A PROJECT REPORT ON BUYING BEHAVIOR TOWARDS BIG CARS Submitted to

In requirement of partial fulfillment of Master of Business Administration (MBA) Submitted on

Submitted by

PREFACE
As a part of the curriculum of the MBA Program of the _________________, the students are required to undergo project work in addition to their theoretical study so as to enable them to have the knowledge of the practical aspect of the Business Administration. As students of management it is learning experience to analyze an industry. It is the most essentials tools for us to expose our skill as a future responsible managerial post. So, I decided to take a project on automobile industry. I chose big car in automobile industry for the project. It helps us to develop our skill & confidence to do better in all respect in management fields. The knowledge of management is incomplete without knowing the practical application of the theories studied. This grand project provides golden opportunity for all students especially when the management students do not have perfect understanding of the working of unit. The report contains the detail information about comparative study of consumer behavior towards purchase of big cars. What are the factors taken into account while purchasing big car. I have tried my best to get the necessary information for project which includes secondary as well as primary data.

ACKOWLEDGEMENT

This report has been submitting in partial fulfillment of the requirement of the award of M.B.A. from _____________________________________ It is a universal fact that for study of a project in depth, I need the support of many people right from the stage of conceiving the idea to completion of report. It is difficult for a single person to do the job efficiently without interaction & involvement of others. I take this opportunity to thank ________________________our director ____________ and our inspiration our guides, _______________________ For giving me Valuable Guidance and providing facilities to successfully complete my Grand Project. I am grateful to other faculty members of ___________for their support whenever required. Discussions with friends also have served to provide sought after information. I am thankful to all our batch mates. Finally I am thankful to my parents and Lord Almighty without whose blessings tasks are incomplete.

TABLE OF CONTENT

SR. No.
1 2 3 4 5 6 7 8 9 10 11 12 13 14

PARTICULAR
Executive Summary Introduction Time line of Indian Automobile industry Companies production facility in India Market players and their products Future plans of major market players Consumer behavior model Research Methodology Data Analysis and interpretation Findings Recommendations Limitations Bibliography E Questionnaire

PAGENO.
5-7 8-14 15-16 17 18-29 30-40 41 44-46 47-61 62 65 66 67 68

EXECUTIVE SUMMARY

The Indian economy is expected to grow by 6 percent in the current fiscal and slip further during the next year said the Economist Intelligence unit, a research arm of UK based financial magazine- The Economist. With a population of over one billion and an economic growth at 9% per annum. India is the hub for business. The automobile sector is one of the core industries of the Indian economy as it contributes 4% of our GDP and 5% of total industrial output, but it is set to grow much faster than the rest of the economy.

Until the mid 1990s, automobile industry in India consisted of just a handful of local companies with small capacities and obsolete technologies. Nevertheless, after the sector was thrown open to foreign direct investment in 1996, some of the global majors moved in and, by 2002 Hyundai, Honda, Toyota, General Motors, Ford and Mitsubishi set up their manufacturing base.

Over the past 7-8 years, the country has seen the launch of several domestic and foreign models of passenger cars, multi-utility vehicles (MUVs) and commercial vehicles and a robust growth in the production of all kinds of vehicles. Moreover, owing to its low cost high quality manufacturing, India has also emerged as a significant outsourcing hub for auto components and auto engineering design, rivaling Thailand.

6 In India there are many automobile companies from different countries and there is a very tough competition between these companies and this is going to be more tougher as many new cars of these companies are going to be launched in coming years. For marketers it is a big investment game where they can only reduce their cost by acquiring customers and retaining them. To enable the marketers with a ready reckoner to understand the factors, which influence customers while buying a car, the study was undertaken.

The project starts with the history of automobile where there were only two market players and it points out the reason which leads to the development and enormous growth of the Indian automobile industry. It also states the recession effect on the Indian automobile industry in the year 2008.

The project states the major players in the Indian market, time line of Indian automobile industry, there production facilities situated at various places and their future plans. The Engle, Blackwell and Miniard model of consumer behavior is also used in the project in order to study the consumer buying process from information search to outcomes of the purchase.

In order to know the buying behavior and main motivation behind the purchase of car, an exploratory research was conducted with the dealer and a questionnaire was prepared for the customer with a sample size of 120.

After analyzing the data collected from respondents it was found that owners of this segment prefer to buy the car which has very good brand image, superior engineering

7 and which carries a high degree of reliability. For some it is a way to show their status and for many it is a luxury. Factors like Income, gender, age, city and type of family plays an important role in influencing customers while buying a car. As far as type of family is concerned, this study takes only nuclear family. There are two reasons for this. First is that it would be difficult to locate a joint family, as they are on the decline. The second is that it would be operationally infeasible to map the purchase behavior in a joint family because of its inherent complexity and time constraints.

What is crucial to the marketer here are the number of alternatives that a customer evaluates or considers. The greater the number of additional alternative available in the market, the expected probability to switch to the other is higher.

INTRODUCTION
For sixty years since Indias independence, the Indian car market was dominated by two localized versions of ancient European designs the Morris Oxford, known as the Ambassador, and a old Fiat. This lack of product activity in the Indian market was mainly due to the Indian government's complex regulatory system that effectively banned foreign-owned operations. Within this system (referred to informally as the "license raj"), any Indian firm that wanted to import technology or products needed a license/permit from the government. The difficulty of getting these licenses stifled automobile and component imports, creating a low volume high cost car industry that was inefficient, unprofitable, and technologically obsolete. The two dominant products Ambassador and Fiat, although customized to the poor road conditions in India, were based on a stale design concept (with outdated features), and were also fuel inefficient.

Then came the abolition of license raj. In 1993, the government followed up its liberalization measures with significant reductions in the import duty on automobile components. These measures have spurred the growth of the Indian economy in general, and the automotive industry in particular. Since 1993, the automotive industry has been experiencing growth rates of above 25%.

The automobile industry in India- the tenth largest in the world with an annual production of approximately 2 million units is expected to become one of the major global automotive industries in the coming years. A number of domestic companies produce automobiles in India and the growing presence of multinational investment, too, has led to an increase in overall growth. Following the economic reforms of 1993

9 the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.

It is expected that by 2030, the Indian car market will be the 3rd largest car market across the globe. Small cars seem to be ruling the roost in the Indian automobile market with over 7.5 lakh small cars being sold in India in 2009-10. 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.

The liberalization policies followed by the Indian government had been inviting foreign investors and manufacturers to participate in the car market in India. The recent trend within the new generation to get work in the software based sector has led to the rise in the income level and change in the lifestyle which has further led to the increase in the demand for different varieties of cars among them. Moreover, there are many financing companies providing easy car loans at reasonable interest rates and affordable installments.

The car Market in India is crowded with all varieties of car models like the small cars, mid-size cars, luxury cars, super luxury cars, and sports utility vehicles. Initially the most popular car model dominating the Car Market in India was the Ambassador, which however today gave way to numerous new models like Maruti, Fiat, Hyundai, BMW, and many others. Moreover, there are many other models of cars in the pipeline, to be launched in the car market in India.

