its 796 cc 3 cylinder engines manage only 45 BHP. Zen: It was the most happening cars around till recently. An all carbon 993 cc engine which is close cousin of Esteems engine gives a spirited performance at 60 BHP and mileage of 15 km/l. The handling is good along with good acceleration with power to wt. Ratio of .0625. Even without power assistance Zen is breeze to drive. Zen automobile gives an excellent 4 speed gear box with very good durabilitys in even dense metro traffic at the cost of slightly higher fuel consumption figures.

POSITIONING To counter competition, Maruti Udyog aims to straddle the small car price spectrum, from Rs. 2.29 lakhs (the price of the Maruti 800) to Rs.3.66 lakhs (the price of the loaded Zen D). Apart from the 600-to 1,000-cc range Wagon R, launched in 2000, Maruti Udyog will introduce 2 models between the Maruti 800 and the Zen to price out rival labels. The companys future offerings will be differentiated

along price-lines, not just on engine capacity. The splitting up of the small-car spectrum is inevitable. And car-manufacturers are realizing that.

STRATEGY During the last 14 years, Maruti Udyog has systematically built a 154dealer-strong distribution and service network, which sells 7 products35

the Maruti 800, the Omni, the Zen, the Gypsy, the Esteem, the Alto and the Wagon R. The companys marketing structure has almost

become a one-stop car shop. Undoubtedly, Maruti Udyog offers the widest choice to customers today. The manufacturer has bolstered the enviable infrastructure by setting up car-financing facilitiesthrough tie-ups with Citibank and countrywide finance, to spur sales. Indeed, half the cars sold by Maruti Udyog in 2005-06 were financed. Standing at top a fully-depreciated plant, churning out 3.5 lakhs cars a year, Maruti Udyog has the potential to make mincemeat of the competition. The reason is Costs. Theres simply no other car-

manufacturer in India today which can match Maruti Udyogs economies across the value-chain. It has 365 vendors, 154dealers, and 1,114workshops in 530 cities. New models, then, can be rolled out quickly and cost-effectively.

PROSPECTS Maruti Udyogs success hinges on its ability to upset its competitors sub-compact strategies. Its plant has tremendous cost-cutting

capability, a critical attribute in the tough Japanese market, and one that will ensure that rivals cannot out price Maruti Udyog. For

instance, the cost of components for the Matiz could workout to Rs.1.50 lakhs per car, thanks to imports of Rs. 80,000 and locallysourced materials worth Rs.70, 000. Factor in a depreciation charges of another Rs. 20,000, excise duty of 40 per cent (Rs 78,000), and a 36

sales tax of 10 per cent (Rs 27,300), and the sticker-price works out to nearly Rs. 3 lakhs without a margin. Telcos plight is similar,

although the company will have a local content of nearly 95 per cent to begin with. If the global economic situation worsens, Maruti Udyog will find exports which account for 7.88 per cent of the manufacturers salesdifficult, and, consequently, throw all its weight behind domestic sales. That will spell bad news for its competitors, who may not be able to endure in a price war. substantially higher. For, their cost of capital per car is The

Hyundais, for instance, is Rs 48,994.

market leader will leverage everyconceivable strength that it has to elbow the competition out of the market.

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CHAPTER - 4 OBJECTIVE & RESEARCH METHODOLOGY

4.1 OBJECTIVES OF THE STUDY

The objectives of this research would be to understand: 1. Analyze current trends in Indian car industry. 2. Analyze impact of Small Affordable family car option. 3. Future prospects of small passenger car in India.

4.2 SCOPE OF THE STUDY

To understand the current need of the customers with regard to countless number of models of small cars in the Indian market. A well researched analysis showing in-depth about the

customer perception, buying behavior of the Indian small passenger car customers. The current and the future scenario of the small passenger car industry in India.

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4.3 RESEARCH METHODOLOGY

The main aim of the study is to find out the consumer buying behavior, purchase drivers and implication of price war in the mid size car industry. Along with this the likely strategies of key Indian players to tackle the competition is also evaluated. The purpose of the methodology is to describe the research procedure. This includes overall research design, the sampling procedure, the data collection method, and the analysis procedure. A proper methodology has to be carried in order to reach the objective of the research. All the valuable information and data required to make this project was collected through personal visit to primary sources and secondary sources. After having defined the marketing research problem and developed a suitable approach, attention must be given to the formulation of a detailed research design, which will provide pertinent information. According to (Cooper & Schindler, 2003) when defining research design, he presents it simply as the framework for a study used in order to guide the collection and analysis of data. The study on small segment car industry was both exploratory and descriptive. Data for the purpose of research has been collected from both primary and secondary sources. The study attempted to explore and examine the perception towards B-segment car industry in light of the changing environment. It also

39

attempted to describe what are the expectations of the consumers for the passenger car manufacturers.

