THEORETICAL BACKGROUND

I nd ia n co ns um er s s ee m t o h av e a pe nc ha nt fo r U ti li ty V e hi cl es . A cc or di ng t o i nd us tr y e s t im at es , p re mi um U ti li ty V e hi cl es s a le s i nc re as ed b y al mo s t 30 0% t o n ea rl y 5, 23 7 un it s in 0 4 fr om 1, 25 0 un it s s o ld i n 03 .

T hi s m ea ns th at t he pr em iu m U t il it y V eh ic le s n ow c om pe te s ne ck - an d- ne ck w i th t he E - s e gm en t s e da n. I f t hi s tr en d co nt in ue s , t he U t il it y V eh ic le s m ay w el l o ve rt ak e th e E - s e gm en t s e da n. T hi s i s n t t oo ba d, co ns i de ri ng t ha t mo s t of t he v eh ic le s ar e p ri ce d upw ar ds o f Rs 14 l ak h.

S ev er al n ew l au nc he s a re al s o in t he of fi ng in th e d om es ti c ma rk et . K o re an ca r m ak er H yu nd ai p la ns t o l au nc h t he T uc s o n, w h il e J ap an es e au to m aj or To yo ta i s e xp ec te d t o fo ll ow w i th th e F o rt un er . Cu rr en tl y, th e H on da C R- V an d F o rd E nd ea vo ur a cc ou nt f or t w o -t hi rd s o f th e v ol um e s al es in th e S U V s eg me nt . Ev en w it h m os t of t he S U V s i mp or te d i n th e c om pl et e l y b ui lt - u p un it (C BU ) f or m, m an uf ac tu re rs ar e s ti ll b ul li s h on t hi s s eg me nt .

I n In di a, U t il it y V eh ic le s h av e p ri ma ri l y b ee n d ie s e l- d ri ve n. S o w h y ar e c ar m ak er s in tr od uc in g th e mo re e xp en s i ve a nd l es s f ue l- e ff ic ie nt U ti li ty V eh ic le s t ha t ru n on p et ro l? T he re as on is t ha t th es e v eh ic le s ha ve mo re pow er an d pe p e xa ct ly th e t hi ng th at S U V d ri ve rs ar e l oo ki ng fo r.

H en ce kn ow l ed ge o f th e c on s u me r s aw ar en es s , p re s e nt bu yi ng ha bi ts , u s e r b eh av io ur , a tt it ud es a nd op in io ns a bo ut u ti li ty v eh ic le s an d t he ir s a le s

p er fo rm an ce h el ps in f or mu la ti ng a n ap pr op ri at e m ar ke ti ng s tr at eg y t o gr ab a g oo d s h ar e in t he c om pe ti t i ve m ar ke t. A s tu dy of th is as pe ct w ou ld e na bl e

v ar io us co mp an ie s to t ak e ne ce s s ar y a ct io ns to im pr ov e th ei r pr od uc t.

CONCEPTS
MARKETING
is t he cr af t of l in ki ng t he pr od uc er s (o r po te nt ia l pr od uc er s )

o f a p ro du ct or s er vi ce w it h c us to me rs , b ot h e xi s t in g an d po te nt ia l . I n p op ul ar u s a ge , th e te rm "m ar ke ti ng " re fe rs to t he p ro mo ti on of pr od uc ts , e s p ec ia ll y ad ve rt is in g a nd b ra nd in g . H o w e ve r, i n p ro fe s s io na l us ag e th e te rm h as a w id er m ea ni ng . I t ca n be di vi de d i nt o f ou r s e ct io ns , o ft en c al le d th e " f ou r P s , " on ly on e of w hi ch is p ro mo ti on . Th ey ar e:

P RO D U CT - Th e P ro du ct ma na ge me n t a s p ec t of m ar ke ti ng de al s w it h th e

s p ec if ic a t io ns of th e a ct ua l g oo d o r s er vi ce , a nd ho w i t re la te s t o th e e nd - us e r ' s n ee ds a nd w a nt s .

P RI CI NG - Th is re fe rs t o t he pr oc es s of s e tt in g a pr ic e fo r a p ro du ct ,

i nc lu di ng di s c ou nt s .

P RO MO TI ON - Th is in cl ud es ad ve rt is in g , s al es p ro mo ti on , pu bl ic it y ,

a nd pe rs on al s e ll in g , a nd re fe rs t o t he va ri ou s me th od s o f pr om ot in g th e p ro du ct , b ra nd , o r co mp an y.

P LA CE or di s t ri bu ti on re fe rs t o h ow th e pr od uc t g et s to th e c us to me r; f or

e xa mp le , p oi nt of s al e p la ce m en t o r re ta il i ng . T he s e fo ur e le me n ts a re of te n r ef er re d to a s th e m ar ke ti ng mi x . A m ar ke te r w il l us e t he s e va ri ab le s to cr af t a m ar ke ti ng pl an . F or a m ar ke ti ng pl an to be s u cc es s f ul , th e mi x o f t he f ou r " p' s " mu s t r ef le ct t he w an ts an d d es ir es o f t he c on s u me rs in t he ta rg et ma rk et . Tr yi ng t o co nv in ce a ma rk et s e gm en t t o bu y

s o me th in g th ey d on' t w a nt is ex tr em e ly e xp en s i ve a nd s el do m s uc ce s s fu l. M ar ke te rs de pe nd on m ar ke ti ng re s e ar ch to de te rm in e w ha t c on s u me rs w an t a nd w h at th ey a re w il li ng to pa y fo r. M a rk et er s ho pe th at th is p ro ce s s w il l g iv e th em a s u s t ai na bl e co mp et i t iv e ad va nt ag e . M a rk et in g m an ag em en t i s t he p ra ct ic a l a pp li ca t io n o f th is pr oc es s . I n e co no mi cs , CONSUMERS ar e in di vi du al s or ho us e ho ld s t ha t " co ns um e" g oo ds an d s er vi ce s g en er at ed w it hi n th e e co no my . I n s t an da rd mi cr oe co no m i c t he or y, a consumer i s as s um ed to ha ve a b ud ge t w h ic h ca n b e s pe nt o n a ra ng e o f go ods a nd s e rv ic es av ai la bl e on t he m ar ke t . U n de r th e as s um pt io n o f r at io na l i ty , th e bu dg et a ll oc at i on i s c ho s e n a cc or di ng t o t he pr ef er en ce of t he co ns um er , i .e . t o m ax im i ze hi s or h er ut il it y f un ct io n. A CUSTOMER is s o me on e w ho p ur ch as es or r en ts s om et hi ng fr om an i nd iv id ua l o r or ga ni s a ti on .

TYPES OF CUSTOMER
C us t om er s c an b e c la s s if ie d i nt o t w o ma in g ro up s ; in te rn al a nd e xt er na l c us to me rs . A n i nt er na l c us to me r is s o me on e w ho w or ks fo r th e o rg an is at io n, p os s ib ly in an ot he r d ep ar tm en t or a no th er b ra nc h. Ex te rn al cus to me rs a re e s s e nt ia l ly th e g en er al p ub li c. T he s e tw o gr ou ps ca n b e f ur th er br ok en dow n:

Internal Customers

P eo pl e w or ki ng i n d if fe re nt d ep ar tm en t s P eo pl e w or ki ng i n d if fe re nt b ra nc he s

External Customers

I nd iv id ua ls I nd iv id ua ls o f di ff er en t ne ed s I nd iv id ua ls o f di ff er en t cu lt ur es B us i ne s s p eo pl e G r ou ps

NEEDS AND EXPECTATIONS

C us t om er s h av e ne ed s a nd ex pe ct a ti on s th at ne ed t o b e obs er ve d by th e o rg an is at io n. A n ee d is s om et hi ng t ha t th e c us t om er ne ed s , l ik e c ar i ns ur an ce b ei ng l ow . A n e xp ec ta t io n is s om et hi ng th at th e cu s t om er w on ' t ne ce s s ar il y g et b ut t he y ex pe ct to g et , li ke a c ar g et ti ng f ro m a p er s o n' s p la ce of de pa rt ur e to t he ir d es ti na ti on .

CUSTOMER LIFETIME VALUE

T hi s is a l on g- t er m m ar ke ti ng p ri nc ip le w h ic h lo ok s a t th e v al ue t o th e co mp an y o f a c us t om er ov er t he w h ol e ti me t ha t t he y re la te w it h t he co mp an y. T hi s i nc lu de s kn ow i ng th at a lt ho ug h a cu s t om er m ay te mp or ar il y u s e a no th er c om pa ny ' s p ro du ct s / s e rv ic es , th ey ca n r et ur n. O n e im po rt an t co ns eq ue nc e o f a co mp an y t ak in g t he l on g- t er m v ie w t o he ar t an d i nt o a ct io n i s th at t he cu s t om er te nd s t o h av e b et te r s e rv ic e a nd he nc e t en ds to b e m or e l oy al . A co mp an y' s

CORE COMPETENCY

is t he on e t hi ng th at i t c an do

b et te r th an i ts c om pe ti t or s . A c or e c om pe te nc y c an be a ny th in g fr om pr od uc t d ev el op me n t t o e mp lo ye e d ed ic at io n. I f a c or e co mp et en cy y ie ld s a lo ng te rm ad va nt ag e to th e c om pa ny , it is s ai d to b e a s u s t ai na bl e c om pe ti t i ve ad va nt ag e .

A cc or di ng to P ra ha la d an d H am el a c or e c om pe te nc e ha s th re e c ha ra ct e ri s t i cs : 1. 2. 3. i t p ro vi de s p ot en ti a l a cc es s to a w i de va ri et y of m ar ke ts , i t i nc re as es p er ce iv ed c us to me r be ne fi ts a nd I t i s ha rd f or c om pe ti t or s to im it a te .

MARKET SEGMENTATION

i s t he p ro ce s s of gr ou pi ng a ma rk et

i nt o s m al le r s ub gr ou ps . Th is i s n ot s o me th in g th at i s a rb it ra ri l y im po s e d on s o ci et y: it i s de ri ve d f ro m t he re co gn it io n t ha t th e t ot al ma rk et i s of te n m ad e up o f s u bm ar ke ts (c al le d s e gm en ts ). T he s e s eg me nt s ar e ho mo ge ne ou s w i th in ( i. e. p eo pl e in t he s e gm en t ar e s im il ar to e ac h ot he r i n t he ir a tt it ud es ab ou t c er ta in v ar ia bl es ). B ec au s e o f th is i nt ra - g ro up s im il ar i ty , t he y a re li ke ly to r es po nd s o me w h at s im il ar ly to a gi ve n ma rk et in g s tr at eg y. Th at i s , t he y a re li ke ly to h av e s im il ar fe el in gs ab ou t a ma rk et in g m ix co mp ri s e d of a g iv en p ro du ct , s o ld a t a gi ve n p ri ce , di s t ri bu te d in a ce rt ai n w ay , an d pr om ot ed i n a c er ta in w a y. A

TARGET MARKET

i s th e m ar ke t s e gm en t w hi ch a p ar ti cu l ar pr od uc t

i s m ar ke te d to . It is of te n d ef in ed b y a ge , ge nd er a nd /o r s o ci o- ec on om ic g ro up in g .

TARGETING STRATEGY
H o w ma ny s e gm en ts to ta rg et ? W hi ch s eg me nt s t o ta rg et ? H o w ma ny pr od uc ts t o o ff er ?

is t he s e le ct io n o f th e c us to me rs yo u w i s h

t o s er vi ce . T he de ci s i on s i nv ol ve d in ta rg et in g s tr at eg y in cl ud e:

W hi ch p ro du ct s to of fe r in w hi ch s e gm en ts ?

MARKETING MYOPIA

is

u nn ec es s a ri ly

c om mo n

am on g

b us i ne s s

p eo pl e. It is no t s e ei ng ' d ow n t he r oa d' . M a ny bu s i ne s s p eo pl e m ak e t he ir d ec is io ns b as ed on cu rr en t c ir cu ms ta nc e s . Th ey d o n ot t hi nk a bo ut w ha t w i ll l ik el y oc cu r in th ei r i nd us tr y in th e f ut ur e. O n e re as on th at s ho rt s ig ht ed ne s s is s o co mm on is th at pe op le fe el in g t ha t t he y ca n no t ac cu ra te l y pr ed ic t t he f ut ur e. T he y ar e ri gh t, of co urs e. B ut j us t b ec au s e w e c an no t a cc ur at e ly p re di ct th e f ut ur e, w h ic h i s no r ea s o n w hy w e s h ou ld n ot us e th e w h ol e r an ge of b us in es s p re di ct io n te ch ni qu es av ai la b le t o us t o es ti ma te f ut ur e c ir cu ms ta nc es a s b es t w e c an .

Design of Study
Title of the project Statement of Problem Objectives of study Research Design Research Type Research Method Data collection Sampling plan

Research Instrument Methodology of collection Analysis Assumptions of the study Limitations of the study

RESEARCH METHODOLOGY
TITLE OF THE PROJECT
THE CUSTOMER PERCEPTION TOWARDS UTILITY VEHICLES AND FACTORS INFLUENCING THE BUYING DECISIONS

STATEMENT OF PROBLEM
D u ri ng th e 1 99 0s , U t il it y V e hi cl es b ec am e th e fas te s t g row in g s e gm en t of t he a ut o in du s t ry . In 19 99 , U ti li ty V e hi cl es s a le s r ea ch ed al mo s t 19 % o f t he t ot al l ig ht v eh ic le ma rk et a nd th e m ix of U ti li ty V e hi cl es on t he r oa d w as a bo ut 8. 7% . S om e ha s c al le d t hi s po pu la ri ty a pa s s i ng f ad , b ut t he c on ti nu ed i nc re as es i n

U ti li ty V eh ic le s s a le s s ee m t o i nd ic at e a mo re p er ma ne nt t re nd . A d di ti on al e xp la na t io ns fo r U ti li ty V e hi cl es po pu la ri ty i nc lu de th e ge ne ra l e co no mi c w e ll b ei ng in In di a, a p er ce pt io n of s af et y, an d ut il i ty .