10

Estimations for the year 2010

In 2010 estimated rate of growth of India auto industry is going to be 9 percent. Auto industry in India has been hit hard by ongoing global financial recession. Sales figures of India automobile industry for December 2008 have shown devastating after effects of global financial slowdown.

However, in 2009 as there are certain factors working in its favor. India is blessed with a middle class, which is getting economically stronger with every passing day. This class is being touted as potential consumers for India auto industry in years to come.

Indian economy has been, more or less, able to withstand tremors of global financial meltdown. Even though its rate of growth has slowed down considerably, there are hopes of an economic revival. Work force of auto industry of India is relatively well trained. All these factors indicate that there could be a decent future for India auto industry in days to come.

India automobile market is likely to be in good shape in 2010. Much of this optimism results from renewed interest being shown in India auto industry by reputed overseas car makers. Nissan Motors, which is a well known Japanese car making company, regards India automobile market as a global car manufacturing hub for future.

Hyundai, a major automobile establishment of South Korea, has put in large sums of

11 money in India automobile market. As per its estimates, India auto industry could become a major center for small car manufacturing organizations in future.

There are some other automobile companies of world who have shown interest in India auto market. Major names among these are General Motors, Skoda Auto and Mercedes-Benz. These companies have major plans lined up for India auto industry and are likely to invest a huge amount of money in India automobile market.

A new reality is dawning in the market place. The continuous entry of new competitors and consequent increase in competition is exploding choice for the customers. The customer has become more discerning, more conscious of the choices available. The customer has started demanding value for money. The companies are learning to allow the customers to dictate specifications and quality standards.

The concept of Small cars, Sedans, Suvs and Muvs etc were alien phrases at one point in the Indian consumers mind space, eliciting nothing more than bewildered expressions and a confused huh? but the time has changed and consumers now know very well about this.

According to some analysts, a family becomes a potential car customer as soon as its annual income exceeds the price of the car.

In Indian context, a family with an annual income of Rs.2 lakh would be a potential car customer. According to NCAER, there are 40 million households in India with annual income between Rs.90000 and Rs.2 lakh. Only 4 percent of them own a car.

12

Thus, the potential for car sales is immense. With prices of small cars coming down in India, customers now prefer to buy new cars rather than second-hand ones. Financing for a second-hand car is also expensive at about 14 percent for a maximum tenure of four years, whereas the financing for new is at 8-9 percent for a tenure of 7-8 years.

The choices that a prospective car buyer has in present scenario are many and the automobile industry has achieved a remarkable growth in the last year.

Indias car market has emerged as one of the fastest growing in the world. The number of cars sold domestically is projected to double by 2010, and domestic production is skyrocketing as foreign makers are setting up their own production plants in India. The governments 10-year plan aims to create a $145 billion auto industry by 2016.

According to McKinsey, the auto sectors drive to lower costs will push outsourcing. The auto sector could be worth $375 billion by 2015, up from $65 billion in 2002. McKinsey thinks India could capture $25 billion of this amount. Out of 400 Indian suppliers, 80 percent have the ISO 9000 certificatethe international standard for quality management.

The production of automobiles in India is largely aimed at local consumers. Several Indian manufacturers also export a diverse variety of auto components. Experts predict a sale of 4.2 million four wheeler automobiles in India by 2015. Indian

13 passenger vehicle exports are also expected to rise from 170,000 in 2006 to 500,000 in 2010.

There are number of variables that are expected to play an importance role in this process. They are as following:

Income: Cars are products that are highly priced. In India affordability might probably be a deciding factor. As my study is based on big cars (Sedan, Suv and Muv), people having a good amount of income can only afford to buy these segment of cars.

Gender: Car purchase in India is one in which both husband and wife as a couple play a role so it is therefore necessary to consider it as a variable. These days even kid play an important role in purchase of cars.

Type of family: India has two type of families; Joint and nuclear. The purchase process in bound to be different in these two structures of families, as the number of influencers is going to be higher in the case of joint family. This study however takes only nuclear families as its universe. The reasons for it are that it would be difficult to locate a joint family, as they are on the decline. The second is that it would be operationally infeasible to map the purchase behavior in joint family because of its inherent complexities and time constraint.

City: The city in which the study in conducted would be influential. This is because each city has its own unique background, cultural mix and innumerable other

14 variables that would play a part in the purchase process. This study in conducted only in one city due to time constraint.

Age: This is another variable that has to be taken into account, as it would play an important role in purchase process.

Cars are usually high involvement purchase. In a developing country like India, it may also be a purchase of a lifetime. Theoretically, buyers of cars in India would be in a mode where there is high information search and final evaluation is on functional or performance attributes. Apart from advertisement, the information could be gathered from many other sources like the product experience, the context in which the car is bought, the behavior and helpfulness of the dealer or salesperson and so on. This will be generated in detail as the study progresses.

15

Timeline of Indian Automobile Industry:

1897 First Person to own a car in India- Mr. Foster of M/s Cromption Greaves Company, Mumbai

1901 First Indian to own a car in India Jamshedji Tata 1905 First Woman to drive a car in India Mrs. Suzanne RD Tata 1905 Fiat Motors 1911 First Taxi in India 1924 Formation of traffic police 1928 Chevrolet Motors 1942 Hindustan Motors 1944 Premier Auto Limited 1945 Tata Motors 1947 Mahindra Motors 1948 Ashok Motors 1948 Standard Motors 1974 Sipani Motors 1981 Maruti Udyog 1994 Rover Motors 1994 Mercedes Bens 1994 Opel 1995 Ford Motors 1995 Honda SIEL

16 1995 Reva Electric Car Company 1995 Daewoo Motors 1996 Hyundai Motors 1997 Toyota Kirloskar Motors 1997 fiat Motors (Re-entry) 1998 San Motors 1998 Mitsubishi Motors 2001 Skoda Auto 2003 Chevrolet Motors (Re-Entry)

17

Companies Production Facilities in India

Audi: Aurangabad, Maharashtra BMW: Chennai, Tamil Nadu Chevrolet: Halol, Gujarat Fiat: Pune(Ranjangaon), Maharashtra Ford: Chennai, Tamil Nadu General Motors: Talegaon (Pune), Maharashtra Honda: Noida, Uttar Pradesh Hyundai: Chennai, Tamil Nadu Mahindra: Nashik, Maharashtra, Kandivali, Igatpuri, Zaheerabadm Andhra Pradesh and Haridwar, Uttrakhand.