40

STUDY METHODOLOGY

Preliminary Investigation Secondary data analysis Qualitative research

Collection of Quantitative data Measurement and Scaling Procedures Questionnaire Design Survey

Sampling Process Target population Sample Size Sampling technique

Field Work

Analysis of Data

DATA COLLECTION Data collection may range from a simple observation at one location to a grandiose survey of multinational corporations at sites in different parts of the world. The method selected will largely determine how the data are collected. Questionnaires, standardized tests, observational forms, laboratory notes, and instrument

calibration logs are among the devices used to record raw data. 41

Primary data was collected by the researcher himself by visiting to various places located in Noida and New Delhi.

Secondary data will be collected from various books, journals, magazines and the websites of different companies were also browsed to gain information regarding their strategies. Sampling Framework for the Survey Convenience sampling technique was used to collect the data needed for the study. Tools used for data collection for the research purpose was a self-developed questionnaire. Sampling Method Convenience sampling Sampling Area Sample Size Sampling Technique Sampling Tool Distributed Random Sampling

Small Car Users New Delhi/Noida 200 Personal Interview of car owners

Questionnaire

Questionnaire Questionnaires are an inexpensive way to gather data from a potentially large number of respondents. The questionnaire

containing questions regarding purchasing behaviour of passenger cars.

42

Often they are the only feasible way to reach a number of reviewers large enough to allow statistically analysis of the results. A welldesigned questionnaire that is used effectively can gather information on both the overall performances of the test system as well as information on specific components of the system. If the

questionnaire includes demographic questions on the participants, they can be used to correlate performance and satisfaction with the test system among different groups of users. It is important to remember that a questionnaire should be viewed as a multi-stage process beginning with definition of the aspects to be examined and ending with interpretation of the results. Every step needs to be designed carefully because the final results are only as good as the weakest link in the questionnaire process. Although questionnaires may be cheap to administer compared to other data collection methods, they are every bit as expensive in terms of design time and interpretation.

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CHAPTER 5 DATA ANALYSIS

The study was done on the sample size of 200. The study was done on the demographic profile aged between 21-60 years. The response was taken and then analysed so as to find out results. The sample size had both single and family people.
Which car do you have? Cumulative Frequency Valid Maruti Alto Hyundai Santro Tata Indica i10 Zen Estilo Other Total 72 28 44 28 16 12 200 Percent 36.0 14.0 22.0 14.0 8.0 6.0 100.0 Valid Percent 36.0 14.0 22.0 14.0 8.0 6.0 100.0 Percent 36.0 50.0 72.0 86.0 94.0 100.0

From the above graph, it is clear that 36% of the sample size is having Maruti alto as their first preference, & santro, indica, i10, zen 44

estilo having 14%, 22%, 14%, 8% & 6% respectively. This shows that still people are more inclined towards brand marutis best seller car alto.
Do you relate "Social Recognition" factor with usage of car? Cumulative Frequency Valid Yes No Total 112 88 200 Percent 56.0 44.0 100.0 Valid Percent 56.0 44.0 100.0 Percent 56.0 100.0

From the graph & frequency table, it can be easily judged that 112 people out of 200 are thinking that the car shows their social 45

recognition. Other 44% of sample size thinks in the opposite way, i. e. they do not relate car with social recognition. In India, people still relate car with the social status.

Who in your opinion, exerted greatest influence on your purchase decision? Cumulative Frequency Valid Family Members Friends Advertisements Experts Dealers Others Total 112 36 20 16 10 6 200 Percent 56.0 18.0 10.0 8.0 5.0 3.0 100.0 Valid Percent 56.0 18.0 10.0 8.0 5.0 3.0 100.0 Percent 56.0 74.0 84.0 92.0 97.0 100.0

46

From the above graph, it is clear that 56% of the sample size purchase decision still depends on the family members, rest 18%, 10%, 8%, 5% & 3% still influenced by friends, advertisements, experts, dealers & others.