H en ce kn ow l ed ge o f th e c on s u me r s aw ar en es s , p re s e nt bu yi ng ha bi ts , u s e r b eh av io ur , a tt it ud es a nd op in io ns a bo ut u ti li ty v eh ic le s an d t he ir s a le s

p er fo rm an ce h el ps in f or mu la ti ng a n ap pr op ri at e m ar ke ti ng s tr at eg y t o gr ab a g oo d s h ar e in t he c om pe ti t i ve m ar ke t. A s tu dy of th is as pe ct w ou ld e na bl e

v ar io us co mp an ie s to t ak e ne ce s s ar y a ct io ns to im pr ov e th ei r pr od uc t.

OBJECTIVES OF STUDY
To unde rs ta nd the purc hase de cis ions of the c ons ume rs regarding utility ve hicles. To meas ure the c ustomer acce pta bility for utility ve hicles The psychologica l and motivationa l factors tha t influence the buying de cis ions. C ustome r expectations w ith respect to seve ra l fac tors tha t the y look into w hile buying utility vehic le. To know the fea tures they need to cha nge or include in the ir Utility Ve hicles

RESEARCH DESIGN
RESEARCH TYPE RESEARCH METHOD DATA COLLECTION
For the purpose of study both prima ry and seconda ry data we re collected. The prima ry da ta was c ollec ted through self-administe re d Struc ture d Ques tionna ire a nd seconda ry da ta wa s collecte d through Des criptive Resea rc h Surve y Method

ne wspape rs, inte rnet, magazines etc.

SAMPLING PLAN
Sampling tec hnique the Sa mpling tec hnique use d was non

proba bilistic c onvenie nt sampling. Sample unit owne rs of utility ve hic les in Bangalore city. Sample Size 120responde nts.

RESEARCH INSTRUMENT
The Resea rc h instrume nt use d for data colle ction was self-a dministered

Struc ture d Ques tionna ire. The Que stionna ire inc luded Dichotomous Sele ction Multiple choice Single response scale. Multiple choice multiple response scale. Ra nk orde r scale. Likert scale.

METHODOLOGY
Adminis tered)

OF

COLLECTION

Pe rs ona l

(Inte rvie w

ANALYSIS
For all varia bles the res ponse cha rac te ristics we re de fine d and the collected da ta was a rranged in the ta bular format. Rele vant sta tistica l tools we re us ed for ana lys ing the obtaine d data. The infe re nces we re dra wn us ing the ana lys is a nd marke ting concepts.

The sta tis tical tools us ed for the ana lys is were Percenta ge Me thod Likert Sc aling Me thod Fis hers Exac t Tes t T Test

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 C hi-Square Tes t Fre edma n Test

ASSUMPTIONS OF THE STUDY

The da ta collected from the res ponde nts i.e., their attitudes,

pe rc eptions, fe elings and w ha t eve r they have expressed is assumed to be prefec t as to the ir knowle dge. All fee lings on general consume r pe rce ption a re base d on the ass umptions tha t the vie ws expresse d by the ir re spondents repres ent the vie ws of the ge neral public.

LIMITATIONS OF THE STUDY

The study was confine d to Bangalore city only. The sample size was limite d to 120 res pondents. The know le dge of respondents a bout the importance of certa in a ttributes and factors ma y be limited. If res ponde nts dont want to express the ir rea l views, the ana lys is and inference ma y be inacc urate.

AUTOMOBILE INDUSTRY

11

Introduction Auto Policy of Government of India Historical Perspective Winds of Change Current Scenario Trends and Key Issues Global Perspective

INDIAN AUTOMOBILE INDUSTRY

12

INTRODUCTION
A u to mo ti v e i nd us tr y ha s un iv er s a ll y em er ge d as a n i mp or ta nt dr iv er in th e e co no my . A l th ou gh t he a ut om ot iv e i nd us tr y i n I nd ia is n ea rl y s ix d ec ad es o ld , u nt il 19 82 , o nl y th re e ma nu fa ct ur e rs - M /s . H i nd us ta n M ot or s , M / s . P re mi er A u to mo bi l es an d M /s . S ta nd ar d M ot or s t en an te d th e mo to r c ar s e ct or . O w in g t o l ow v ol um es , i t pe rp et ua te d o bs o le te te ch no lo gi es a nd w as o ut of s y nc w i th t he w o rl d i nd us tr y. In 1 98 2, M ar ut i U d yo g Lt d. (M U L) ca me u p as a g ov er nm en t i ni ti a t iv e in c ol la bo ra t io n w i th S u zu ki o f J ap an t o e s t ab li s h vo lu me pr od uc ti on o f c on te mp or ar y mo de ls . A ft er th e li ft in g o f l ic en s i ng i n 1 99 3, 17 ne w v en tu re s h av e co me up of w hi ch 1 6 a re f or ma nu fa ct ur e o f c ar s . Th is i nd us tr y c ur re nt ly a cc ou nt s fo r ne ar ly 4% o f th e G N P an d 17 % 0f t he in di re ct ta x r ev en ue .

T he i nd us tr y en co mp as s e s co mm er ci a l ve hi cl es , m ul ti - ut il it y ve hi cl es , pas s e ng er c ar s , t w o w he el er s , th re e w he el er s , t ra ct or s a nd au to co mp on en ts . Th er e a re in p la ce 15 ma nu fa ct ur e rs of ca rs an d mu lt i u ti li t y ve hi cl es , 9 of co mm er ci a l v eh ic le s , 1 4 of T w o /T hr ee Wh ee le rs a nd 1 0 of T ra ct or s be s i de s 5 of e ng in es . W it h a n i nv es tm en t of Rs .5 0, 00 0 C ro re s , th e tu rn ov er w as Rs . 5 9, 50 0 C ro re s i n A u to mo ti v e S ec to r d ur in g 19 99 -2 00 0. I t e mp lo ys 4, 50 ,0 00 p eo pl e di re ct ly an d 1 00 ,0 0, 00 0 p eo pl e i nd ir ec tl y an d is now in ha bi te d by gl ob al ma jo rs i n ke en c on te nt io n.

I nd ia

ma nu fa ct ur e s

ab ou t

3 8, 00 ,0 00

2 -w h ee le rs ,

5, 70 ,0 00

p as s en ge r

c ar s ,

1 ,2 5, 00 0 M ul ti U ti li ty V e hi cl es , 1, 70 ,0 00 C om me rc ia l V e hi cl es an d 2 ,6 0, 00 0 t ra ct or s a nn ua ll y. In di a ra nk s s ec on d i n th e pr od uc ti on of tw o w h ee le rs an d f if th i n c om me rc i al ve hi cl es .

13

I nd ia s a ut om ot iv e co mp on en t in du s t ry ma nu fa ct ur e s t he e nt ir e r an ge o f p ar ts r eq ui re d by t he do me s t ic a ut om ob il e in du s t ry an d cu rr en tl y em pl oy s ab ou t 2 50 ,0 00 p er s o ns . A ut o co mp on en t m an uf ac tu re rs s up pl y to tw o ki nd s of b uy er s o ri gi na l eq ui pm en t ma nu fa ct ur er s ( O E M ) an d t he r ep la ce m en t m ar ke t. Th e r ep la ce m en t ma rk et i s ch ar ac te r is ed by t he pr es en ce of s ev er al s ma ll - s c al e s u pp li er s w ho s co re o ve r t he or ga ni s e d p la ye rs in te rm s o f ex ci s e du ty e xe mp ti on s an d l ow er o ve rh ea ds . T he de ma nd f ro m t he O EM m ar ke t, on t he o th er ha nd , i s de pe nd en t on t he de ma nd f or n ew v eh ic le s .

T he au to s e ct or (e xc lu di ng Tr ac to rs ) a tt ai n ed a s t ee p c um ul at i v e a nn ua l g ro w t h o f 22 % be tw ee n 19 92 a nd 1 99 7. T he Tr ac to rs a ch ie ve d a c um ul at i ve an nu al g row th of 1 6% . Co mp on en t pr od uc ti on g re w by 2 8% . Th er e h as b ee n a s low do w n i n th e au to mo bi le s e ct or in th e p as t t w o y ea rs . H ow ev er , t he c om po ne nt in du s t ry m ai nt a in ed a l ow bu t p os it iv e g ro w t h r at e m ai nl y d ue t o it s e xp or t p er fo rm an ce . O v er th e y ea rs , th e c om po ne nt in du s t ry h as m ai nt a in ed a 1 0% - 1 2% s h ar e o f ex po rt s i n t he to ta l pr od uc ti on .

R oa ds oc cu py a n e mi ne nt p os it io n i n t ra ns po rt at io n as th ey , as pe r th e pr es en t e s t im at e , c ar ry ne ar ly 65 % of f re ig ht a nd 87 % of p as s en ge r t ra ff ic . A l th ou gh , I nd ia ha s 3. 3 mi ll io n k il om e te rs o f ro ad ne tw or k, w hi ch is t he s e co nd l ar ge s t i n t he w or ld , t he I nd ia n h ig hw ays ar e ge tt in g ov er po pu la te d. T ra ff ic ma na ge me n t a nd ro ad s ens e a ls o ne ed at te nt i on .

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G lo ba ll y, th e au to mo bi l e in du s t ry , w it h it s ol ig op ol is ti c m ar ke t s tr uc tu re , i s o ne o f th e l ar ge s t i n t er ms of e mp lo ym en t a nd va lu e ad di ti on . A s a le ad er i n p ro du ct a nd p ro ce s s t ec hn ol og i es fo r t he m an uf ac tu r in g s e ct or , it h as be en a cc ep te d as o ne o f t he i mp or ta nt d ri ve rs of ec on om ic g ro w t h. G l ob al t re nd s in di ca te d th at t he a ut o ma rk et h as mo ve d fr om th e g row th a nd de ve lo pm en t p has e to t he c on s o li da ti on p ha s e . T he J ap an es e au to mo bi l e ma jo rs , be s i de s t ec hn ol og i ca l i nn ov at io ns , i mp le m en t ed s o me m od er n ma na ge m en t ph il os op hi es , w h ic h w e re g ra du al ly ad op te d b y t he a ut om ob il e i nd us tr y of th e U ni te d S ta te s an d ot he r E ur op ea n co un tr ie s . Cu rr en tl y, a lm os t fi ft y p er ce nt of t he gl ob al p as s en ge r c ar p ro du ct io n co me s f ro m t hr ee co un tr ie s , v iz ., th e U S ( 20 %) , J a pa n (1 9% ) an d G er ma ny ( 12 %) . I n t he c om me rc i a l ve hi cl e ca te go ry , t he s h ar e of th e U S i s 4 6 p er ce nt fo ll ow ed by J ap an (1 1% ) an d Ch in a ( 9% ). I n bo th th es e c at eg or ie s o f v eh ic le s , I nd ia ' s s h ar e i n t he to ta l w o rl d p ro du ct io n i s 1 pe r c en t.

I nd ia ha s im me ns e po te nt ia l fo r em er gi ng a s a g lo ba l au to mo bi le gi an t. T hi s i nd us tr y ha s m ad e pi on ee ri ng e ff or ts in a do pt in g m od er n te ch no lo gy an d a ll ow in g t he e nt ry o f f or ei gn p la ye rs . Th e f as t g row th o f t hi s in du s t ry is ev id en t i n t he s pu rt in de ma nd fo r au to mo bi l es i n t he la s t fe w ye ar s . T hi s i s w e ll s u pp or te d by t he ec on om ic re fo rm s th at h av e b ee n p ut in p la ce , pa rt ic ul a r ly in t he fi na nc ia l s e ct or an d in fo re ig n d ir ec t in ve s t me nt . D ur in g th e la s t de ca de , c on s c io us e ff or ts ha ve be en ma de t o fi ne - tu ne s ta te po li cy t o e na bl e th e I nd ia n a ut om ob il e in du s t ry r ea li s e it s po te nt ia l to th e f ul le s t . A bo li ti on of l ic en s i ng a nd re mo va l of q ua nt it a ti v e r es tr ic ti on s co up le d w i th i ni ti a t iv es to b ri ng th e p ol ic y fr am ew or k i n s te p w i th WT O re qu ir em en t s ha ve s e t t he in du s t ry o n a p ro gr es s iv e pa th . T he f re ei ng o f t he in du s t ry fr om t hi s res tr ic t iv e en vi ro nm en t

15

h as h el pe d it to res tr uc tu re , a bs or b new t ec hn ol og i es a nd al ig n it s e lf to gl ob al d ev el op me n t. In cr ea s i ng co mp et i ti on as a re s u lt of l ib er al i s a t io n h as l ed to c on ti nu ou s m od er ni s a ti on as w el l a s s ub s t an ti al pr ic e re du ct io n ke ep in g pa ce w it h th e in te rn at i on a l s t an da rd s . M or eo ve r, a ut o f in an ce w i th ag gr es s i ve m ar ke ti ng s t ra te gi es h as p la ye d a bi g r ol e i n b oos ti ng th e au to mo bi le de ma nd

HISTORICAL PERSPECTIVE
T o u nd er s t an d t he pu ls e of I nd ia n A ut om ob il e m ar ke t, o ne ha s to l oo k a t i ts h is to ri ca l d ev el op me n ts . Ti ll ea rl y 8 0s , In di an ma rk et s w er e c on tr ol le d b y th e g ov er nm en t po li ci es in fl ue nc ed by F ab ia n S o ci al is m, ce nt ra l p la nn in g an d b ur oc ra ti c r ed -t ap is m. A ll pr od uc ti on c ap ac it i es w er e l ic en s e d. T he im po rt d ut ie s w e re as tr on om ic a l ly h ig h t o pr ot ec t t he do me s t ic ma rk et fr om g lo ba l c om pe ti t io n. F o re ig n i nv es tm en ts w er e n ot a ll ow ed i n d om es ti c ve nt ur es .