Mercedes-Benz: Pune, Maharashtra Skoda: Aurangabad, Maharashtra Maruti Suzuki: Gurgaon, Haryana, and Manesar, Haryana Tata: Lucknow, Uttar Pradesh, Pimpri (Pune) Maharashtre, Jameshpur, Jharkhand, Haridwar, Uttrakhand and Sanand, Gujarat

Toyota: Bangalore, Karnataka Tata Nano : Sanand, Gujarat

18

MARKET PLAYERS AND THEIR PRODUCTS

Maruti Suzuki

Maruti Suzuki India Limited is a probably listed automaker in India. It is a leading four-wheeler automobile manufacturer in South Asia. Suzuki Motor Corporation of Japan holds a majority stake in the company. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India and on 17 September 2007, Maruti Udyog was renamed Maruti Suzuki India Limited. The companys headquarters are in Gurgaon, Haryana (near Delhi).

Products

800, Omni, Alto, Gypsy, Swift, SX4, WagonR, Versa, Zen, Estilo, Grand Vitara, Swift, Dzire, Eeco, Ritz, A-Star

FIAT

Fiat S.P.A., an acronym for Fabbrica Italiana Automobili Torino(Italian Automobile Factory of Turin), is an Italian automobile manufacturer, engine manufacturer, financial and industrial group based in Turin in the Piedmont region. Fiat was founded

19 in 1899 by a group of investors including Giovanni Agnelli. Fiat has also manufactured tanks and aircraft.

Fiat based cars are constructed all around the world the largest concern outside Italy is in Brazil (best seller). It also has factories in Argentina and Poland. Fiat has a long history of licensing its products to other countries regardless of local political or cultural persuasion. Joint venture operations are found in France, Turkey, Egypt (with the state owned Nasr car company), South Africa, India and China.

Products

Uno (discontinued), Palio, Palio Stile, Siena (discontinued), Siena Weekend (discontinued), Petra (discontinued), Adventure, Fiat 500 sold in collaboration with Tata Motors, and Fiat Linea sold in collaboration with Tata Motors, Grande Punto

Tata

Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive Company), is a multinational corporation headquartered in Mumbai, India. It is Indias largest passenger automobile and commercial vehicle manufacturing company and a midsized player on the world market. It is a part of the Tata Group, and one of the worlds largest manufacturers of commercial vehicles. The OICA ranked it as the worlds 20th largest automaker, based on figures for 2006.

20 Tata Motors was established in 1945, when the company began manufacturing locomotives. The company manufactured its first commercial vehicle in 1954 in collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors is a duallisted company traded on both the Bombay Stock Exchange, as well as on the New York Stock Exchange. Tata Motors in 2005, was ranked among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In 2004 Tata Motors bought Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. It also acquired 21% stake in Hispano Carrocera SA, giving it controlling rights in the company. Tata Motor has launched Tata Nan with a price of Rs. 1,00,000 in January 2008.

Products

Indica, Indigo, Indigo Marina, Safari, Sumo, TL and Tata Nano.

Hyundai

Hyundai refers to a group of companies and related organizations founded by Chung Ju-yung in South Korea. The first Hyundai company was founded in 1947 as a construction company, and the Hyundai Group eventually became South Korea's largest conglomerate company (chaebol).

The best well-known Hyundai organization is the Hyundai Motor Company, the world's 6th largest automaker. Hyundai Heavy Industries is the world's largest shipbuilder, and Hynix is a top semiconductor producer. Other companies currently or

21 formerly controlled by members of Chung's extended family may be loosely referred to as a part of the Hyundai chaebol.

Products

Santro, Getz, i-10, i-20, Accent, Verna, Sonata, Elentra, Tucson

Honda

Honda Motor Company, Limited (is a Multinational Corporation, engine manufacturer and engineering corporation headquartered in Japan. The company manufactures automobiles, motorcycles, trucks, scooters, robots, jets and jet engines, ATV, water craft, electrical generators, marine engines, lawn and garden equipment, and aeronautical and other mobile technologies.

Hondas line of luxury cars are branded Acura in North America and Hongda in China. More recently they have ventured into mountain bikes.

Honda is the 6th largest automobile manufacturer in the world as well as the largest engine-maker in the world, producing more than 14 million internal combustion engines each year.

As of August 2008, Honda surpassed Chrysler as the 4th largest automobile manufacturer in the United States. Currently, Honda is the second largest manufacturer in Japan behind Toyota and ahead of Nissan.

22

Products Accord, City, Civic and CR-V

Toyota

Toyota Motor Corporation is a multinational corporation headquartered in Japan, and is currently the worlds largest automaker. As of 2009, Toyota employs approximately 316,000 people around the world.

In 1934, while still a department of Toyota Industries, it created its first product Type A engine and in 1936 its first passenger car the Toyota AA. The company was eventually founded by Kiichiro Toyoda in 1937 as a spinoff from his fathers company Toyota Industries to create automobiles.

Toyota currently owns and operates Lexis and Scion brands and has a majority shareholding stake in Daihatsu Motors, and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, Yamaha Motors, and Mitsubishi Aircraft Corporation. The company includes 522 subsidiaries.

Toyota is headquartered in Toyota City and Nagoya (both in Aichi), and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its Toyota Financial Services division and also builds robots. Toyota Motor Corporation (including Toyota Financial Services) and Toyota Industries form the bulk of the Toyota Group, one of the largest conglomerates in the world.

23

Products

Qualis (discontinued) 3rd generation Toyota Kijang, Camry 7th generation Toyota Camry (the latest generation Camry), Corolla 9th generation Toyota Corolla, Innova and Land Cruiser Prado VX latest generation Toyota Land Cruiser (PRADO).

General Motors

General Motors Corporation (GM) (NYSE:GM), the worlds second largest automakers, was founded in 1908 and today manufacturers cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 252,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. Up until 2009, GM was the worlds largest automaker, a title it held for 77 consecutive years until being surpassed by Toyota Motor Corporation in annual sales.

Products

Tavera- rebadged Isuzu Panthaer, Forester (discontinued) rebadged First Generation Subaru Forester, Aveo-second Generation Daewoo Kalos sedan, Aveo UV A fist

24 generaito Daewoo Kalos hatchback, optra- rebadged Daewoo Lacetti, SRV rebadged Daewo Lacetti, Spark formerly Daewoo Matiz in India, and Captiva recent launch in India.

Ford

The Ford Motor Company (NYSE:F) is an American multinational corporation and the worlds fourth largest automaker based on worldwide vehicle sales, following Toyota, General Motors, and Volkswagen. Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford, Lincoln, and Mercury brands, Ford also owns Volvo Cars of Sweden, and a small stake in Mazda of Japan and Aston Martin of England. Fords former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in March 2008.

Products

Escort, Ikon, fiesta, endeavour

Skoda

The origins of Skoda go back to the early 1890s where, like many long-established car manufacturers, the company started out with the manufacture of bicycles. It was 1894, and 26-year old Vclav Klement, who was a bookseller by trade in Mlad Boleslav, in today's Czech Republic, which was then part of Austria-Hungary, was

25 unable to obtain the right spare parts to repair his German bicycle. Klement returned his bicycle to the manufacturers, Seidel and Naumann, with a letter, in Czech, asking for them to carry out repairs, only to receive a reply, in German, stating: "If you would like an answer to your inquiry, you should try writing in a language we can understand". A disgusted Klement, despite not having any previous technical experience, then decided to start his own bicycle repair shop, which he and Vclav Laurin opened in 1895 in Mlad Boleslav. Before going into business partnership with Klement, Laurin was an already established bicycle manufacturer from the nearby town of Turnov.