47

Which of the following attribute is the most important in your buying decision? Cumulative Frequency Valid Economy with regard to 72 fuel efficiency Quality with regard to 80 performance Convenience with regard 32 to availability Other Total 16 200 8.0 100.0 8.0 100.0 100.0 16.0 16.0 92.0 40.0 40.0 76.0 36.0 36.0 36.0 Percent Valid Percent Percent

From the above graph, it is clear that 80 out of 200 people prefer quality with regard to performance in the buying decision. And 72, 32

48

& 16 people are still preferring economy, convenience & other features.

What do you expect from "an economical car"? Cumulative Frequency Valid High fuel efficiency Less initial cost Low maintenance cost High resale value Other Total 96 36 30 30 8 200 Percent 48.0 18.0 15.0 15.0 4.0 100.0 Valid Percent 48.0 18.0 15.0 15.0 4.0 100.0 Percent 48.0 66.0 81.0 96.0 100.0

49

From the pie chart, 48% people prefer high fuel efficiency, 18% prefer low initial cost, and 15% prefer low maintenance cost & high resale value from an economical car. This shows that still people in India are more inclined towards high fuel efficiency.

Which aspect of "Quality" do you look in your car? Cumulative Frequency Valid Mileage Brand Safety Service Design Resale value Total 72 40 22 14 40 12 200 Percent 36.0 20.0 11.0 7.0 20.0 6.0 100.0 Valid Percent 36.0 20.0 11.0 7.0 20.0 6.0 100.0 Percent 36.0 56.0 67.0 74.0 94.0 100.0

50

From the bar chart it is clear that 72 people out of sample size prefer mileage, while 40 each prefer brand & design from the quality perspective. As every individual has his own perception about quality, this graph mainly shows the various aspects of quality.

51

While buying small car which aspect of "Convenience" influenced you the most? Cumulative Frequency Valid Good after sales service Availability of car Avalibilty of spare parts Colour choice Other Total 98 18 44 30 10 200 Percent 49.0 9.0 22.0 15.0 5.0 100.0 Valid Percent 49.0 9.0 22.0 15.0 5.0 100.0 Percent 49.0 58.0 80.0 95.0 100.0

Above graph shows, 98 out of 200 still think good after sales service is necessary with respect to convenience, when it comes to buy a

52

small car. Also 44 out of 200 think that the availability of spare parts is one of the crucial factors in buying. This indicates that people still prefer good after sales service for their car.

If someone wants to purchase a car, what would be your suggestion? Cumulative Frequency Valid Maruti Alto Hyundai Santro Tata Indica i10 Zen Estilo Other Total 56 60 24 36 14 10 200 Percent 28.0 30.0 12.0 18.0 7.0 5.0 100.0 Valid Percent 28.0 30.0 12.0 18.0 7.0 5.0 100.0 Percent 28.0 58.0 70.0 88.0 95.0 100.0

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From the above pie graph, it is clearly understood that 30% of sample size suggest hyundai santro to other people. Also 28% suggest maruti alto, 18%, 12%, 7% & 5% for i10, tata indica, zen estilo & others respectively.

What new feature would you expect in your present car? Cumulative Frequency Valid Fuel Efficiency Maintenance Cost Safety Power & Speed Better after sales 12 service Other Total 34 200 17.0 100.0 17.0 100.0 100.0 6.0 6.0 83.0 52 28 28 46 Percent 26.0 14.0 14.0 23.0 Valid Percent 26.0 14.0 14.0 23.0 Percent 26.0 40.0 54.0 77.0

54

From the above graph, it is clear that still 26 % people out of sample size expect fuel efficiency. Also 23% people except power & speed in their present car. This shows the changing trends in the mindsets of the Indians as they expect power & speed in their present car, also 14% each expect safety & maintenance cost in the present car.

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Which car do you have? * If someone wants to purchase a car, what would be your suggestion? Crosstabulation Count If someone wants to purchase a car, what would be your suggestion? O t h Hyundai Maruti Alto Which car do you have? Maruti 50 Alto Hyundai 0 Santro Tata 6 Indica i10 Zen Estilo Other Total 0 0 0 56 6 4 2 60 0 0 0 24 22 4 0 36 0 8 0 14 0 0 10 10 28 16 12 200 4 22 8 4 0 44 26 0 2 0 0 28 18 2 0 2 0 72 Santro Tata Indica i10 e Zen Estilo r Total

From the above crosstabulation, the maruti alto was owned by 72 people, out of which 50 people were suggesting the same to the other people, 18 were suggesting hyundai santro. Also 28 santro car owners were suggesting to 26 people to buy santro, 28 hyundai i10 car owners were suggesting to 22 people to buy i10.