O n t he o th er ha nd , du e t o po pu la ti on an d in ef fi ci e n t p ub li c t ra ns po rt s ys te m, t he d em an d o f a ut om ob il e fa r ex ce ed ed th e s u pp ly . Th e w a it in g p er io ds to uc he d m ad de ni ng le ve ls of 10 -1 2 y ea rs . B uo ye d by s uc h a m ag ni tu de o f i mp en di ng d em an d, M a nu fa ct ur er s go t in to m on op ol is ti c fr am e o f m in d. O pe ra ti ng on v ir tu al ly ne ga ti ve w or ki ng ca pi ta l , t he re w as n ei th er an y in ce nt iv e no r bus in es s c om pu ls io n to up gr ad e t he te ch no lo gy o r to bu il d r el ia bi l i ty in th e p ro du ct . M an uf ac tu re rs fo cu s e d o n co s t c ut ti ng an d va lu e en gi ne er in g. Th e a ft er s a le s s er vi ce a ls o di d n ot g et i ts d ue im po rt an ce in th e s ch em e of t hi ng s .

M an uf ac tu re r s at ti t ud e ha d a r ub -o ff on th e D e al er s m en ta l it y as w e ll . Th er e w as no c om pe ll i ng re as on t o p ro vi de w or ld cl as s bu yi ng am bi en ce an d a ft er s al es s e rv ic e. It w a s a S e ll er s M a rk et d om in at ed b y h an df ul ma nu fa ct ur er s . Th e c ho ic e of m od el s , fe at ur es , s t yl in g w as ve ry li mi t ed . T he ma nu fa ct ur er s a nd t he

16

d ea le rs w ho s t ag na te d i n th is er a fo un d i t d if fi cu lt t o s ur vi ve i n th e co mp et i ti v e o pe n ma rk et s at a l at er da te . T ho s e w h o s u rv iv ed h ad t o p ay d ea rl y r eg ai n th e
confidence from the customers.

WINDS OF CHANGE
T hi s s ce ne s t ar te d c ha ng in g in th e 8 0s . S l ow ly b ut s ur el y G ov er nm en t s t ar te d p ul li ng o f va ri ou s s to ps in th e p ol ic ie s . S lu e o f in it ia t iv e s w e re u nd er ta ke n t o l ib er al i s e an d mo de rn is e th e m ar ke t. I n e ar ly 8 0s , th e m an u fa ct u r in g c ap ac it y l ic en s e s w er e ab ol is h e d S oo n th e w ai ti ng l is ts s hr un k an d va ni s h ed . P res s u re s ta rt ed m ou nt in g on m an uf ac tu re rs a nd de al er s t o s e ll th e ve hi cl es ra th er th an m er el y di s t ri bu te . T he s e w er e t he ea rl y s i gn s o f m ar ke t t ra ns fo rm at io n fr om a s el le rs ma rk et t o a b uy er s ma rk et .

T ec h n ol og ic al c ol la b o ra ti on s w i th e q u it y p ar ti ci p a ti on w e re a ll ow ed i n e ar ly 8 0s I n a v er y s ho rt s pa n o f ti me , a n um be r o f jo in t ve nt ur es fl ou ri s h ed by

a da pt in g to te ch no lo gy a pp ro pr ia te fo r In di an co nd it io ns . Th e n ew b re ed of v eh ic le s w as m uc h mo re ef fi ci en t, fe at ur e- ri ch a nd b et te r s t yl ed t ha n t he ir c ou nt er pa rt s . T he s e pr od uc ts s t ru ck t he ri gh t ch or d in th e m ar ke t as t he y a dd re s s ed u ns at is fi ed d em an ds of t he cu s t om er s . S o me ne w ca te go ri es l ik e s m al l ca r , 1 00 c c J ap an es e m ot or cy cl e w h ic h fo rm ed th e f ou nd at io n of

17

m od er n a ut om ob il e ma rk et e me rg ed d ur in g t hi s p ha s e .

In

e ar ly

9 0s ,

M u l ti n a ti on al s

w er e

a ll ow ed

to

set

up

th ei r

own

m an u fa ct u r in g p lan ts on I n d i an s o il T hi s c re at ed a hu ge i nf lu x of g lo ba l gi an ts fr om J ap an , K o re a, U S A an d E ur op e. T he y br ou gh t w i th t he m w o rl d- c la s s ma nu fa ct ur in g pr ac ti c es , r el ia bl e p ro du ct s w i th tr ie d a nd t es te d s ys te ms . F o r t he f ir s t ti me I nd ia n co ns um er s w er e p am pe re d w i th th e s im ul ta ne ou s la un ch o f Wo rl d m od el s .

I n l at e 9 0s , B an k in g s e ct or w as l ib er al is ed T hi s m ad e c re di t a va il ab l e a t a c he ap er r at e. T he en tr y o f pr iv at e b an ks a nd

N o n B an ki ng F i na nc e Co rp or at io ns i mp ro ve d t he e ff ic ie n cy a nd th e s e rv ic e l ev el s . Th is en ha nc ed th e b uy in g p ow er of cu s t om er s i gn if ic an tl y. T he s e d ev el op me n ts ai de d t he t ra ns fo rm at io n fr om S e ll er s m ar ke t t o th e bu ye rs m ar ke t. Th e n ew c us to me r w as k no w l ed ge ab le , em po w e re d an d ha d b ar ga in in g p ow e r.

CURRENT SCENARIO
T he g ro w t h c ur ve o f I nd ia A ut o I nc . ha s b ee n on an up s w i ng f or th e pa s t fe w y ea rs . Th e hi gh g ro w t h ob s e rv ed s i nc e 2 00 1- 02 i n au to mo bi l e p ro du ct io n c on ti nu ed i n t he fi rs t t hr ee q ua rt er s o f th e 2 00 4- 05 . A nn ua l g ro w t h w as 1 6. 0 pe r c en t i n A pr il - D e ce mb er , 2 00 4; t he g row th r at e i n 2 00 3- 04 w as 15 .1 pe rc en t. C ons eq ue nt t o l ib er al is a t io n, th e a rr iv al o f ne w an d co nt em po ra ry mo de ls , e as y a va il ab i l i ty of f in an ce a t r el at iv e ly lo w ra te o f in te re s t a nd pr ic e d is co un ts

18

o ff er ed by t he de al er s an d ma nu fa ct ur e rs a pp ea r t o h av e s ti mu la t ed th e d em an d f or v eh ic le s an d a s tr on g gr ow th o f th e i nd us tr y. T he au to mo bi l e i nd us tr y g rew a t a co mp ou nd an nu al g row th ra te ( CA G R ) of 2 2 p er c en t be tw ee n 1 99 2 a nd 19 97 . W it h i nv es tm en t ex ce ed in g Rs . 50 ,0 00 cr or e, t he tu rn ov er of t he a ut om ob il e i nd us tr y e xc ee de d Rs . 59 ,5 18 c ro re in 2 00 2- 03 . I nc lu di ng tu rn ov er o f t he a ut o- c om po ne nt s ec to r, t he a ut om ot iv e i nd us tr y s t ur no ve r, w h ic h w as ab ov e Rs . 84 ,0 00 c ro re in 20 02 -0 3, i s es ti ma te d t o h av e e xc ee de d Rs .1 ,0 0, 00 0 cr or e i n 2 00 3- 04 . T he pr og re s s i ve l ib er al is a ti on of t he n or ms f or f or ei gn in ve s t me nt an d im po rt o f t ec hn ol og y a pp ea r t o ha ve b en ef it ed th e a ut om ob il e s e ct or w it h pr od uc ti on of t ot al ve hi cl es i nc re as in g fr om 4. 2 mi ll io n i n 1 99 8- 99 t o 7. 3 mi ll i on in 2 00 3- 04 . I t i s li ke ly t ha t th e p ro du ct io n of s u ch ve hi cl es w il l e xc ee d 10 m il l io n i n th e n ex t c ou pl e of y ea rs . T he f as te s t g ro w t h i n vo lu me s ha s c om e f ro m c om me rc i a l ve hi cl es . B et w e en 1 99 8- 99 a nd 20 03 -0 4, o ut pu t o f s uc h v eh ic le s ha s gr ow n 2 .8 t im es c om pa re d to t he 2. 2 ti me s in cr ea s e i n p as s en ge r c ar s . F ur th er mo re , tw o- w he el er ou tp ut c on ti nu es to do mi na te t he vo lu me s ta ti s t ic s of th e s e ct or . In 20 03 -0 4, fo r e ve ry p as s en ge r c ar tu rn ed ou t b y th e s ec to r, th er e w e re 7 t w o -w he el er s p ro du ce d.

A u t om ob i le p ro d u c ti on (N u mb e rs ) C at eg or y P as s e ng er Ca r M ul ti U ti li ty V e hi cl es 2 00 2- 03 6 08 ,8 51 1 14 ,4 79 2 00 3- 04 8 42 ,4 37 1 46 ,1 03 2 00 4- 05 9 77 ,2 27 1 69 ,4 79

19

C o mm er ci a l V eh ic le s Tw o Wh ee le rs Th re e Wh ee le rs To ta l P e rc en ta ge G row th

2 03 ,6 97 5 ,0 76 ,2 21 2 76 ,7 19 6 ,2 79 ,9 67 1 8. 1

2 75 ,2 24 5 ,6 24 ,9 50 3 40 ,7 29 7 ,2 29 ,4 43 1 5. 1

3 19 ,2 60 6 ,5 24 ,9 42 3 95 ,2 46 8 ,3 86 ,1 54 1 6. 0

INDIA HAS BECOME A LAUNCH PAD

R is in g s al es a nd s t ro ng g row th pr os p ec ts he ig ht en ed th e p op ul ar it y of a ut o s to ck s i n J ul y 20 04 as f or ei gn in s t it ut io na l i nv es to rs (F IIs ) i nc re as ed th ei r s ta ke s in ke y a ut om ob il e c om pa ni es l ik e M a hi nd ra & M ah in dr a, A s h ok L ey la nd , M ar ut i U dy og , TV S M o to rs a nd H e ro H o nd a.

G lo ba l na me s s u ch as D a im le r C hr ys le r an d P ors ch e ha ve b eg un i nt ro du ci ng t he ir n ew o ff er in gs i n I nd ia . D ai ml er Ch ry s l er pl an s to la un ch t he ne w M e rc ed es S LK ro ads te r, w hi ch h as ju s t h it E ur op ea n r oa ds , in I nd ia b y O ct ob er - N o ve mb er 2 00 4. P o rs c he i s b ri ng in g in t he C ay en ne an d T oy ot a i s p la nn in g a s i mu lt an eo us r el ea s e o f it s IM V .

20

A u t om ob i le e xp or t (N u mb er s ) C at eg or y P as s e ng er Ca r M ul ti U ti li ty V e hi cl es C o mm er ci a l V eh ic le s Tw o Wh ee le rs Th re e Wh ee le rs To ta l P e rc en ta ge G row th 2 00 2- 03 7 0, 82 8 1 ,1 77 1 2, 25 5 1 79 ,6 82 4 3, 36 6 3 07 ,3 08 6 6. 4 2 00 3- 04 1 26 ,2 49 3 ,0 67 1 7, 22 7 2 64 ,6 69 6 8, 13 8 4 79 ,3 50 5 6. 0 2 00 4- 05 1 67 ,6 59 4 ,0 73 2 2, 87 7 3 51 ,4 80 9 0, 48 8 6 36 ,5 77 3 2. 8

TRENDS AND KEY ISSUES

T he l at es t tr en ds an d ke y i s s u es in t he m od er n au to mo bi l e ma rk et ne ed t o be c on s i de re d fo r s uc ce s s fu l e nt ry in th e I nd ia n M ar ke t.

1. Government The Enabler

I n c on tr as t o ve r t he p as t, I nd ia n G ov er nm en t ha s s w it ch ed ov er it s ro le f ro m c on tr ol le r t o e na bl er . Th e f oc us i s on p ro vi di ng be tt er in fr as tr uc tu re , gr ow th o ri en te d ec on om ic po li ci es an d ri gh t e nv ir on me nt to at tr ac t in ve s t me nt s . An a mb it i ou s pr oj ec t of i nt er s t at e hi gh w a y ne tw or k, ca ll ed go ld en

q ua dr an gl e, i s in it s a dv an ce d s t ag es o f im pl em e nt a t io n.

21

P ol lu ti on c on tr ol h as b ec om e an ot he r pr io ri ty a re a. Th er e is a p ro po s a l t o b an a ll th e ve hi cl es ol de r th an 10~ 15 ye ar s , w h ic h is li ke ly t o b oo s t th e d em an d o f mo de rn au to mo bi l e.

T he i mp or t d ut ie s on th e C BU a nd U s e d ve hi cl es ar e de s i gn ed t o p ro te ct t he i nt er es ts of th e au to mo bi l e ma nu fa ct ur er s i n In di a, a n in ce nt iv e to a tt ra ct f or ei gn in ve s t me nt .

G o ve rn me nt h as al s o cu t th e ex ci s e du ty t o b oo s t th e de ma nd . A lt ho ug h, i t h as m et w it h a l im it e d s u cc es s in pa s t , w i th a f av or ab le e co no mi c

e nv ir on me nt , G o ve rn me nt ma y t ak e th es e p ro ac ti ve s te ps a ga in . T he o il co mp an ie s a re a bo ut t o be pr iv at is ed w h ic h is li ke ly to m ak e t he m f le xi bl e a nd cus to me r fr ie nd ly . Th es e d ev el op me n ts h av e m ad e In di a a n a tt ra c ti v e a nd p ro mi s i ng d es t in at i on fo r an y gl ob al p la ye r.