When, by July 1945, the Mlad Boleslav factory had been reconstructed, production of Skoda's first post-WWII car, the 1101 series began. It was essentially an updated version of the pre-WWII Skoda Popular. In the autumn of 1945, Skoda (along with all large manufacturers) became part of the planned economy, which meant it was separated from the parent Skoda Company. In spite of unfavorable political conditions and losing contact with technical development in non communist countries, Skoda retained a good reputation until the 1960s, producing models such as the Skoda 440 Spartak, 445 Octavia, Felicia and Skoda 1000 MB. Skoda a is now known internationally for building very tough and reliable cars.

Products

Octavia, Laura, Superb, Fabia

Mahindra & Mahindra

26

Mahindra & Mahindra Limited is part of the US $6.7 billion Mahindra Group, an automotive, farm equipment, financial services, trade and logistics, automotive components, after-market, IT and infrastructure conglomerate. The company was set up in 1945 as Mahindra & Mohammed. Later, after the partition of India, Ghulam Muhammad returned to Pakistan and became that nations first finance minister. Hence, the name was changed from Mahindra & Mohammed to Mahindra & Mahindra in 1948.

Initially set up to manufacture general-purpose utility vehicles, Mahindra & Mahindra (M&M) was first known for assembly of the iconic Jeep in India. The company later branched out into manufacture of light commercial vehicles (LCVs) and agricultural tractors, rapidly growing from being a manufacturer of army vehicles and tractors to an automobile major with a growing global market.

At present, M&M is the leader in the utility vehicle (UV) segment in India with its flagship UV, the Scorpio (known as the Mahindra Goa in Italy).

Product

Armada (discontinued), Voyager (discontinued), Bolero, Commander, CL, MaXX, Scorpio and Mahindra and Mahindra Classicoducts.

Mercedes-Benz

27

Mercedes-Benz is exclusively made for Dr. Robert Shkreli, owner of Villa Shkreli, who is known for being a savvy businessman across the world. He owns several properties across Ulqin and Vuksanaj. He currently sold his land for a record 10 million dollars. He also has a extreme interests in cars as you can tell with his red Bentley, S 65 AMG, and Bullet Proff E-Class.k.pany, Daimler AG (formerly Daimlerchrysler AG), after previously being owned by Daimler-Benz.

Mercedes-Benz has its origins in Karl Benzs creation of the first automobile in January 1886, and by Gottlieb Daimler and engineer Wilhelm Maybachs conversion of a carriage by the addition of a petrol engine the same year.

The Mercedes automobile was first marketed in 1901 by Daimler Motoren Gesellschaft. The first Mercedes-Benz brand name vehicles were produced in 1926, following the merger of Karl Benzs and Gottlieb Daimlers companies into the Daimler-Benz company. Mercedes-Benz has, over the years, introduced many technological and safety innovations that have become common in modern vehicles.

Products

C-Class, E-Class, S-Class, ML-Class, SL-Class, SLK-Class, CLK-Class, GL-Class and CLS-Class

B.M.W.

28

After World WAR I, BMW were forced to cease aircraft (engine) production by the terms of the Versailles Armistic Treaty. The company consequently shifted to motorcycle production in 1923 once the restrictions of the treaty started to be lifted, followed by automobiles in 1928. The circular blue and white BMW logo or roundel is portrayed by BMW as the movement of an aircraft propeller, to signify the white blades cutting through the blue sky.

An interpretation that BMW adopted for convenience in 1929, twelve years after the roundel was created. The emblem evolved from the circular Rapp Motorenwerke company logo, from which the BMW company grew.

The Rapp logo was combined with the blue and white colors of the flag of Bavaria to product the BMW roundel so familiar today.

The early success of the outstanding BMW IIA inline-six aviation engine, from 191718 in World War I, with the Luftsteritkrafte in a limited number of Fokker d. VII fighters, as well as a number of prototype inline-six fighters from various manufacturers, might have actually influenced the BMW logos design.

Products

3 series, 5 Series, 6 Series, 7 Series, X3 and X5

Mitsubishi

29

Mitsubishi Motors Corporation is the fifth largest automaker in Japan and the fifteenth largest in the world by global unit sales. It is part of the Mitsubishi keiretsu, formerly the biggest industrial group in Japan, and was formed in 1970 from the automotive division of Mitsubishi Heavy Industries.

Throughout its history it has courted alliances with foreign partners, a strategy pioneered by their first president Tomio Kubo to encourage expansion, and continued by his successors. A significant stake was sold to Chrysler Corporation in 1971 which it held for 22 years, while DaimlerChrysler was a controlling shareholder between 2000 and 2005. Long term joint manufacturing and technology licencing deals with the Hyundai Motor Company in South Korea and Proton in Malaysia were also forged, while in Europe the company co-owned the largest automobile manufacturing plant in the Netherlands with Volvo for ten years in the 1990s, before taking sole ownership in 2001.

Products

Lancer- Sixth generation Mitsubishi Lancer, Cedia Seventh Generation Mitsubishi Lancer, Pajero Second Generation Mitshubishi Pajero, Montero third generation Mitsubishi Pajero, and Outlander.

30

FUTURE PLANS OF MAJOR MARKET PLAYERS

Maruti Suzuki Splash:

The next generation WagonR- the splash is ready! Suzuki unveiled its splash MPV (Multi Purpose Vehicle) in the Frankfurt Motor Show. First unveiled as a concept car in 2006 paris motor show, the splash has been put into production in Magyar Suzuki Corporation in Hungary. The Splash is the fourth new model for the Maruti Suzuki after the launch of Swift, Grand Vitara and SX4. Splash which the Splash is based on a shortened version of the Swifts platform will be the natural choice for the Maruti suzukis next small car in India.

Maruti Suzuki splash may have the choice of three engines two petrol and a diesel. An 1.0-litre 3-cylinder petrol unit producing 65 PS (48 kW) and a 1.2-litre 4-cylinder petrol engine developing 86 PS (63 kW) will power the splash. Both the petrol engine have four-valve-per-cylinder. Maruti Suzuki swifts 1.3-litre DDIS may also be strapped into the new splash. All three engines are combined with a 5-speed manual gearbox. The 1.2L petrol splash feature an optional 4-speed automatic transmission. All the engines of the splash are Euro4-compliant. Acccording to Suzuki, Splash is a multipurpose vehicle that will likely appeal to those with small families and a limited budget.