This shows the perception of various car owners about their own car. As maximum of them were suggesting the same brand they have, this shows their satisfaction with the brand.

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CHAPTER - 6 CONCLUSIONS

The Indian car market currently appears to be at a crossroads, where car marketers are attempting to change customer perceptions of their brands and where specific buying motivations appear to be replacing generalities. The mindset of the Indian consumer is such that he is delighted if he buys a pen a little cheaper than his neighbor. Things are, however slowly changing and customers at the upper end of the market are now ready to pay for more. I hope that this approach will soon enter the B-segment car segment maybe not with the same intensity. Success will largely be determined to the extent a company can differentiate itself in term of intangibles that go with a car. Thus,

57

success could well hinge on the best of bundle of service that a carmaker can provide. Family needs reign supreme as a reason for car purchase.

Surprisingly, many car owners bought their car as it suited their lifestyle and personality. Family is the focal point of a car purchase. Family needs are exactly what the B-segment size car should fulfill. The decision to buy a car is a collective one made by the whole family. The car is bought not to fulfill the needs of one particular family person but to cater to the entire family's needs. Therefore the B-segment size car should be a family car which can satisfy the needs of the B-segment family. In order to attract these people to a new purchase, companies must hit them at the above point. It should be projected to fit into the

lifestyle of these people or rather better their lifestyle. People consulted by car owner/non car owner before car purchase. Potential car buyers consult family the most. They tend to obtain information from people already owning the car. The reason could be that, they are a little apprehensive about the purchase and want to quench their anxiety. Car owners also tend to consult these people but their number is appreciably less than the non-car owners. Although the family is the most consulted, before making a purchase decision, none of the factors can be ignored. People already owning a particular car is also consulted by a large number of potential buyers. Companies should make sure that the early buyers of the B-segment car are completely satisfied by the 58

car's performance. These early buyers act as information sources for the followers. Any negative publicity on their part may turn away the potential customers. Dealers are one of the most important sets of people for companies. These are the people who directly

communicate with the customers. Therefore companies should make sure that these people are highly motivated, knowledgeable, and friendly and customer oriented. The car owners as well as non-car owners are most influenced by newspaper and magazine ads and reports. Word of mouth publicity cannot be ignored. Most of the respondents use personal resources to obtain funds for the car purchase. Most of these people save money for a long to collect the required amount. There is lot of emotional attachment

when a car is bought from personal funds and Companies should duly, provide value for money for people in terms of low maintenance costs, fuel efficiency etc. A lot of banks are financing for cars. This concept is new but is catching fast in the big cities. Companies have tied up with ICICI and Standard Chartered bank to come up with joint schemes for car finances for the B-segment car. Accessorized Indians also strongly consider factors such as resale value, after sales service, and tend to be the only segment that will buy a new car from a trusted dealership near where they live or work. This group of consumers also like reading a great deal about the cars that they are about to buy and are also most likely to pay the most attention to what experts have to say about their choice of cars. 59

It can be seen that nearly half of the car owners want to replace their existing cars with a B-segment size car. This attitude could be due to additional features in the new cars, which may attract these people, or the non-performance of their existing car may compel them to replace the car. The price of the B-segment car should be competitive. It should be within the reach of the common man. Price is the first and major

hurdle, which a customer has to jump over before making a purchase decision Too high a price may discourage many potential car buyers and a very low price may raise doubts about the car" performance capabilities. The main reason for popularity of the B-segment car is normal price; companies should also make the car competitive in terms of price. It should be easy to drive in traffic conditions and on empty roads, should have low maintenance cost, should be fuel-efficient and fulfill B-segment family needs.