2. Competition Cut Throat

T he e nt ry o f m ul ti n at i on a ls ha s p ut i mm en s e pr es s ur e on In di an c om pa ni es . S om e o f th em h av e e nt er ed i nt o j oi nt v en tu re s w it h m ul ti na t io n al s ; a f ew o th er s h av e in ve s t ed he av il y o n R &D to b e o n t he ir ow n , o th er s pe ri s h ed . Th e ma rk et h as n ow po la ri ze d i nt o t w o d is ti nc t s eg me nt s : I n d ia n Pl ay er s : Th os e w ho in ve s t ed i n R& D s u rv iv ed . Th ey co ul d la un ch n ew m od el s , re ta in t he ir d ea le r ne tw or k a nd i mp ro ve o n th ei r s e rv ic e in d ue c ou rs e of t im e. Th ey ha ve s t ra te gi ca l l y l ev er ag ed t he ir l ow c os t s tr uc tu re to c re at e pr ic e ba rr ie r f or th e co mp et i t io n. M os t of th em of fe re d v al ue fo r m on ey pr od uc ts t o o ffs et th ei r w e ak ne s s i n te ch no lo gy an d s t yl in g. M u l ti n a ti on al s : Th e mu lt in a ti on a l s h av e la un ch ed in te rn at i on a l pr od uc ts w it h be tt er te ch no lo gy an d s t yl in g at h ig he r p ri ce p oi nt s . T he s e p ro du ct s

22

a pp ea le d to a di ff er en t c la s s o f c us t om er s w h o w er e va lu e- co ns ci ou s . Th is c la s s of cu s t om er s ha s a n at ti tu de t o ap pr ec ia t e ev ol ve d p ro du ct o ff er in gs a nd bu yi ng p ow er t o p ur ch as e t he m. Bo th V a lu e c on s c io us a nd P ri ce c on s c io us c us to me r s e gm en t co -e xi s t in In di an ma rk et to da y. Th e l at er i s l os in g it s s ha re r ap id ly . A n y p ot en ti a l en tr an t c an c on s i de r la un ch in g t he p ro du ct s t ar ge te d at V a lu e co ns c io us s e gm en ts . H o w e ve r, th e v al ue

p er ce pt io ns o f th e t ar ge t s eg me nt s h ou ld b e a na ly s e d i n d ep th . T he f ea tu re s p ri ce p ac ka ge s h ou ld en s u re an a tt ra c ti v e va lu e pr ep os it io n f or th e

c us to me rs .

3. Customer The King

U n do ub te dl y t he c us to me r h as be co me th e K i ng . T he m od er n c us t om er is ar me d w it h IT an d ha s h ig he r bu yi ng p ow e r. Th e e ve r- i nc re as in g e xp ec ta t io ns fr om p ro du ct s a nd s er vi ce s a re a ma jo r ch al le ng e fo r al l t he p la ye rs in t he ma rk et . T he s of te r is s ue s h av e ga in ed as m uc h i mp or ta nc e as pr od uc t fe at ur es in hi s b ra nd d ec is io ns . Th er e is hi gh er p ro pe ns it y t ow ar ds c ho os in g br an d t ha t b ef it ti ng th e s el f- i ma ge . In t he pr es en t m ar ke t s ce na ri o, th e t ra ns it io n f ro m pr od uc ts to br an ds i s co mp le t e. Th e i nt an gi bl e o ff er in gs ha ve ga in ed as m uc h im po rt an c e as th e ta ng ib le p ro du ct f ea tu re s . A ny ne w e nt ra nt s ho ul d t he re fo re h av e a gr ea te r fo cu s on b ra nd b ui ld in g. M on it or in g cus to me r

s at is fa ct io n p er io di ca l ly is a ls o v er y cr it ic a l R es ou rc es a nd ef fo rt s pu t b eh in d t he s e a ct iv i ti e s s ho ul d b e co ns id er ed a s i nv es tm en t on th e br an d fo r u lt im a te s u cc es s .

4. Customer Care - not just Service

A f te r s a le s er vi ce is th e cl ic h d de s c ri pt io n o f t he fu nc ti on . Th e c us t om er to da y i s lo ok in g b ey on d j us t f ix in g t he pr ob le ms . T he s e rv ic e ex pe ri en ce , a mb ie nc e

23

a nd t he e xp er ti s e ar e s ou gh t af te r. 24 -h ou r b re ak do w n s e rv ic e is no t un co mm on . T he po te nt ia l en tr an t ne ed s t o lo ok at th is fu nc ti on i n la rg er p er s p ec ti ve . I t s h ou ld b e c us to me r c ar e ra th er t ha n m er e A f te r S a le S er vi ce . R ai s o n d e en tr e o f th is fu nc ti on s h ou ld be c us to me r de li gh t. F ix in g t he au to mo bi l e s h ou ld m er el y be th e w ay t o a ch ie ve i t. T hi s ap pr oa ch w o ul d m ea n h ig he r in ve s t me nt s i n w o rks ho ps . M or e i mp or ta nt ly a f re s h a pp ro ac h t o t he in ta ng ib l e s o ft er is s u es o f th e c us to me r re la ti on s h ip is r ec om me nd ed .

5. Pollution and Safety norms

I nd ia n t w o w he el er s h av e a lr ea dy m et t he mo s t s t ri ng en t in te rn at io n a l n or ms o f p ol lu ti on . Th e ca rs ar e no t le ft fa r b eh in d. G ov er nm en t o f I nd ia i s d ea d s e ri ou s a bo ut e nf or ci ng th em . E ur o I I v eh ic le s ha ve b ec om e a no rm i n th e N CR re gi on , M u mb ai a nd K ol ka ta . S o on t he s e no rm s w ou ld be e nf or ce d in 6 ot he r m et ro c it ie s a nd e ve nt ua ll y al l o ve r In di a. A n y n ew en tr an t p la nn in g t o ma ke it b ig i n I nd ia , s ho ul d ke ep in pa ce w i th th e l at es t i nt er na ti on a l p ol lu ti on co nt ro l no rm s r ig ht fr om th e i nc ep ti on . I t w o ul d m ea n hi gh er le ve l of i nv es tm en ts i n m od er n t ec hn ol og y f or ef fi ci en t e ng in es . S uc h in ve s t me nt s a re t he b us in es s c om pu ls io n, h en ce s h ou ld no t be co mp ro mi s e d up on . S a fe ty in mo to r v eh ic le s is r el at iv e l y n eg le ct ed a re a i n In di an m ar ke t. Th er e a re o nl y a h an df ul m od el s w i th s af et y f ea tu re s s u ch as ai rb ag , c ru mp le zo ne e tc . B ut t he a w a re ne s s is in cr ea s i ng r ap id ly . R ec en tl y us e o f s e at be lt s ha s b ee n ma de m an da to ry . It is th er ef or e r ec om me nd ed th at t he mo de ls b e la un ch ed w it h l at es t in te rn at i on a l s ta nd ar ds o f s af et y. A n y e ff or ts t o cr ea te aw ar en es s a bo ut s af et y in a ut om ob il e s w o ul d g en er at e g oo dw i ll a mo ng th e c us to me r fr at er ni ty an d w o ul d a ls o re ce iv e e nc ou ra ge me n t f ro m G o ve rn me nt d ep ar tm en t .

24

6 . U s e d ve h i cl e Bu s in es s M ar ut i a nd F or d ha ve pi on ee re d in th is bus in es s in In di a. Ch ai n o f au th or is ed s h op s is s et u p to tr ad e- in t he us ed v eh ic le s . T he v en tu re is v er y s u cc es s f ul , a s t he s e c ha in s ha ve e me rg ed as pr ef er re d d es t in at i on s f or tr ad in g us ed c ar s . C us t om er s a dm ir e t he c on ve ni en ce a nd t ra ns pa re nc y o ff er ed b y t he m, un li ke t he o pp or tu ni s t ic a tt it ud e of th e un or ga ni s e d pl ay er s w h o c on tr ol le d th e ma rk et e ar li er . T hi s s tr at eg ic b us in es s un it is s tr on gl y r ec om me nd ed fo r th e n ew e nt ra nt s . T hi s bu s i ne s s i s co mp li me n ta ry to th e m ai n bus in es s .

GLOBAL PERSPECTIVE
T he In di an au to mo t iv e i nd us tr y h as f lo ur is he d l ik e ne ve r b ef or e i n th e r ec en t y ea rs . T hi s ex tr ao rd in ar y gr ow t h th at th e In di an a ut om ot iv e i nd us tr y h as w it ne s s ed is a re s u lt o f a t w o ma jo r fa ct or s na me ly , th e im pr ov em en t i n t he l iv in g s t an da rd s of t he m id dl e cl as s , a nd an i nc re as e in th ei r di s p os a bl e i nc om es . M o re ov er , th e l ib er al i za t i on s te ps , s u ch as , r el ax at i on o f t he f or ei gn e xc ha ng e a nd e qu it y re gu la ti on s , r ed uc ti on of ta ri ff s on im po rt s , an d r ef in in g t he b an ki ng p ol ic ie s , i ni ti a t ed by t he G ov er nm en t o f In di a, ha ve pl ay ed an eq ua ll y im po rt an t r ol e in b ri ng in g th e In di an A ut om ot iv e in du s t ry t o g re at he ig ht s . I t is es ti ma te d t ha t th e s al e o f pa s s e ng er ca rs ha ve tr ip le d c om pa re d to t he ir s al e i n t he la s t f iv e y ea rs . T hu s , t he s a le of c ar s ha s re ac he d a fi gu re o f 1 mi ll io n us er s an d i s e xp ec te d t o in cr ea s e f ur th er . It' s al s o t o b e no te d th at th e de ma nd fo r lu xu ri ou s m od el s , S U V s , an d mi ni - c ar s f or fa mi ly ow ne rs , h av e s ho t up , l ar ge ly du e t o i nc re as e in th e c on s u me r' s b uy in g c ap ac it y. T he i nc re as ed de ma nd fo r I nd ia n au to mo bi l es ha s r es ul te d i n a l ar ge n um be r o f m ul ti - na ti on al au to co mp an ie s , e s p ec ia ll y f ro m J ap an , U . S . A ., a nd E ur op e,

25

e nt er in g t he In di an m ar ke t a nd w o rk in g in co ll ab or a ti on w it h th e In di an f ir ms . A ls o , t he in s t it ut io na l i z at i on o f a ut om ob il e f in an ce ha s f ur th er p av ed t he w ay to s u s t ai n a lo ng - te rm h ig h gr ow th f or t he in du s t ry .

AUTO POLICY OF GOVERNMENT OF INDIA

Vision
T o e s t ab li s h a g lo ba ll y co mp et i t iv e a ut om ot iv e in du s t ry in I nd ia an d t o d ou bl e i ts co nt ri bu ti on to th e e co no my by 2 01 0.

Policy Objective
T hi s p ol ic y ai ms to p ro mo te i nt eg ra t ed , p ha s e d, e nd ur in g a nd s e lf -s us t ai ne d g row th of t he In di an au to mo t iv e i nd us tr y. Th e o bj ec ti ve s a re to :

E xa lt th e s ec to r a s a le ve r of i nd us tr ia l gr ow th a nd em pl oy me nt an d t o a ch ie ve a hi gh de gr ee of v al ue a dd it io n i n th e c ou nt ry ;

P ro mo te a g lo ba ll y c om pe ti t i ve a ut om ot iv e i nd us tr y an d e me rg e a s a g lo ba l s ou rc e f or a ut o c om po ne nt s ;

E s t ab li s h

an

in te rn at i on a l

hu b

f or

ma nu fa ct ur i ng

s ma ll ,

a ff or da bl e

p as s en ge r c ar s a nd a ke y ce nt er f or m an uf ac tu r in g T ra ct or s a nd Tw ow h ee le rs i n t he w or ld ;

E ns ur e a b al an ce d tr an s i ti on to o pe n t ra de at a m in im a l ri s k to th e In di an e co no my a nd l oc al in du s t ry ;

C on du ce in ce s s an t mo de rn iz at i on of t he in du s t ry an d fa ci li t a te in di ge no us d es ig n, res ea rc h an d de ve lo pm en t ;

S te er In di a' s s of tw ar e i nd us tr y i nt o a ut om ot iv e te ch no lo gy ; A s s is t d ev el op me nt of v eh ic le s pr op el le d b y al te rn at e en er gy s ou rc es ; D ev el op me nt of d om es ti c s a fe ty an d e nv ir on me nt a l s ta nd ar ds a t p ar w i th

26

i nt er na t io na l s t an da rd s S IA M w e lc om ed t he a nn ou nc em en t o f A ut o P o li cy , an d f ee ls th at t he po li cy w o ul d s e rv e a s a r ef er en ce do cu me nt f or al l s t ak e ho ld er s an d o th er in te re s t ed p ar ti es .

T he A ut o P ol ic y h as s pe lt ou t t he d ir ec ti on o f g ro w t h f or th e a ut o s e ct or i n I nd ia an d a dd re s s e s mo s t co nc er ns of t he au to mo bi l e s e ct or , in cl ud in g

P ro mo ti on

of

R& D

in

t he

a ut om ot i ve

s ec to r

to

e ns ur e

c on ti nu ou s

t ec hn ol og y up gr ad at io n, bu il di ng b et te r de s i gn in g c ap ac i ti e s to re ma in c om pe ti t iv e ; i mp et us to A lt er na ti ve F ue l V e hi cl es t hr ou gh a pp ro pr ia te l on g t er m f is ca l s tr uc tu re t o fa ci li t a t e t he ir a cc ep ta nc e ;

E mp ha s i s o n lo w em is s i on fu el a ut o t ec hn ol og ie s a nd a va il ab i l i ty of a pp ro pr ia te au to fu el s a nd

E nc ou ra ge me n t to c on s t ru ct io n o f s af er bu s / tr uc k b od ie s - s ub je ct in g u no rg an is ed s ec to r al s o t o 1 6% ex ci s e du ty on bo dy bu il di ng ac ti vi t y as in c as e o f O EM s .