31

HYUNDAI I30

Choosing a Hyundai used to mean buying on a budget but things have changed of late. Although the Korean company still offers value for money, its new family flagship, the i30 Premium, costs 16,595. But is it really worth the outlay? Described as a well equipped alternative to Fords Focus, the top-spec model goes up against some classy competition. But with a torquey diesel and luxurious spec, its ready to take on the most capable rivals. Theres no doubt that the i30 looks the part in flagship trim. Alloy wheels with chrome inserts complement the neat rear and profile styling. Only at the front does the Hyundai look a bit less attractive.

Power comes from a 138bhp 2.0-litre diesel that delivers 304Nm of torque. It offers decent refinement and plenty of mid-range punch, but under hard acceleration and at lower speeds, it cant match the smooth nature of units such as Hondas acclaimed 2.2-litre i-CTDi.

Its better on the motorway, though, where the six-speed gearbox makes the most of the units flexible power delivery. The shift is accurate, and drivers who cover long distances will certainly benefit from the reduced engine revs at cruising speeds.

However, for most buyers the cheaper 1.6-litre diesel will be a better bet. That unit

32 returns 60.1mpg and emits 125g/km of CO2, which beats the larger engine by 8.7mpg and 20g/km respectively. Whats more, it costs 1,000 less to buy.

Honda Jazz

The Jazz will be a premium segment hatchback and we do not expect that it will overcome the sales number of the City sedan in India. Masahiro Takedagawa, president and CEO of the companys subsidiary Honda Siel Cars India, said, when asked whether the new car, that would mark the companys entry in the volumesegment, become its leading brand for sales. Honda is currently grappling with the problem of making Jazz (which would sport a 1.2-litre petrol engine), pricecompetitive for the Indian market. The Jazz is priced higher than the City in many foreign markets, but still manages to see more, as Mr. Takedagawa said.

However, the Indian market is price conscious and analysts point out that people may not be very eager to pay a big price for a hatchback, despite its luxury and safety features. Takedagawa, however, said he was not worried about the premium tag associated with the Jazz. The price or premiumness will be determined by the customer. We are confident that the model will be well accepted in India, he said.

The City sedan currently sells for Rs 7.5-8.6 lakh (ex-showroom Delhi) and averages around 5,000 cars in monthly sales. The Jazz would share the platform and many components with City, making it easier for Honda to source the inputs in bulk at competitive prices and keep localisation at over 70% initially.

33

Jazz gets the premium tag due to the companys focus on making it luxurious and safe by adding features like airbags, ABS (anti-lock braking system) and G-CON Technology (an advanced passive shielding that offers the occupant a survival zone in case of an unavoidable collision). Honda, however, believes that customers would be willing to pay for the additional features.

FORD Focus

Ford India, the local arm of the US-based automobile giant, is getting set to roll out its fourth offering after Ikon, Mondeo and sports utility vehicle Endeavour in a bid to scale up its volumes in the domestic market.Ford Focus Company officials are tightlipped about the new car. All they are ready to reveal at this juncture is that the new model - developed globally with India-specific inputs - should draw similar volumes as the Ikon, its flagship model in India. "We would want the new model to make its debut here with a localisation of around 70%. We hope it brings in volumes in line with the domestic sales of Ikon," Ford India vice president (marketing and external affairs) Vinay K Piparsania told The Economic Times.

Ford, market observers feel, could zero in on its best selling model, Focus, in the Indian market to bridge the gap between the Ikon and the Mondeo. "Our new model will be positioned a notch below the Ikon, or between the Ikon and the Mondeo. At this juncture we won't be able to comment on its exact positioning," Piparsania said.

Ford India, which aggregated domestic sales of 18,600 units in the last calender year,

34 sold 1,903 units of the Ikon in January `04 and 2,028 units last month. Exports of the Ikon during January-February `04 stood at 3,498 units.

Company officials however rule out the introduction of a small car in the already crowded B segment saying that it may not be "feasible" cost-wise. While the various versions of the Ford Ikon carry a price tag of Rs 5-8 lakh, the top-end Mondeo, which is imported as completely built units, costs around Rs 17 lakh. Ford India, which has an installed capacity of 50,000 units at its manufacturing facility near Chennai, is meanwhile beefing up its distribution network on the eve of rolling out its new model. "This year our target is to increase the number of distribution outlets to 105 (90 last year) in 85 locations," Piparsania said. Ford India is also aggressively hawking its sports utility vehicle Endeavour, which has sold 501 units late last year. The company is targeting to sell 170-180 units of the SUV every month in the current calendar year.

Toyota

Bangalore/New Delhi: Its finally official. Toyota will have as small car in its Indian line-up in two years. And the car will be produced at its Bidadi facility near Bangalore. After being a fringe player in the fast-growing market for years, the worlds No. 2 car maker on Friday announced a Rs 1,400 crore fresh investment for a new factory to launch a new strategic small car in the Indian market by 2010.

The car currently being developed in Japan will meet the broad needs of customers in India. However, we will also export the car from India, K K Swamy, deputy managing director of Toyotas Indian subsidiary Toyota Kirloskar Motor (TKM), told

35 TOI. Toyota is unlikely to want to compete in the Tata Nano segment, but the new car is expected to be as per the small car definition specified by the Indian government to enjoy the lower 12% excise duty, as against the 24% on big cars. Swamy declined to answer questions on the price point for the car. The new plant is expected to generate direct employment of 1,800 to 2,000 people. But including that of our suppliers, we expect the total fresh employment to be close to 7,000, Swamy said.

The existing plant, which manufactures the Corolla sedan and the multi-utility vehicle Innova, employs 2,700 people. The company also imports the Camry luxury sedan and the Prado. TKM currently uses only 120 acres of the total 430-acre plot it has in Bidadi. Swamy said that along with the new plant there would be additional investments in ancilliary services, a power plant, a new office building and a parking yard for manufactured vehicles. Toyota is believed to have zeroed in on key vendors for the project and Swamy said the company planned to start with an initial production capacity of 1 lakh passenger cars. While much of it would be for the small car, we will also manufacture the Corolla in the new plant, he said. Toyotas small car plans in India come just when existing domestic heavyweights like Maruti-Suzuki and Hyundai are strengthening operations and others like Honda and Volkswagen are planning to launch compacts. Compacts account for around 70% of car sales. Speculation about a Toyota small car started almost three years ago, when it was said to be considering introducing a car from its associate company Daihatsus stable.

Toyota has an 89% stake in its Indian joint venture while the rest is held by the

36 Kirloskars. Swamy declined to say whether the new investments will come in the same proportion. He said some of the key suppliers were considering to invest around the Bangalore plant and pointed out that the company planned to have a high local content for its compact to make it competitive in the price-sensitive market. The companys existing plant has a capacity of around 63,000 units. It sold 55,403 units in India in 2007-08 and had a low 3.5% share of the passenger vehicle market.