CHAPTER - 7 RECOMMENDATIONS
With private and public investments in infrastructure, further reduction in customs and excise duties, cuts in interest rates and new credit policies, the demand for automobiles is 60

expected to increase exponentially. There is long term potential to develop the Indian market for fuel efficient clean energy products in line with the regulatory environment and emission norms being put in place. The customer today is extremely discerning both in terms of quality and performance. So car companies must concentrate on this front to gain an edge over the competitors. After sales service is the buzzword in the consumer durable market. These days every person wants to know about the Car

after sales service provided by the manufacturer.

manufacturers needs to develop such after sales service centers in various parts of India and it should intelligently divide the areas so that no area remains uncovered. In the auto business worldwide, the money comes in from trucks and big vehicles like sports utilities. Cars - especially Bsegment cars - either lose money or just about earn. In India, too, it is much the same story these days. Except for Maruti, which had historical advantages, which helped it gain sufficient volumes, no other car manufacturer is making any money. In Bsegment cars, because of the cutthroat competition, margins are wafer thin. Third most important thing for the B-segment car

manufacturers are to keep in mind that India is a price sensitive market. The car war in the market has led to a start of price 61

wars in the market and has left customers with various options to choose from. The majority of people are now straightaway thinking of buying a new car as their first car purchase. About 61% of the people constitute of those who do not possess any car and are going for B-segment car purchase. Now thinking that this is the right time to go for it since the manufacturers are offering maximum for the minimum price. So, it must review its pricing strategy every now and then so that it does not lose to competition.

REFERENCES

http://www.automotive-business-review.com/article_news.asp? guid=9C9212C2-CF3A-4468-86B2-84B49CCF8795 Anand M., Ramanathan S.K. and Viswanath R., The New Laws of Attraction, Business World, 22 January 2007 Kotler P., Keller K.L., Koshy A & Jha M. (2007), Marketing Management, 12th edition, Prentice Hall. Mitra, Kushan (2007, Autos Big Boom, Business Today, October 22, 2007 Loudon & Della Bitta (2006: Consumer Behaviour (Concepts & Applications); McGraw Hill Inc., Singapore

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Schiffman G. Leon & Kanuk Leslie Lazar (2006, Consumer Behaviour, Pearson Education Majumdar, R. (2006), Product Management in India, Second Edition, Prentice Hall, pp. 257-267. http://economictimes.indiatimes.com/articleshow/589352.cms Bisht, Sudhir Why the Rs 1-lakh car is not good for India http://inhome.rediff.com http://www.businessweek.com/globalbiz/content/sep2006/gb2006092 6_662135.htm Doval, Pankaj and Leishemba, Rajkumar (2006), Auto sector zooms ahead in 2006http://ia.rediff.com/money/2006/dec/20auto.htm Top Gear, Day of Diesels, Vol 2, Issue 8, April 2008. http://business.mapsofindia.com/automobile/car-manufacturers/smallmarket.html

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APPENDIX QUESTIONNAIRE

Q1

Which car do you have? 1. Maruti Alto Zen Estilo 2. Hyundai Santro 3. Tata Indica 4. i10 5.

6. Other.

Q2

Do you relate Social Recognition Factor with usage of car? 1. Yes 2. No

Q3

Who in your opinion, exerted greatest influence on your

purchase decision? 1. Family Members 2. Friends 3. Advertisement 4. Experts 5. Dealers 6. Other.

Q4

Which of the following attributes had important bearing

in your Buying decision? 1. Economy with regard to fuel efficiency. 2. Quality with regard to Performance. 3. Convenience with regard to availability. 64

4. Other.

Q5

What do you expect from an Economical Car? 1. High Fuel Efficiency. 2. Less Initial Cost. 3. Low Maintenance Cost. 4. High Resale Value. 5. Other.

Q6

Which aspect of Quality do you look in your Car? 1. Mileage 2. Brand 6. Resale value 3. Safety 4. Service 5. Design

Q7

While buying small Car which aspect of Convenience

influenced you most? 1. Good after Sales Service 2. Availability of Car 3. Easy Availability of Spare 4. Colour Choice 5. Other.

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Q8

If someone wants to purchase a Car, what would be your

suggestion? 1. Maruti Alto Zen Estilo 6. Other. 2. Hyundai Santro 3. Tata Indica 4. i10 5.

Q9

What new features would you expect in your present

brand of Car? 1. Fuel Efficiency 2. Maintenance Cost 3. Safety 4. Power & Speed 5. Better after Sales Service 6. Other.

PERSONAL DETAILS

1.

OCCUPATION Pvt. Service

1. Business

2. Government Service 3.

4. Student 5. Other.

2.

MARITAL STATUS Married Couple

1. Bachelor

2.

3. Family with Children

4. Other 66

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