T he po li cy h as r ig ht ly r ec og ni s e d t he n ee d f or m od er ni s i ng th e pr of il e o f v eh ic le s to ar re s t de gr ad at io n o f ai r q ua li ty . Th e te rm in al li fe p ol ic y fo r c om me rc i a l v eh ic le s an d mo ve t ow ar d in te rn at i on a l t ax in g po li ci es l in ke d to ag e o f ve hi cl es , ar e s te ps i n t he ri gh t d ir ec ti on . S IA M ha s al w a ys b ee n a dv oc at in g e nc ou ra ge me n t o f va lu e ad di ti on w it hi n th e c ou nt ry a ga in s t me re tr ad in g ac ti vi t y. H o w e ve r, t hi s a s p ec t h as no t b ee n fu ll y a dd re s s ed . Th e A ut o P o li cy a ll ow s au to ma t ic ap pr ov al f or f or ei gn eq ui ty i nv es tm en t u p to 10 0% i n th e au to mo ti ve s e ct or an d d oe s no t la y d ow n an y

27

m in im um in ve s t me nt cr it er i a. T he re co mm en d at i on of p ro mo ti ng p as s en ge r c ar s of l en gt h up t o 3 .8 m et er s t hr ou gh ex ci s e be ne fi ts i s no t i n li ne w it h t he fr ee ma rk et c on ce pt a nd ma y l ea d t o m ar ke t di s t or ti on . H o w e ve r, w it h t he A ut o P ol ic y i n pl ac e, th e au to mo ti v e in du s t ry w o ul d g et f ur th er fi ll ip to be co me v ib ra nt a nd g lo ba ll y c om pe ti t iv e. Th e in du s t ry w ou ld g et th e r eq ui re d s up po rt fr om ot he r M in is tr ie s a nd de pa rt me nt s of G ov er nm en t o f In di a i n a ch ie vi ng th e g oa ls l ai d do w n i n th e a ut o po li cy .

UTILITY VEHICLE
Sport Utility Vehicle (SUV) History SUV Design Characteristics Development of the SUV SUVs in Recreation and Motorsport SUV Popularity But The Truth Is Current Indian Scenario Multi Utility Vehicle (MUV)

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Introduction Rural Orientation Road Ahead

UTILITY VEHICLE
A SPORT UTILITY VEHICLE ( SUV ) or o ff -r oa d e r is a ve hi cl e t ha t c om bi ne s t he l oa d- h au li ng an d p as s e ng er - ca rr yi ng c ap ac i ty o f a la rg e s ta ti on w ag on o r mi ni va n w it h f ea tu re s d es ig ne d f or o ff - r o ad d ri vi ng . I n mo re r ec en t y ea rs , th e te rm ha s al s o gr ow n t o e nc om pa s s ve hi cl es w it h s i mi la r s iz e a nd s ty le t ha t a re m ar ke te d as s po rt u ti li ty v eh ic le s , bu t w hi ch d o n ot a ct ua ll y in co rp or at e s u bs ta nt ia l of f- ro ad f ea tu re s . A ne w c at eg or y, th e cr os s ov er S U V us e s c ar c om po ne nt s fo r li gh te r w e ig ht an d b et te r ec on om y.

History
M er ce de s a nd L ex us ar e p ro ba bl y n am es th at y ou a re un li ke ly t o a s s o ci at e w it h a ut il it y v eh ic le . B uy er s to da y a re a pa mp er ed l ot a nd t he ap ar t fr om pow er & r ug ge dn es s , th e cu rr en t m od el s of "b ru te - ut es " o ff er e xt re me ly g en er ou s

h el pi ng s of lu xu ry . H ow ev er t od ay u lt ra - c la s s y a nd ul tr a- co mf or ta bl e S p or t U ti li ty V eh ic le (S U V ) i s h as a r at he r i nt er es ti ng h is to ry , da ti ng ba ck t o t he

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S ec on d W or ld Wa r. T he c on ce pt or ig in at ed i n th e 19 30 s f ro m t he U S A r my' s n ee d of an al l- te rr ai n, r ug ge d v eh ic le t ha t co ul d w it hs ta nd t he ri go rs o f w a r. S o me of t he re qu ir em en t s s p ec if ie d of th e ve hi cl e w e re - fo ur -w h ee l d ri ve , mi ni mu m s t an da rd s f or en gi ne p ow e r, c ro s s c ou nt ry p er fo rm an ce & g ra de c li mb in g ab il it y, m in im um g ro un d c le ar an c e of 6- 1/ 4 i nc he s , a p ay lo ad ca pa ci ty o f 6 00 po un ds , an d a w ei gh t l im it a t io n o f 13 00 p ou nd s . T he fi rs t b at ch o f 70 f ou r- w he el d ri ve li gh t mi li t ar y c ar s w as b ui lt b y th e B an ta m Ca r C om pa ny of P en ns y lv an ia , U S A . Th e c ar s w e re ca ll ed G P s (G e ne ra l P ur pos e V e hi cl es ) an d ca me to b e k now n w or ld w i de as J ee ps . By t he en d o f th e w ar 63 5, 00 0 v eh ic le s w er e b ui lt an d th e "J e ep " na me w as of fi ci al l y re gi s t er ed b y W il ly s . Wi ll ys bu il t t he f ir s t c iv il ia n je ep (CJ ) i n 19 45 , a nd w h il e t he c om pa ny it s e lf di d n ot s u rv iv e, t he J ee p di d, a nd ne w a nd im pr ov ed mo de ls o f t he C J w e re in tr od uc ed r ig ht t hr ou gh t he 80 s . I n 1 97 0s a n um be r of co mp an ie s i nc lu di ng G M , F o rd an d T oy ot a i nt ro du ce d s ma ll er v er s i on s of 4 WD p ic ku ps w hi ch of fe re d a lo t m or e f ea tu re s th an th e J ee p. T he p ri ma ry dr iv er s o f gr ow t h i n S U V s al es h av e b ee n t he de cl in e i n t he c os t of gas ol in e t o co ns um er s a nd i nc re as in g g lo ba l c om pe ti t io n. G lo ba l c om pe ti t io n h as f or ce d a ut o m an uf ac tu r er s to be tt er u nd er s t an d c on s u me r n ee ds a nd bu il d i nn ov at iv e p ro du ct s , s uc h as S U V s , t o s a ti s f y t ho s e n ee ds .

T he La nd Cr ui s e r, Wr an gl er , Ch er ok ee , Wa go ne er , F or eR un ne r a nd a hos t o f o th er A m er ic an , Eu ro pe an a nd J ap an es e u ti li t y v eh ic le s w e re a ll d es ig ne d t o k ee p yo u g oi ng e ve n w he n th e ro ad en de d. T he v eh ic le s w er e us e d fo r f am il y h au li ng , va ca ti on tr av el , an d f or i ts t ow in g c ap ac it y, bu t r ug ge dn es s s t il l r em ai ne d t he hi s t or ic e s s e nc e of s p or t- u ti li ty ve hi cl es a nd co nt in ue d to be t he ir

30

f un da me nt a l a pp ea l. T od ay S U V s ar e b ei ng us ed e qu al ly on c it y ro ads f or d ai ly t ra ve l, an d w hi le th e po w e r a nd t ou gh ne s s o f t he ve hi cl e s ti ll re ma in k ey p ur ch as in g c ri te ri a , n or ma l p as s e ng er - ca r f ea tu re s l ik e ri de qu al it y, co mf or t, r oo mi ne s s an d co nv en ie nc e a re in cr ea s i ng ly be in g u s e d to di ff er en ti a te br an ds .

T he pr es en ce o f S po rt U t il it y V e hi cl es i n I nd ia is n eg li gi bl e, an d t he w es te rn a ur a fo r t he S U V ha s n ot f ul ly p en et ra t ed i nt o th e In di an m ar ke t. U ti li ty V eh ic le s as a c at eg or y w ou ld ac co un t fo r le s s t ha n 1 i n 2 0 s a le s in th e c ou nt ry . H o me gr ow n mo de ls l ik e t he S um o a nd t he A r ma da ar e be in g us e d mo re o n r ur al r oa ds a nd f or h au li ng l ug ga ge & to ur is ts .

H o w e ve r w it h th e Ta ta S af ar i a lr ea dy o n In di an ro ad s , a nd w i th s ev er al m an uf ac tu re s i nc lu di ng T oy ot a, H y un da i an d D a ew oo p la nn in g to i nt ro du ce m ul ti - pu rp os e ve hi cl es i n th e ma rk et , on e ma y ju s t a bo ut s e e t he s t ar t o f th e S U V c ra ze t ha t is s o p ro mi ne nt th e w o rl d o ve r.

SUV DESIGN CHARACTERISTICS

S U V s ha ve th e g en er al s h ap e o f a s ta ti on w a go n, b ut ha ve a t al le r s e tu p d ue to t he m or e up ri gh t s ea ti ng s ta nc e a nd a s us pe ns i on d es ig ne d fo r g iv in g gr ou nd c le ar an c e f or o ff -r oa d dr iv in g. T yp ic al ly , a ll f ou r w he el s c an be dr iv en , u nl ik e m os t c on ve nt io na l c ar s i n w h ic h o nl y th e fr on t or r ea r w he el s r ec ei ve d ri ve . T he d es ig n a ls o al lo w s fo r a la rg e en gi ne co mp ar tm e n t, an d ma ny S U V s h av e l ar ge V - 6 o r V -8 en gi ne s . I n c ou nt ri es w he re f ue l is mo re e xp en s i ve , b uy er s o ft en o pt f or d ie s e l en gi ne s , w hi ch a re mo re fu el ef fi ci en t ( an d d ie s e l fu el it s e lf i s of te n m uc h c he ap er ).

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DEVELOPMENT OF THE SUV

D es c en de d f ro m c om me rc i a l an d mi li ta ry v eh ic le s s uc h a s t he J ee p a nd L an d R ov er , t he y h av e b ee n p op ul ar fo r ma ny y ea rs w it h r ur al bu ye rs d ue t o t he ir o ff r oa d ab il it i es . H ow e ve r, i n th e la s t 2 5 y ea rs , a nd e ve n mo re i n th e la s t d ec ad e, t he y ha ve b ec om e p op ul ar w i th ur ba n bu ye rs . C ons eq ue nt ly , m or e mo de rn S U V s o ft en c om e l ad en w i th lu xu ry f ea tu re s an d s om e cr os s ov er S U V s , s u ch a s t he B M W X 5 , th e A c ur a M D X , a nd th e T oy ot a RA V - 4, h av e a do pt ed l ow er r id e h ei gh ts an d m or e c ar - li ke s us pe ns io n s et ti ng s t o b et te r re fl ec t t he ir t yp ic al us e ( ov er w h el mi ng ly , f or n or ma l on -r oa d dr iv in g) .

SUVS IN RECREATION AND MOTORSPORT

S om e p ri va te S U V o w n ers d o in de ed t ak e th ei r ve hi cl es o ff t he ro ad t o e xp lo re p la ce s o th er w i s e u nr ea ch ab le b y v eh ic le o r f or th e s he er e nj oy me nt o f t he d ri vi ng . In A us tr al ia , Ch in a, E ur op e an d th e U .S . a t le as t, ma ny 4 WD cl ub s h av e b ee n f or me d f or t hi s p ur pos e. M o di fi ed S U V s al s o t ak e pa rt in ra ce s , mo s t f am ou s l y i n t he P a ri s - D a ka r R a ll y, a nd th e A us tr al ia n S af ar i.

SUV POPULARITY
S U V s ha ve be co me p op ul ar in In di a f or a v ar ie ty of r ea s o ns . O w ne rs p oi nt to t he ir l ar ge , co mf or ta bl e c ab in s (w hi ch h av e n ea rl y t he pa s s en ge r a nd e qu ip me nt c ar ry in g ca pa bi li t i es o f mi ni va ns ), p er ce iv ed s a fe ty , a nd t he re cr ea t io na l p os s ib il it i es o f t he v eh ic le s . A dd it io na l ly , mo s t l ar ge S U V s h av e fa r g re at er t ow in g c ap ac it i es th an co nv en ti on al ca rs , a nd i n t he ca s e of t ra il er ab l e b oa ts h av e s up er io r a bi li ti e s t o la un ch an d r et ri ev e th os e b oa ts f ro m s l ip pe ry b oa t r am ps (a nd , in de ed , fr om m an y pl ac es w he re no m ad e ra mp ex is ts ).

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U n do ub te dl y, t ho ug h, s om e o f th ei r s u cc es s is d ue t o t he ir r ug ge d, p ow er fu l i ma ge , a s u bs ta nt ia l fa ct or fo r m an y pe op le w ho mi gh t m or e lo gi ca l ly c ho os e a m or e ec on om ic a l an d ch ea pe r m in iv an or s t at io n w ag on . V eh ic le ma nu fa ct ur er s h av e be en a bl e t o s el l t he i ma ge of S U V s ef fe ct iv e ly , w i th pe r- v eh ic le p ro fi ts s u bs ta nt ia l ly hi gh er th an ot he r au to mo bi le s . Th e s im pl e des ig n a nd of te n o ut da te d t ec hn ol og y (b y p as s en ge r ca r s t an da rd s ) of te n ma ke s th e v eh ic le s m uc h c he ap er t o m ak e t ha n co mp ar ab ly - p ri ce d pa s s e ng er ve hi cl es .

REASONS VEHICLES

WHY

PEOPLE

BUY

SPORT

UTILITY

Reason #1
T he y w a nt t he o ff ro ad in g ca pa bi l it i es . (M a ny s p or t ut il it y ve hi cl es do no t do w el l i n t ru e o ff ro ad in g c on di ti on s , a nd th e n um be r o f pe op le w h o ac tu al ly ta ke t he m of fr oa d is s ma ll i n c om pa ri s o n to t he nu mb er o f pe op le w h o dr iv e t he m. )

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Reason #2
T he y w an t a v eh ic le th at w il l g et ar ou nd be tt er i n t he s no w . (W hi le t hi s m ay

b e tr ue w h en y ou co mp ar e a n S U V to a r ea r w he el dr iv e ca r, i t ma y or ma y no t b e t he ca s e w he n co mp ar ed to a fr on t w h ee l o r al l w h ee l d ri ve ca r w it h p ro pe r t ir es .)