BMW F13

The present generation 6 series isnt exactly a pretty car (mind you, i just love it!), but the opinion is divided. With the latest generation 7 series going a bit conservative, you might be tempted to think that other models would follow suit. The camo gives very less away and is cleanly covered giving nothing away. The next generation BMW 6 Series, dubbed F13 and due to be launched in 2010, has been spotted in Munich.

The test mule comes as a surprise as two years before the official launch, the test mules are usually equipped with heavy plastics that fake the real shape of the car, but in this case, BMW is at a stage where theyre using the now-famous patterned camouflage.

There are a few things we know about the F13 at this moment, BMW will not be drastically changing the current successful design, it will be longer than the current model, the headlights will be similar to the ones on the CS Concept, but will not have the circular cut out, just a straight across slit.

37 The driver-oriented cockpit will make its return as seen in the new 7 Series and most likely, there will be a hardtop similar to the ones in the 3 Series cabs. As far as the engine line-up, its still too early to speculate, but we will definitely see a more powerful engine in there along with BMWs new eight-speed automatic gearbox. Also expected are BMWs strong diesel versions. This would make a lot of sense in India as the only options available are the 4.0l V8 and the M6 with 5.0l V10.

Mercedes Benz F700

Mercedes Benz, plans to introduces a pack of new and high-end luxury cars in India with highly creative designs, astonishing technologies, and unmatched standards. The company is working on to design and produce path-breaking car models that holds the power to revolutionize the luxury car market in India. Till date, all the car models introduced by Mercedes including the Mercedes-Benz E-Class, Mercedes-Benz CClass, and Mercedes-Benz S-Class are the perfect reflection of innovation, technology, and advancement.

In future, the company also has plans to bring in the F700, a low-emission petrol concept, which made its debut at the 2007 International Motor Show. The car was showcased with the new DIESOTTO drive system that emits only 127 gm/km of carbon dioxide. Another great characteristic of the car is the fuel-consumption of only 5.3 litres/100 km, which is extremely low for a car in this segment.

The F700 also comprises the worlds first PRE-SCAN suspension with two laser scanners that are capable to gauge the road ahead of the car for bumps and rough

38 spots. In addition, a virtual assistant car technology christened as Avatar also adds to the charm of this future car model. This innovative technology communicates all the required information with the driver. Though, there are no final dates for the launch of this car in India or in the global market, Mercedes looks ahead to introduce similar concept cars with improved technologies and features.

SKODA YETI

Finally Skodas Yeti has come out of hiding! Following last weeks spy shots, Skoda has pulled the wraps off its first-ever off-roader at the Geneva Motor Show.

It comes with front or four-wheel-drive, and aims to appeal to people who dont want a full-on off roader. The Yeti is similar in size to the Roomster supermini-MPV, and is just as practical inside, with up to 1,760 litres of boot space. In the front, the raised seating position should provide drivers with a great view of the road ahead.

Under the bonnet, buyers will be able to choose from a wide range of turbocharged engines. The petrol line-up kicks off with a front-wheel-drive 104bhp 1.2 TSI model, and is topped off by a 4x4 158bhp 1.8 TSI version.

Chevrolet Malibu

The 2009 Chevrolet Malibu ranks 1 out 23 Affordable Midsize Cars. This ranking is based on our analysis of 66 published reviews and test drives of the Chevrolet Malibu, and our analysis if reliability and safety data.

39

Since its 2008 redesign, the Chevrolet Malibu has been the surprise of the automotive world. The car has won praise for its stylish good looks, spacious, well-designed and sharp passenger cabin, solid safety and driving dynamics that impress many who think they know GM products. The 2009 Chevy Malibu is competing with perennial class-leaders like the Honda Accord and Toyota Camry and in many cases, its beating them out.

The automotive press has grown accustomed to family sedans that offer some of the charms of sports, sedans, some of the amenities of luxury cars, and some of the economic advantages of yesterdays midsize cars. But auto writers seem pleasantly surprised to find one wearing chevys bowtie badge. The 2008 Malibu took home a trunkful of awards from the press one of the Car and Drivers 10Best, North American car of the year at the North American International Auto Show in January 2008, Kiplinger magazines Best in class, Automobile Magazines 2008 Automobile All-starts the list goes on and on.

The Malibu now threatens the tradition favourite in this class. Its a viable alternative to the popular Honda Accord and Toyota Camry, and should be on your test drive list before you put money down on either of those. If you're looking for something more exciting, however, many find the all-new 2009 Mazda6 a more enthusiastic ride, particularly in corners, and a better-looking car.

Because of the success of the 2008 model, Motor Trend reports, Chevrolet "purposely kept the 2009 model year changes to a minimum. The most noteworthy include an

40 expanded offering of the fuel-wise 2.4L/6-speed automatic powertrain combo, four new exterior colors, and the addition of Bluetooth with the new OnStar 8.0 system."

Chevrolet has also taken steps to improve the Malibus fuel economy for 2009, reacting to a market in which most consumers are concerned about high gas prices. If fuel economy is an important consideration to you, keep in mind thats 2009 Chevrolet Malibu Hybrid is also available and is received separately.

The 2009 Malibu is available in four trim levels, with a choice of two engines and three transmissions.

To Chevrolets credit, even the most well-appointed LTZ trim level is available with the most fuel-efficient powertrain a 2.4-litre four-cylinder engine and a six-speed transmission. Many of the Malibus rivals couple their highest trims only with their thirstiest engines.

41

CONSUMER BEHAVIOR MODEL

Need Recognition Internal Search Search Alternative Evaluation Memory Acceptance Retention Purchase Individual differences Environment influences

Exposure Attention Stimuli Marketer dominated Other Comprehension

Outcomes

External Research Dissatisfaction Satisfaction

The Engel, Blackwell and Miniard model of consumer Behaviour

This model was chosen as it is applicable when the objective is to gain a holistic understanding of the purchase process. In this study, it was employed as a framework to look at car purchase and to emphasis the flow of information. A brief description of the model is as follows:

The initial stage in the decision process is need recognition. There are three determinants of need recognition: 1) information stored in memory, 2) individual differences 3) Environmental influences

42 This step is followed by an information research process. Internal search into memory is done first to determine whether enough is known about available options. External search will usually be required when this is not the case.

For this to happen, information and persuasive communication must reach the consumers. This is called exposure. This information then captures the consumers attention. This is more likely to occur when the incoming message relevant. If attention is attracted, the message is further analyzed against categories of meaning stored in memory resulting in comprehension. The incoming message is then compared against existing beliefs, attitudes and other factors stored in the memory. Any or al of these may be modified as a result, leading to acceptance.

Alternative evaluation is concerned with the evaluation of different products. At this stage consumer compares all the available options which he/she can purchase.

This process culminates in purchase. Most often, this takes place in some type of retail outlet. Alternative evaluation does not cease with purchase. It continues and results in various outcomes. If expectations are matched, the outcome is satisfaction. Otherwise dissatisfaction arises. Both these outcomes have further effect on the decision process as shown in the figure. A products failure to perform will not be accepted easily, especially when the purchase is of high perceived importance. Even the after sales service plays a very important role.

Companies can use this model in the following way:

43 1. Need recognition At first stage company can generate the need nu stretching their advertisement on ego needs, luxury needs or any other need which can induce the consumers to go for the purchase of big cars. 2. Information search Once the need is generated, consumer will do information search. At this stage company should do advertise in several medias like television, news paper, internet, magazines, etc. Advertisement is very important because by this consumers get to know about products and its brands.

3.

Evaluation of alternatives: At this stage consumer evaluates the product with several other products. Therefore company should do comparative advertisement, should offer a test drive at consumers place, etc. which helps the consumer in evaluation process.

4.

Purchase At this stage in order to attract the consumer, company should give attractive financing options, as most of the consumers purchase the car on loan.

5.

Outcomes of purchase In order to satisfy and remain the customer company should give excellent after sales service, should give 24 hrs on road service and every other possible assistance to the consumer.

44

RESEARCH METHODOLOGY

The Indian market is growing rapidly and the rate at which the consumption of brands and products are increasing is alarming. Consumers now have a lot more options as compared to ten years back and this affects the entire purchase process that they undertake to decide on product or brand purchase. Some of the markets which have shown tremendous growth in the last few years are the automobile market, high-end electronics and consumer durables. Automobiles are considered lifetime mates and thus provide a good study.

The purchase behavior of the consumers differs greatly across the many products categories that they invest in. from something that is FMCG product to a high-end electronic white good, the purchase behavior and the attributes involved are vastly different. Consumers go through many stages of the decision process, like the identification of the need, the information processing, learning process, identifying brand choice, purchase intention, store visits, time and many more factors.

For marketers it poses an even bigger problem of having to continuously keep up with the consumers needs. The biggest cost the marketers face today is the most of acquiring a customer and retaining him. This cost can be brought down by turning customers into loyalists and generating repeat purchases from the same set of customers.

45

The research problem can thus be stated as:

To identify and analyze the variables responsible for the purchase of big cars (Sedan, SUV and MUV) and arrive at a logical conclusion that would explain and integrate the factors to predict the purchase.

The research objectives of this study hence are:

To establish a relationship between the variables involved in the purchase of big cars.

To understand the main motivations for purchasing a car.

To find out the various types of information, its sources and its routes in the purchase process

Research Design

The study tried to identify certain variables responsible for purchases. This meant that a qualitative study had to be undertaken before data could be collected using a questionnaire.

A qualitative study was performed among the following set of people:

46 Car dealers: 5 in-depth interviews with the car dealers.

Questions asked to the dealer were open ended.

According to you which factors influence more to consumers while purchasing the car?

What are the important features that people want in there car? Generally how people finance there purchase? How many people take test drives on there visit to showroom? Number of people purchases the car after the test drive? Which fuel engine generally they prefer?

The study provided with the basis for a questionnaire study. A questionnaire study was conducted in once center with a sample size of 120.

The selection criterion for choosing respondents was as follows:

The purchase should have been a first hand one. Again, this restriction was placed to ensure that information on all stages of decision making was collected and there was no bias caused by external factors.

The respondent should own a big car. (Sedan, SUV or MUV)

47

DATA ANALYSIS AND INTERPRETATION

1.

Which car do u own? (company and model name)

For consumers there is wide variety of choice for purchasing a car. In 70s and 80s there was limited choice, but now there are many options including many foreign companies like Honda, Toyota, Hyundai, Merceds-benz, B.M.W., etc. 45% people own Toyota Corolla and 6% own Toyota Innova. People having Fiat, BMW , Honda, Ford, Maruti ranges from 2 -4 %. So from survey I can say that most of the people prefer to buy big car from Toyota Company.

48

2.

Reason for not having Sedan, SUV or MUV.

price of the car easy availability of hired vehicle maintenance cost fuel cost driving problem in traffic

49% 4% 25% 4% 18%

Price of the car was the main reason for not having the big cars. 49% people say that they are not buying big car because of its price. After the price at second level people rate maintenance cost and driving problem in traffic as important reason. Fuel cost and maintenance cost was not very important reason for most of the people.

49

3.

When did you purchase this vehicle?

less than 6 months 6 months- 1 year 1 year -2 year more than 2 year

12% 16% 20% 52%

In the survey most of the people who have respond to the questionnaire have purchased there vehicle before 2 years.

50

4.

Whats your family income?

Less than 6 lac 6 lac - 8 lac 8 lac - 10 lac 10 lac- 14 lac more than 14 lac

10% 25% 30% 26% 9%

As these cars are quiet expensive, Income plays a very important role in the buying decision. Some of the cars of the company like Mercedez-benz and B.M.W. costs above 25 lakhs. In my survey 30% respondents falls in the category of income level of 8-10 lac. 26% in 10-14 lac and 25% in 6 to 8 lac. So majority of respondent are in the income level above 6 lacs.

51

5.

How do you finance the purchase of your car?

self loan others

8% 90% 2%

Due to easy availability of the loans and financing options most of the people are opting for them. There are very few people who have enough amounts that they can easily put in for the purchase of vehicle. Most of the people prefer for going into the finance schemes as they have pay a small amount of down payment and the rest they can pay conveniently in small installments.

52

6.

For whom did you buy this vehicle?

self wife son daughter other family member 74% 11% 8% 5% 2%

A large number of peoples has purchased the vehicle for their own use. Few number of peoples has purchased the car for their wife, son or daughter.

53

7.

Which type of fuel engine you prefer?

petrol desel gas

68% 23% 9%

Most of the people prefer to use petrol engine rather than diesel or gas. Number of people who prefer gas were very less.

54

8.

How frequently you prefer to change your vehicle?

1-2 year 2-3 year 3-5 year more than 5 year 5% 17% 53% 25%

Most of people prefer to change their vehicle between 3 to 5 years as these cars are quite expensive. Only 5% of people prefer to change their vehicles before 2 years.

55

9.

What was the most important reason for buying a particular brand?
Prestige Has strong dealer network Known for superior engineering A trust worthy company Has good service network 22% 7% 33% 26% 12%

Superior engineering, Trust worthy company and prestige were the most important reason for the people for buying a particular brand. Service network and strong dealer network are not very much important for the consumer to buy a car.

56

10.

Which factors are more important to you when you plan to purchase car?
Brand of Car Price of the car fuel cost maintenance cost Handling of vehicle Styling of the vehicle Comfort of the vehicle Utility of the vehicle Reliability of the vehicle Average Pick up 14% 15% 4% 10% 5% 15% 7% 6% 11% 7% 6%

57 All the factors were important to the car owner but among these price, brand, styling, reliability and maintenance cost of the car were the most important factor.

11.

Are you happy with your dealer?

yes no 92% 8%

A very large number of the people are happy with their dealer. As there are many dealers in competition with each other all are trying to give there bet service to satisfy and retain the customer.

58

12.