Reason #3
T he y w a nt t he c ar go c ap ac it y an d fe el t ha t a n S U V h ol ds mo re t ha n a s t at io n w ag on . ( Th e ca rg o ar ea of an S U V m ay i nd ee d b e ta ll er , bu t i n ma ny i ns ta nc es i s no t a s lo ng a s th at o f a s t at io n w a go n. )

Reason #4
T he y fe el an S U V is a s af er ve hi cl e be ca us e i t' s la rg er an d he av ie r b ui lt . A n d t he y l ik e a v eh ic le w it h t al le r s ea ti ng . (T he re ha ve be en co nc er ns ab ou t r ol lo ve r, b ut mo s t m an uf ac tu r er s ar e w o rk in g o n s ys te ms to m in im i z e t he ri s k .)

Reason #5
T he y ne ed a c om bi na ti on o f p ul li ng ca pa ci t y an d p as s en ge r s e at in g. It ' s t ru e th at m an y S U V s ar e ca pa bl e o f t ow in g ov er 2 50 0 p ou nds an d m os t of th em s e at f iv e p as s en ge rs ; s om e e ve n o ff er t hi rd r ow s e at in g.

BUT THE TRUTH IS

M o s t pe op le bu y a n S U V b ec au s e t he y ca n. I t ma y no t tr ul y fi t an y of th ei r n ee ds , b ut i t fu lf il ls th ei r w an ts . W e In di an s ar e in lo ve w it h ou r c ar s . We a pp re ci at e go od s ty li ng , a nd S U V s ar e c ur re nt ly in v og ue .

34

P ar t of th e re as on w e w or k f or a li vi ng is to o bt ai n th e t hi ng s w e w an t, i nc lu di ng o ur ch oi ce of tr an s p or ta ti on . Y es , S U V s us e m or e ga s t ha n mo s t c ar s , b ut th er e a re hy br id S U V s c om in g a dd re s s t ha t co nc er n. Th e 20 05 F o rd E s c ap e H y br id i s o ne e xa mp le , a nd i t ap pe ar s to b e a g oo d o ne . W at ch fo r e ve n mo re S U V h yb ri ds t o b e in tr od uc ed if b uy er s de ma nd t he m. S om e o f th e c om pa ct S U V s ge t f ai rl y de ce nt g as m il ea g e- - s hi ft in g dow nw ar ds i n s iz e is pr ob ab ly a g oo d o pt io n fo r m an y dr iv er s . A n ot he r tr en d to w at ch f or is t he ad di ti on of c le an - b ur ni ng di es el en gi ne s t o S U V s .

CURRENT INDIAN SCENARIO

D o me s t ic c on s u me rs s e em t o ha ve a pe nc ha nt fo r s po rt s u ti li ty v eh ic le s ( S U V s ). S o w h at i f th ey a re f ue l- g uz zl er s a nd qu it e e xp en s i ve ? A cc or di ng t o in du s t ry e s t im at e s , pr em iu m S U V s a le s in cr ea s e d b y a lm os t 3 00 % t o n ea rl y 5 ,2 37 un it s i n 04 f ro m 1, 25 0 un it s s o ld in 0 3. T hi s me an s th at th e pr em iu m S U V s now co mp et es ne ck - an d- n ec k w i th th e E s eg me nt s ed an . If t hi s t re nd co nt in ue s , t he S U V ma y w el l o ve rt ak e th e Es eg me nt s ed an . Th is is n t to o b ad , c ons id er in g th at m os t o f th e v eh ic le s ar e p ri ce d upw ar ds o f Rs 14 l ak h. S ev er al n ew l au nc he s a re al s o in t he of fi ng in th e d om es ti c ma rk et . K o re an ca r m ak er H yu nd ai p la ns t o l au nc h t he T uc s o n, w h il e J ap an es e au to m aj or To yo ta i s e xp ec te d t o fo ll ow w i th th e F o rt un er . Cu rr en tl y, th e H on da C R- V an d F o rd E nd ea vo ur a cc ou nt f or t w o -t hi rd s o f th e v ol um e s al es in th e S U V s eg me nt . Ev en w it h m os t of t he S U V s i mp or te d i n th e c om pl et e l y b ui lt - u p un it (C BU ) f or m, m an uf ac tu re rs ar e s ti ll b ul li s h on t hi s s eg me nt .

35

I n In di a, S U V s h av e p ri ma ri ly be en di es el - d ri ve n. S o w h y ar e c ar ma ke rs i nt ro du ci ng th e m or e e xp en s i ve an d l es s fu el - ef fi ci en t S U V s th at r un o n pe tr ol ? T he re as on is t ha t t he s e ve hi cl es ha ve mo re pow er an d pe p e xa ct ly t he t hi ng t ha t S U V dr iv er s a re lo ok in g f or . F ew , i nc lu di ng H on da , c ou ld ha ve pr ed ic te d t he po pu la ri ty o f th e CR -V . T oy ot a l au nc he d th e L an dc ru is er P ra do w i th a 4- li tr e V 6 p et ro l e ng in e at Rs 3 5 la kh . V ar io us o th er ma nu fa ct ur er s a re lo ok in g a t t he pe tr ol S U V s eg me nt t oo . D ea le rs re po rt th at p et ro l S U V s ar e d es ir ed fo r th ei r ca r- l ik e co mf or t, s ec ur it y a nd ve rs a ti l it y, bu t n ot ne ce s s ar il y fo r th ei r o ff -r oa d a bi li ty . T he im pa ct of r is in g p et ro l pr ic es on a n ew f ou r- w he el d ri ve w i ll be of fs e t b y ga in s f ro m m ov in g t o a mo re ef fi ci en t v eh ic le . R es ea rc h s how s a n i nc re as in g pr ef er en ce fo r pe tr ol - dr iv en S U V s a s pr ic es mo ve u p. S up er r ic h cu s t om er s ar e lo ok in g fo r p ow e r, c om fo rt , l ux ur y a nd

r ef in em en t pr ov id ed by a p et ro l S U V , s ai d a T oy ot a La nd cr ui s e r de al er .

Segment clocks 300% growth in 2004 5,000 cars sold in 2004 against 1,250 in 2003 2 new models to take tally to 10 by year-end Growth and launches centred at lower price range Industry divided over growth sustainability Price ranges between Rs 11.7 lakh for the Forrester and

36

Rs 37.5lakh for the Landcruiser Prado MULTI UTILITY VEHICLES

M U LT I- U TI LI TY v eh ic le s (M U V ) ar e th e po or co us in s o f p as s en ge r ca rs . N ei th er di d t he y g et m uc h at te nt i on f ro m t he c us to me rs n or ha ve t he y t ri ed t o do s o . A b ou t th e on ly a tt en t io n t he y h av e g ot is f ro m th e go ve rn me nt , an d th at h as n ot al w a ys b ee n o f th e g oo d ki nd . B ut al l t hi s i s ch an gi ng n ow w i th th e M U V s s u dd en ly ca tc hi ng th e f an cy o f t he m ar ke t a nd m an uf ac tu re rs , i nc lu di ng g lo ba l m aj or s . T il l th e mi d- 1 99 0s , M U V s w e re s y no ny mo us w i th th e J e ep o f M &M (M ah in dr a & M a hi nd ra ). Th er e w er e o th er s , s uc h as t he Tr ek ke r fr om H in du s t an M ot or s , t he To w n a nd Co un tr y fr om Ba ja j Te mp o an d t he G yp s y f ro m M a ru ti U d yo g. B ut M &M r ul ed th e ma rk et ti ll T at a E ng in ee ri ng d ec id ed to e nt er th e s e gm en t t hr ou gh t he S u mo i n 19 95 . T he l au nc h o f t he S u mo n ot o nl y b ro ug ht i n th e m uc h- n ee de d c om pe ti t io n bu t al s o ex pa nd ed th e M U V s ' m ar ke t, w h ic h ti ll t he n w as ra th er s ma ll . Th e g oo d ol d M U V s ta rt ed ac qu ir in g a n ew s ta tu s , a lo ng w it h t he gl am or ou s l oo ks , to ma rk et i ts el f as a pe rs o na l ve hi cl e in th e u rb an ma rk et . W it h t he e nt ry o f t he S um o, t he re w as a s cr am bl e f or th e ma rk et , w i th th e M &M ' s A rm ad a a nd th e A r ma da G ra nd s l ug gi ng i t ou t w i th t he T re kk er an d t he T ow n a nd C ou nt ry . T he G yps y, be in g th e on ly p et ro l- en gi ne dr iv en M U V , n ev er r ea ll y m ad e a m ar k in th e m ar ke t a nd it w as al s o lo w d ow n M U L' s pr io ri ty . T oy ot a' s re ce nt en tr y w it h th e Q ua li s a dd ed a n ew di me ns io n to th e i nd us tr y.

RURAL ORIENTATION
T he M U V s h av e t ra di ti on a l ly be en vi ew ed as of f- th e- ro ad , ru ra l v eh ic le s

37

d es ig ne d m ai nl y f or t he hi nt er la nd . T hi s pu t a ca p o n th e g row th vo lu me s g iv en t he pu rc ha s i ng po w e r in th e r ur al ar ea s . Th e r ur al or ie nt at i on w as a ls o a no th er r ea s o n w hy M &M ne ve r re al ly tr ie d t o im pr ov e t he l oo ks of it s ve hi cl es or ma ke t he m dr iv er - fr ie nd ly . Th is is u nl ik e i n t he de ve lo pe d co un tr ie s w he re th e M U V s a re a s m uc h a ci ty v eh ic le a s a r ur al o ne . T he y w o ul d t yp ic al l y be us ed fo r w ee k- en d ca mp in g e xp ed it io ns , pi cn ic tr ip s an d s o on w h er e th e en ti re fa mi ly h ad t o t ra ve l w i th co ns id er ab le g ea r. S u ch a co nc ep t has ti ll n ow b ee n no ne xi s t en t in In di a. O f co ur s e , th e S um o an d th e A rm ad a t o a l ar ge ex te nt ga ve t he M U V a ci ty o ri en ta t io n f or b ot h pa s s en ge r a nd l ig ht g oo ds mo ve me nt . B ut it is t he Q u al is t ha t is m os t l ik el y to tu rn t he M U V i nt o a c it y ve hi cl e. O f co ur s e , i t h as n ot r ea ll y go t f ul l m ar ks on t he lo ok s , w h ic h is p er ce iv ed t o b e ou td at ed . B ut t he T oy ot a br an d eq ui ty m ay ov er co me th is h an di ca p an d t he Q ua li s co ul d p ro ve t o b e a m aj or t hr ea t in th e u rb an ma rk et t o t he ex is ti ng p la ye rs . G o ve rn me nt s a pp ea r t o b e fo nd of ti nk er in g w it h th e du ty s tr uc tu re f or th e M U V s w h ic h ha ve b ee n tr ea te d di s t in ct ly f ro m ca rs fo r t hi s pu rp os e . A co mp le x d ut y s t ru ct ur e ex is te d t il l 19 93 -9 4. M U V s w it h ca rr yi ng c ap ac i ty o f m or e th an n in e p er s o ns s u ff er ed a du ty of 4 0 pe r ce nt w h il e th os e w it h gr os s v eh ic le w ei gh t o f le s s t ha n 2 ,7 00 k g at 15 p er ce nt . F ro m 1 99 6- 97 , th is c om pl ex c la s s if ic at i on w as s im pl if ie d a nd al l M U V s w e re c ha rg ed a s in gl e du ty o f 20 p er c en t. H ow e ve r, i n th e ne xt t w o ye ar s , t he g ov er nm en t h ik ed d ut ie s r ea ch in g a m ax im um of 3 0 pe r c en t. Th e re -o rg an is at io n of e xc is e du ty s l abs i n t he la te s t B ud ge t f ur th er ra is ed th e im po s t 2 pe r ce nt t o 3 2 pe r ce nt . T he l og ic fo r s u ch f re qu en t c ha ng e of ra te s is no t cl ea r b ut i t ha s c er ta in ly i mp ac t ed on t he de ma nd fo r th e M U V s . I de al ly , M U V du ty ra te s o ug ht to b e

38

c lo s e r to t ha t o n c om me rc i al v eh ic le s r at he r t ha n to p as s en ge r ca rs , w hi ch i s n ow t he ca s e . T he go ve rn me nt ou gh t to pr om ot e t he u s a ge o f t he M U V s as a r ur al tr an s p or ta ti on ve hi cl e. G i ve n t he ro ad c on di ti on s in th e h in te rl an d, th e M U V s o ff er a s i mp le s ol ut io n as a g oo ds - cu m- p eo pl e mo ve r a nd mo re co s t e ff ec ti ve l y t ha n a co mm er ci a l v eh ic le . T he fa ct t ha t th e s h ar e o f th e M U V s in t ot al pa s s e ng er ca r s al es h as a ct ua l ly d ip pe d fr om a hi gh o f 2 4 p er c en t in 1 99 6- 97 to 1 8. 40 pe r c en t n ow s u ms up h ow t he in du s t ry ha s m is s e d th e gr ow t h cu rv e in th e l as t fe w y ea rs . W hi le on e r ea s o n co ul d be t he in va s i on of t he m ar ke t by n ew c ar mo de ls an d th e la ck of s im il ar ch oi ce i n th e M U V s , t he fa ct r em ai ns th at t he hi gh du ty s t ru ct ur e h as p us h ed up p ri ce s a nd s up pr es s ed d em an d ar ti fi c ia l l y.

ROAD AHEAD
T he M U V s e gm en t i s j us t re vv in g up an d p la ce d j us t as th e pa s s e ng er c ar s eg me nt w as in t he m id - 19 90s . T hi s s e gm en t c ou ld b e t he ne xt f oc us of th e g lo ba l pl ay er s ; w it h in co me s ri s i ng th e r ur al ma rk et h as b ec om e at tr ac t iv e . H y un da i is s a id to be t oy in g w i th t he id ea o f en te ri ng t hi s s eg me nt a nd t he p os s ib il it y o f D a im le rC hr ys le r i nt ro du ci ng a mo de l fr om t he M it s u bi s h i s t ab le i n t he ne ar fu tu re ca nn ot b e ru le d o ut . T he en tr y o f gl ob al p la ye rs in to t hi s s e gm en t co ul d a ls o d ev el op th e n as ce nt m ar ke t f or s p or ts ut il it y ve hi cl es (S U V s ) w hi ch i s a ct ua l ly a pa rt o f t he M U V s eg me nt w o rl dw id e. Co ns id er in g t he ir h ig h c os ts a nd l im i te d u ti li ty , S U V s ha ve n ot ca ug ht on i n t he co un tr y t il l n ow . M &M ' s m uc h- a w a it ed M U V s fr om t he S c or pi o p la tf or m a re to h it t he ma rk et i n t he ne xt on e y ea r. Th ey ar e e xp ec te d t o re dr aw th e l in es of c om pe ti t io n a nd al s o

39

t ra ns fo rm t he i ma ge o f M &M f ro m th at of a J ee p m an uf ac tu r er t o a t ru e M U V p ro du ce r. M U L c an b e ex pe ct ed t o p us h t he G y ps y fu rt he r d ow n it s pr io ri ty li s t a s i t co nc en tr a te s o n h ol di ng on to it s le ad er s h ip po s i ti on in th e pa s s en ge r ca r s eg me nt . B aj aj Te mp o h as be en p lu gg in g aw ay w i th a ve ra ge vo lu me s of ab ou t 5 ,0 00 v eh ic le s pe r a nn um . T he on e t o w a tc h w ou ld b e T at a En gi ne er in g w h ic h h as it s ha nds fu ll w i th th e c ar p ro je ct . T he c om pa ny ne ed s t o co me o ut w it h n ew er m od el s if i t is t o re ta in it s po s i ti on i n th e M U V s eg me nt . O v er al l, t he i nd us tr y de ma nd c an b e ex pe ct ed to b e s t ab le i n th e ne xt c ou pl e o f y ea rs w it h g row th be in g d ri ve n b y s u pp ly r at he r th an th e o th er w a y ro un d.

ANALYSIS AND INTERPRETATION

Table 1. Respondents Occupation
Respondent
B us in es s m an P r of es s io na l S t ud en t Tr av el A ge nt T o ta l

Numbers
58 33 12 17 1 20

Percentage
4 8. 33 2 7. 50 1 0. 00 1 4. 17 10 0. 00

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Student 10%

Travel Ag ent 14.17% Businessman 48.33%

Professional 27.5%

Analysis
F ro m th e a bo ve ta bl e, it is o bs e rv ed th at 4 8% o f U t il it y V eh ic le ow ne rs a re B us i ne s s me n, 2 8% ar e P r of es s io na ls , 10 % a re S tu de nt s an d r es t 14 % a re T ra ve l A g en ts

Inference
F ro m t he a bo ve a na ly s i s , i t c an b e i nf er re d t ha t B us i ne s s me n an d P ro fe s s i on al s s h ow a s tr on ge r t en de nc y to w a rd s pu rc ha s i ng th e U ti li ty V eh ic le s w i th a to ta l o f 7 6% a nd th us m an uf ac tu re rs o f U t il it y V eh ic le s s ho ul d co nc en tr a te on t he s e tw o s eg me nt s t o c ap tu re a h ug e m ar ke t s h ar e.

41

Table 2. Respondents Average Family Income

Income
Le s s t ha n 2 L ak hs 2 - 4 La kh s 4 - 6 La kh s 6 - 8 La kh s

Numbers
9 16 23 31

Percentage
7. 50 1 3. 33 1 9. 17 2 5. 83

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M or e t ha n 8 L ak hs T o ta l

41 1 20

3 4. 17 10 0. 00

More than 8 Lakhs 34.17%

Less than 2 Lakhs 7.5%

2 - 4 Lakhs 13.33%

6 - 8 Lakhs 25.83%

4 - 6 Lakhs 19.17%

Analysis
F ro m t he a bo ve t ab le , it i s o bs e rv ed t ha t 7 .5 % o f U ti li ty V eh ic le ow n er s l ie in t he i nc om e gr ou p o f l es s th an Rs 2 La kh s , 13 .5 % l ie in t he i nc om e g ro up of R s 2 - 4 L ak hs , 19 % l ie i n th e in co me g ro up of Rs 4 - 6 La kh s , 26 % l ie in t he i nc om e g ro up of Rs 6 - 8 La kh s an d r es t 34 % l ie in th e i nc om e g ro up of mo re t ha n R s 8 L ak hs

Inference
F ro m t he a bo ve a na ly s i s , i t c an b e i nf er re d t ha t p eo pl e w h o l ie in th e in co me

43

g ro up o f mo re th an Rs 8 L ak hs a re hi gh ly p ot en ti al cu s t om er s , fo ll ow ed th e i nc om e gr ou p of R s 6 - 8 La kh s .

Table 3. Respondents Age Group

Age Group
20 -3 0 31 -4 0 41 -5 0

Numbers
15 54 39

Percentage
1 2. 50 4 5. 00 3 2. 50

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M or e t ha n 5 0 T o ta l

12 1 20

1 0. 00 10 0. 00

More than 50 10%

20 - 30 12.50%

41 - 50 32.50%

31 - 40 45%

Analysis
F ro m t he a bo ve t ab le , it i s o bs e rv ed t ha t 1 2. 5% of re s p on de nt s w ho pos s es U ti li ty V e hi cl e li e in t he a ge gr ou p of 2 0 - 30 y ea rs , 45 % li e in t he a ge gr ou p of 3 1 - 40 y ea rs , 32 .5 % li e in th e a ge gr ou p of 4 1 - 50 y ea rs , an d r es t 10 % ar e m or e t ha n 5 0 ye ar s o ld .

Inference
F ro m t he a bo ve a na ly s i s , i t c an b e i nf er re d t ha t p eo pl e w h o l ie in th e ag e gr ou p

45

o f 3 1 - 40 ye ar s a re t he po te nt ia l cu s t om er s w h o h av e th e s t ro ng er te nd en cy t ow ar ds pu rc ha s i ng t he U ti li ty V eh ic le s w h ic h co ns ti tu te t o a bo ut 45 % o f t ot al p op ul at io n, w h ic h is fo ll ow ed b y a ge g ro up of 40 - 5 0 y ea rs w h ic h co ns ti tu te t o a bo ut 32 .5 % of t ot al po pu la ti on . A n d it h as b ee n o bs e rv ed th at t he cu s t om er s w h o ar e b us in es s me n an d p ro fe s s i on al s w i th i nc om e o f m or e t ha n Rs 6 La kh s w ho ar e in t he a ge g ro up of 3 0 - 50 ye ar s a re t he po te nt ia l cu s t om er s w h o c an b ri ng hu ge a mo un t o f t ra ns ac ti on t o th e ma nu fa ct ur er . H e nc e ma nu fa ct ur er h as to t ar ge t t hi s s e gm en t w it h t he ri gh t m ar ke ti ng mi x to s te al t he op po rt un it y.

Table 4. Respondents Utility Vehicle

Utility Vehicle

Numbers

Business Professmen -ionals

Students

Travel Agents

46

SUV % (N o s . ) MUV % (N o s . ) 89 31

1 8. 97 (1 1) 8 7. 03 (4 7)

2 1. 21 ( 7) 7 8. 79 (2 6)

91 .6 7 ( 11 ) 8 .3 3

11 .7 6 (2 ) 88 .2 4

(1 ) ( 15 ) F i gu re s in pe rc en ta ge s

SUV

S p or ts U ti li ty V eh ic le , M U V

M ul ti U ti li ty V eh ic le

100 90 80 70 60 50 40 30 20 10 0

Pe rce nta ge

Busine ssm e n

Profe ssiona ls

Stude nts

Tra ve l Age nts

Sports Utility Ve hicle

Multi Utility Ve hicle

Analysis
F ro m t he a bo ve t ab le , it i s o bs e rv ed t ha t a ro un d 31 % o f u ti li ty v eh ic le t ha t c us to me rs ow n a re S p or ts U ti li ty V eh ic le s an d t he re s t 6 9% a re M u lt i U t il it y V eh ic le s .

47

Inference
F ro m th e a bo ve ta bl e a nd a na ly s i s , it c an be o bs e rv ed th at M ul ti U ti li ty V eh ic le s a re m os t s ou gh t t o S po rt s U ti li ty V eh ic le s . A nd th e ma nu fa ct ur er o f M u lt i U t il it y V eh ic le s s ho ul d c on ce nt ra te on b us in es s m en an d tr av el ag en ts w ho a cc ou nt fo r t he h ig he r p er ce nt ag e an d t he m an uf ac tu r er o f S p or ts U t il it y V eh ic le s s ho ul d c on ce nt ra te on s tu de nt s a s th ey ar e t he on e w h o pr ef er s S p or ts U ti li ty V e hi cl es to M ul ti U ti li ty V e hi cl es .

Table 5. Utility Vehicle Respondents Own

Utility Vehicle Numbers Percentage 48

S c or pi o Q ua li s S u mo S a fa ri In no va O t he rs T o ta l

31 26 23 15 12 13 1 20

2 5. 83 2 1. 67 1 9. 17 1 2. 50 1 0. 00 1 0. 83 1 00

Innova 10.83%

Othe rs 10.83%

Scorpio 25.83%

Safari 12.5% Sumo 19.17%

Qualis 21.67%

Analysis
F ro m t he a bo ve t ab le , it i s o bs e rv ed t ha t a ro un d 25 .8 3% of ut il it y ve hi cl e th at R es po nd en ts ow n a re S co rp io , 2 1. 67 % o f t he m h av e Q u al is , 19 .1 7% of th em h av e S um o, 1 2. 50 % of t he m ha ve S a fa ri , 1 0% o f th em h av e I nn ov a a nd t he re s t 1 0. 83 % ha ve O t he r U ti li ty V eh ic le s .

49

Inference
F ro m t he a bo ve t ab le a nd an al ys is , it ca n be obs er ve d th at in U ti li ty V e hi cl es m an y pr ef er t o bu y S co rp io , Q ua li s is no t ma nu fa ct ur ed n ow . A n d n ow S um o a nd S a fa ri co me s t he ne xt op te d. O t he r U ti li ty V eh ic le s li ke Endeavor, Fusion, Vitara and Terracan are not seeked most of the times. Chevrolet Tavera which was introduced recently might get a considerable market share in its segment.

Table 6. Number of Other Vehicles Respondents has.

Businessmen Professionals Students Travel

50

Agents No. of other vehicles(Avg)

3 1 2 5

6 No. of othe r ve hicle s 5 4 3 2 1 0

Businessmen Professiona ls

Students

Tra vel Agents

Inference
F ro m t he d at a, it c an b e s e en th at bus in es s m an a nd t ra ve l a ge nt s ha ve m an y a lt er na t e v eh ic le s al on g w it h t he U t il it y V eh ic le . S o U ti li ty V eh ic le c an no t be a s in gl e v eh ic le th at a U ti li ty V e hi cl e cu s t om er ow ns .

Table 7. Primary Reason for Owning Utility Vehicle

51

Primary Reason
R i di ng Ex pe ri en c e F a mi ly U s e S o ci al S ta tu s Tr av el in g C on ve ni en ce H i ri ng P ur po s e T o ta l

Numbers
16 50 7 32 15 1 20

Percentage
1 3. 33 4 1. 67 5. 83 2 6. 67 1 2. 50 10 0. 00

Hiring Purpose 12.50% Traveling Convenience 26.67% Socal Status 5.83%

Riding Experience 13.33%

Family Use 41.67%

Analysis
F ro m th e a bo ve ta bl e, it is o bs e rv ed th at 1 3. 33 % of p eo pl e bu y ut il it y v eh ic le s f or r id in g e xp er ie nc e , 4 1. 67 % fo r fa mi ly us e, 5. 83 % fo r s oc ia l s ta tu s , 2 6. 67 % f or t ra ve li ng co nv en ie nc e a nd 12 .5 0% f or h ir in g p ur pos e.

52

Inference
F ro m th e a bo ve an al ys is it i s ev id en t th at t he mo s t ap pr op ri at e r ea s o n fo r b uy in g a U ti li ty V eh ic le is fo r f am il y us e co ns id er in g i t as fa mi ly c ar , bu t a f ew t ry it fo r th e t ra ve li ng co nv en ie nc e a nd th e r es t us e it g ot h ir in g pu rp os e . P eo pl e h ir in g U ti li ty V e hi cl e fo r s o ci al s ta tu s is v er y t hi n.

Table 8. Single most Factor Considered while

53

Purchasing

Primary Reason
B r an d Te ch ni ca l S p ec if ic a ti on M a ch o Lo ok D ri vi ng P le as ur e C o mf or t & V e rs a ti li t y T o ta l

Numbers
22 28 9 23 38 1 20

Percentage
1 8. 33 2 3. 33 7. 50 1 9. 17 3 1. 67 10 0. 00

Com fort & Verstility 31.67%

Brand 18.33% Tech. Specification 23.33% Macho Look 7.5%

Driving Pleasure 19.17%

Analysis
F ro m th e a bo ve ta bl e, it is o bs e rv ed th at 1 8. 33 % of c us to me rs co ns id er br an d a s

54

a v er y i mp or ta nt f ac to r w h il e c ho os in g U t il it y V eh ic le , 2 3. 33 % t hi nk Te ch ni ca l s p ec if ic a t io n a s im po rt an t f ac to r, 7 .5 % as M a ch o l oo k, 19 .1 7% as D ri vi ng P le as ur e a nd res t 3 1. 67 % as C om fo rt an d v er s a ti li ty .

Inference
F ro m t he a bo ve a na ly s i s it is ev id en t t ha t t he m os t pe rs pe ct iv e c us to me rs l oo k t o co mf or t a nd ve rs at il i ty a lo ng w it h te ch ni ca l s p ec if ic a t io n as a d ec id in g f ac to r w h il e pu rc ha s i ng U t il it y V eh ic le . S o m an uf ac tu re rs s ho ul d co nc en tr a te on t he s e t w o f ac to rs to pus h th e v eh ic le in to th e ma rk et .