How you rate your service offered by your authorized dealer?

good avera ge bad 79% 13% 8%

As large number of the people were satisfied with their dealers, most of them have rated the service of their dealer as good.

59

13.

Have you seen advertisement of your car?

yes no 91% 9%

Approximately 91%, A large number of people have seen the advertisement of the car. As the car companys have to advertise their product in several media due to the tough competition, there are more chances of the people to get expose to these advertisements.

60

14.

Where did you saw this advertisement?

magazin e internet televisio n newspap er Hoardin g

12% 12% 26% 31% 19%

People have seen the advertisement in several media. Among these most of the people have seen the advertisement in news papers, on television, and on hoardings. Though the usage of internet and television is more , company gives more advertisement in newpaper.

61

15.

If a friend or a colleague who is planning to buy a car and if he comes to you a for advice, would you suggest your car?
yes no 91% 9%

91% of the people says that they will suggest there car to there friend or colleague, from this we can make out that large number of people are satisfied with there car.

62

FINDINGS AND CONCLUSION

From the exploratory survey with dealers it was found that Income, age, gender are very important factors that influence the purchase decision.

According to dealers people give more weightage to the brand engine, comforts, price and reliability of the vehicle.

On an average 8 people out of 10 take test drive of the car on their visit to the showroom.

5 people out of 10 purchase the car after taking the test drive. According to dealer 80% to 90% people purchase the cars on loan. Most of them prefer petrol engines according to the dealers response. From the questionnaire study it was found that most of the people who are the owners of big cars (Sedan, SUV, MUV) prefer to buy the cars of the companys who is having a very good brand image and superior engineering.

The owner of the big cars prefer to buy very good brands like Audi, B.M.W., Mercedes benz, Honda, Toyota, Skoda, Hundai, Maruti-suzuki.

63 The owners of these cars do not prefer much to buy the brands like Tata, Fiat and Mahindra & Mahindra. They think that there engines are not as good as other brands and they are not as reliable as others. Due to easy availability of the loans and financing options most of the people are opting for them. There are very few people who have enough amounts that they can easily put in for the purchase of vehicle. Most of the people prefer for going in to the finance schemes as they have to pay a small amount of down payment and the rest they can pay conveniently in small installments. Most of the people purchase the vehicles for their own purpose. As these big cars are high prices very few people prefer to purchase these cars for other family members. Good number of people prefers to use petrol engine as they are smooth in using and does not make noise while running. Another reason for not using the diesel engine was its high maintenance cost.

The people who have very big long distance running prefer to have diesel engine as diesel is cheap and also gives good average by which its high maintenance cost gets off in long running.

According to survey it was found that people prefer to have SUVs and MUVs when they want to go for diesel engine and like to have sedans in case of petrol engine.

It was found from the study that most of the people prefer to change their vehicle between 3 to 5 years or more than 5 years as these cars are quiet high priced.

64 For the owners of these cars, most important reason for buying a particular brands was its superior engine, trust worthy company and prestige which brad gives. It was also found that these car owners were not much concerned about the average of the car except the car owners who prefer diesel engines. Most of the owners were happy with their dealer. Dealers try to give their best services and try to retain the customer as there are other dealers competing with each other for the same brand. It was found that a large number of the car owners were happy with their car and brand and they were ready to advice the same car to their friends and colleague.

65

RECOMMENDATIONS
The companies should concentrate on making superior engineering, design of the car and should try to enhance there brand image as these are the most important factors which buyers considers before purchasing these segment of cars. Companies should introduce these segment o cars at little low price as the price is one of the important factor for the people for not having a big car. According to the survey, approximately 90% of the people purchase car on installments, therefore it is very important for the companies to offer attractive financing options in order to attract the customers. Companies manufacturing diesel cars should try to decrease its maintenance cost and noise as these two are the main reasons for the people to have petrol engines. It was found that most of the people have seen the advertisement of cars in news paper, television and hoardings, so the companies should concentrate more on these medium in order to communicate and attract more consumers. Companies should give proper training to dealers, as some people were not satisfied by their dealers service and this could lead the people to shift to other brands.

66

LIMITATIONS

1. 2.

This study does not take into consideration consumer behavior regarding small cars. The study was conducted in one center i.e. Ahmedabad. This restricts the scope of research by limiting the spread across India.

3.

The study would be more comprehensive if the data collected was over a period of time, and with a panel.

4.

The car market in India is extremely dynamic, after the completion of the data collection some manufacturers may have pulled out certain models while some may have come up with new models in the market, this study does not capture those changes.

67

BIBLIOGRAPHY

www.carewale.com www.timesofindia.com www.india.car.net www.carazoo.com www.wikipedia.com www.team-bhp.com/forum/india-car-scene www.toostep.com/trends/indian-autombole consumer behviour book (The Engel, Blackwell and Miniard)

68

QUESTIONNAIRE
1. Which Car do you own?

2. What is the reason for not having a sedan or suv? Price of the car P Fuel cost F Driving problem in traffic D Maintenance cost M Easy availability of hired vehicle E

3. When did you purchase this vehicle? Less than 6 months L 6 months to 1 year 1 o 2 year More than 2 year M

4. What is your family income Less than 6 lac 6 lac 8 lac 8 lac 10 lac 10 lac- 14 lac More than 14 lac

69 5. How did you finance the purchase of your car? S Self L Loans O Others

6.

For whom did you buy this vehicle? S Self W Wife S Son D Daughter Other family members O O Others

7.

Which type of fuel engine you prefer? P Petrol D Diesel G Gas

8.

How frequently you prefer to change your vehicle? 1- 2 year 1 2-3 year 2 3-5 year 3 More than 5 year M

70 9. What was the most important reason for buying a particular brand? (tick whichever is applicable) If gives your prestige I Has a strong dealer network H Known for superior engineering K A trust worthy company Has a good servicing network H

10.

From the following which factors are more important for you when you plan to purchase car? (Rate them by giving them score out of five, 1 is min, and 5 is max.) Brand of the car B Price of the car P Fuel cost F Maintenance cost M Handling of the vehicle H Styling of the vehicle S Comfort of the vehicle C Utility of the vehicle U Reliability of the vehicle R A Average P Pickup

71 11. Are you happy with your dealer? Specify your dealers name Y Yes N No _______________

12.

How you rate your service offered by your authorize dealer? G Good A Average B Bad

13.

Have you seen advertisement for car? Which ones do you remember? Can you describe them to me? _____________________________________________________ _____________________________________________________ 14. Where did you see this advertisement? Newspaper Television Hoarding Magazine Internet

15. If a friend or a colleague who is planning to buy a car and if he comes to you for advice, would you suggest your car? Yes No

72 Personal Details: Name of respondent: ____________________________________________ Residential Address: ______________________________________________ ______________________________________________ Telephone No: _____________________ Age: ______________ Family income (yearly) ___________ Pin Code: __________________

Occupation: _____________________ City: ____________________ Date: __________________