Table 9.
55

Evaluation of Information Sources

1 L ea s t I mp or ta nc e, 2 Im po rt an t, 3 V e ry i mp or ta nt

Information Sources
Television Ad Newspaper Ad Auto Magazines Friends/ Relatives Other Owners Response Test Drive

Total Score

Likert Score

183 223 271 309 314 136

1. 53 1. 86 2. 26 2. 58 2. 62 1. 13

3.00 2.50 2.00 1.50 1.00 0.50 0.00

2.26 1.53 1.86

2.58

2.62

Likert Score

1.13

Television Ad Newspaper Ad

Magazines

Friends/ Relatives

Other Owners Test Drive Response

Likert Score = Total Score / Total Sample

Analysis

56

F ro m th e a bo ve ta bl e, it is o bs e rv ed th at c us to me rs ev al ua t e t he in fo rm at io n s o ur ce s in ma ny w ay s . Th ey w er e a s k ed t o r at e t he i nf or ma ti on s ou rc es be tw ee n 1 a nd 3, w h er e 1 i s le as t im po rt an t a nd 3 i s ve ry im po rt an t. Ba s e d on t ho s e ra te L ik er t S co re w as ca lc ul a t ed w hi ch gi ve s t he im po rt an ce of e ac h s ou rc e. M o re t he s c or e m or e i mp or ta nt is t he s ou rc e.

Inference
F ro m th e a bo ve ta bl e a nd a na ly s i s i t is e vi de nt t ha t th e m os t p ers pe ct iv e c us to me rs th in k t ha t ow ne rs r es po ns e is t he in fo rm at io n s ou rc e a s it is m or e r el ia bl e an d tr us te d w hi le go in g f or a U t il it y V e hi cl e, b ec au s e h e w i ll h av e t he p ra ct ic a l ex pe ri en ce o f t he u ti li t y ve hi cl e as h e ow n s i t, a nd he k now s t he i n a nd o ut o f i t. T he n co me s th e fr ie nd s / re la ti ve s a nd m ag az in es , be ca us e fr ie nd s t el l t he ir pe rc ep ti on w h ic h th ey w ou ld ha ve g ot f ro m th ei r f ri en ds vi ew . A ut o m ag az in es al s o p la y a n i mp or ta nt in fo rm at io n s ou rc e as t he y co mp ar e ma ny v eh ic le s i n a s eg me nt an d th en c om e to a c on cl us io n by co ns id er in g m an y of th e p ar am et er s . T el ev is io n ad an d ne w s p ap er a d d oe s n ot p la y an i mp or ta nt r ol e as i nf or ma ti on s o ur ce .

57

Table 10. Factors that influence your purchase decision on scale of 1 - 10.
1 Least Important, 10 Very Importance

Information Sources Brand Technical Specification Performance Exterior Features Interior Features Comfort and Convenience Maintenance/ Reliability Price Fuel Economy Customer Care

Total Score 630 824 908 752 780 986 853 894 953 765

Likert Score 5.25 6.87 7.57 6.27 6.50 8.22 7.11 7.45 7.94 6.38

58

9.00 8.00 7.00 6.00 Likert Score 5.00 4.00 3.00 2.00 1.00 0.00
Brand Technical Performance Specification Exterior Features Interior Features

8.22 7.57 6.87 6.27 5.25 6.50 7.11 7.45

7.94 6.38

Comfort and Maintenance/ Convenience Reliability

Price

Fuel Economy

Customer Care

Analysis
F ro m t he a bo ve t ab le , it i s o bs e rv ed t ha t c us to me rs e va lu at e t he U ti li ty V e hi cl es i n ma ny w ays . T he y w e re as ke d to r at e th e fa ct or s of pu rc ha s e b et w e en 1 a nd 1 0, w he re 1 is le as t i mp or ta nt a nd 1 0 i s v er y i mp or ta nt . Ba s e d on th os e r at e L ik er t S co re w as ca lc ul a t ed , w h ic h g iv es th e i mp or ta nc e o f ea ch f ac to r. M o re t he s c or e m or e i mp or ta nt is t he fa ct or .

Inference
F ro m th e a bo ve ta bl e a nd a na ly s i s i t is e vi de nt t ha t th e m os t p ers pe ct iv e c us to me rs ev al ua te th e U t il it y V e hi cl e co ns id er in g co mf or t an d co nv en ie nc e . T hi s is fo ll ow ed by p er fo rm an ce , pr ic e, f ue l ec on om y a nd t ec hn ic a l

s p ec if ic a t io n. C ons id er in g t hi s , t he m an uf ac tu re rs o f U ti li ty V e hi cl es s ho ul d de s i gn an d m an uf ac tu re th ei r pr od uc ts in w hi ch fo re mo s t im po rt an c e i s gi ve n t o co mf or t

59

a nd co nv en ie nc e. H en ce th es e f ac to rs pl ay a f ac to r o f di ff er en ti a t io n b et w e en t he ve hi cl es o f th e s eg me nt , w hi ch w i ll g ui de th e c us to me rs in ev al ua ti ng th e U ti li ty V e hi cl e.

Table 11. Recommending Others

Recommendation
O bv io us ly Y es P r ef er ab ly D e fi ni te ly N ot T o ta l

Numbers
29 74 17 1 20

Percentage
2 4. 17 6 1. 67 1 4. 17 10 0. 00

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Definitely Not 14.17%

Obviously Yes 24.17%

Preferably 61.67%

Inference
F ro m th e a bo ve da ta i t c an be s e en t ha t ma ny of t he cu s t om er s a re s a ti s f ie d w i th t he U t il it y V eh ic le t he y o w n a nd t he y p re fe ra bl y re co mm en d o th er s t o go f or t he v eh ic le he o w ns .

Table 12. Evaluation with New Introduced Utility Vehicle

Pricing

Businessmen Professionals

Students

Travel Agents

Y es No

20 .6 9 79 .3 1

6 0. 61 3 9. 39

9 1. 67 8. 33

2 9. 41 7 0. 59

F i gu re s in pe rc en ta ge s

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100 90 80 70 60 50 40 30 20 10 0 Businessm en Professionals Yes Students No Travel Ag ents

Inference
F ro m th e d at a it ca n b e s ee n th at p ro fe s s i on al s a nd s t ud en ts k ee p t ra ck o f ne w l y i nt ro du ce d U t il it y V eh ic le s an d th ey ev al ua t e t he ir ve hi cl e w it h t he ne w l y i nt ro du ce d ve hi cl e.

Table 13. Utility Vehicle Pricing

Pricing Businessmen Professionals Students Travel Agents
H i gh ly P r ic ed R e as on ab ly P r ic ed F i gu re s in pe rc en ta ge s 81 .0 3 6 0. 61 6 6. 67 2 9. 41 18 .9 7 3 9. 39 3 3. 33 7 0. 59

Percentag e

62

90 80 70 60 50 40 30 20 10 0 Businessm en Professionals Hig hly Priced Students Travel Ag ents

Percentag es

Reasonably Priced

Inference
F ro m th e a bo ve da ta i t i s ev id en t t ha t, t ra ve l ag en ts ar e t he pe op le w h o fe el U ti li ty V e hi cl e ar e h ig hl y p ri ce d, w it h a f ew p eo pl e fr om P ro fe s s i on al s a nd s tu de nt s e gm en t.

Table 14. Preference to Include/Change any feature

Include/Change
Air Conditioning Music system Interiors

Numbers
16 45 33

Percentage
17 48 35

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Interiors 35%

Air Conditioning 17%

Music System 48%

Inference
F ro m t he a bo ve d at a, it c an b e th at th e cu s t om er s w ho ne ed a c ha ng e in t he ir e xi s t in g f ea tu re s pr ef er t o ch an ge mu s i c s ys t em w i th a s ys te m o f h ug e o pt io ns a nd g oo d q ua li ty . A n d s om e pr ef er a ir c on di ti on in g an d in te ri or s t o b e ch an ge d a nd a ve ry few w it h t yr es .

Table 15. Rank the following utility vehicle brands.

H 0 : There is no significant difference between the rankings of different brands . H1 : There is significant difference between the rankings of different brands . Brand
Scorpio Endeavor

Mean Rank
2. 35 6. 46

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Fusion Pajero Safari Tavera Vitara Terracan Innova CR-V

7. 84 5. 59 3. 47 5. 24 9. 56 6. 12 3. 76 4. 61

Test statistics
N C h i S q ua re D e gr ee s of f re ed om S i gn if ic an c e 1 20 2 23 .4 29 9 0. 03

Inference
T o kn ow w h ic h u ti li ty v eh ic le r an ks fi rs t i n th e cu s t om er s pe rc ep ti on , F ri ed ma n t es t w as us ed . T hi s te s t h el ps t o k no w w h et he r t he re i s a ny s ig ni fi ca nt d if fe re nc e b et w e en th e r an ki ng s o f di ff er en t ve hi cl es . Th e me an ra nk w as c al cu la t e d b as e d o n th e r an k a ll ot te d b y di ff er en t c us t om er s . A cc or di ng to ab ov e d at a, S c or pi o w as ra nk ed in th e t op fo ll ow ed by S af ar i, I nn ov a, CR -V an d ot he r ut il it y v eh ic le s . A f te r th e t es t w as co nd uc te d, t he s i gn if ic an c e w as 0. 03 , w hi ch s h ow s th at i t is v er y mu ch s ig ni fi ca nt a s t he t es t va lu e i s l es s th an 0. 05 . T he re fo re , t he n ul l h yp ot he s i s i s re je ct ed an d al te rn a t iv e h yp ot he s i s i s ac ce pt ed . T he re fo re i t i s

65

c on cl ud ed t he re i s s i gn if ic an t d if fe re nc e b et w e en th e r an ki ng s o f di ff er en t b ra nd s .

FINDINGS
Businessmen and Professionals show a stronger tendency towards purchasing the Utility Vehicles. Population who lie in the income group of more than Rs 8 Lakhs are highly potential customers. Populations who lie in the age group of 31 - 40 years are the potential customers who have the stronger tendency towards

66

purchasing the Utility Vehicles which constitute for the greater percentage of total population. Customers who are businessmen and professionals with income of more than Rs 6 Lakhs who are in the age group of 30 - 50 years are the potential customers who can bring huge amount of transaction to the manufacturer. It can be observed that Multi Utility Vehicles are most sought to Sports Utility Vehicles. It can be observed that in Utility Vehicles many prefer to buy Scorpio. Sumo and Safari comes the next opted. Businessmen and travel agents have many alternate vehicles along with the Utility Vehicle. The most appropriate reason for buying a Utility Vehicle is for family use considering it as family car, but a few try it for the traveling convenience and the rest use it got hiring purpose. The most perspective customers look to comfort and versatility along with technical specification as a deciding factor while purchasing Utility Vehicle. Most perspective customers think that owners response is the source as it is more reliable and trusted while going for a Utility Vehicle, because he will have the practical experience of the utility vehicle as he owns it, and he knows the in and out of it. 67

Many of the customers are satisfied with the Utility Vehicle they own and they preferably recommend others to go for the vehicle he owns.

Professionals and students keep track of newly introduced Utility Vehicles and they evaluate their vehicle with the newly

introduced vehicle. Travel agents are the people who feel Utility Vehicle are highly priced, with a few people from Professionals and student segment. The customers who need a change in their existing features prefer to change music system with a system of huge options and good quality. And some prefer air conditioning and interiors to be changed and a very few with tyres. Scorpio was ranked in the top followed by Safari, Innova, CR-V and other utility vehicles. And there is significant difference between the rankings of different brands .

RECOMMENDATIONS
M an uf ac tu re rs of U ti li ty V eh ic le s a re s u gg es te d to c on ce nt ra te on

Businessmen and Professionals s e gm en ts to ca pt ur e a hu ge ma rk et

s h ar e

68

M an uf ac tu re r ar e s u gg es te d

to ta rg et t he s e gm en t w i th in co me o f mo re

t ha n R s 6 La kh s an d w h o ar e i n t he ag e g ro up o f 30 - 5 0 ye ar s , w it h t he r ig ht ma rk et in g m ix t o s t ea l th e o pp or tu ni ty . A s m os t ap pr op ri at e r ea s o n f or b uy in g a U ti li ty V eh ic le is f am il y u s e ( co ns id er in g i t as fa mi ly ca r) , th e m an uf ac tu re rs ar e s u gg es t ed to co ns id er f am il y c om fo rt w h il e des ig ni ng t he U t il it y V e hi cl e. M an uf ac tu re rs a re s ug ge s t ed t o c on ce nt ra t e on co mf or t a nd v ers at il i ty a lo ng w i th te ch ni ca l s pe ci fi c at i on to ge t h ig h s a le s i n th e ma rk et . M an uf ac tu re rs ar e s ug ge s t ed to c on ce nt ra t e o n ex is ti ng c us to me rs by f ul fi ll in g th ei r n ee ds i n a b et te r m an ne r, s o t ha t i t gi ve s w a y f or th e p ub li ci ty , be ca us e p ros pe ct iv e cu s t om er s th in k th at ow n er s re s p ons e is t he i nf or ma ti on s ou rc e as it i s m or e re li ab l e an d t ru s t ed w hi le g oi ng f or a U ti li ty V e hi cl e. M an uf ac tu re rs h as to s ee th at co mf or t, co nv en ie nc e, p ri ce , f ue l ec on om y a nd t ec hn ic a l s pe ci fi ca t i on i n t he ir U t il it y V e hi cl e a s t he y pl ay a m aj or r ol e as f ac to rs of d if fe re nt i at i on be tw ee n t he v eh ic le s of t he s e gm en t, M an y of t he cu s t om er s p er ce iv e U ti li ty v eh ic le s as h ig hl y pr ic ed . S o th e c om pa ni es c an co me o ut w i th t he s t ra te gy w h ic h w i ll re du ce co s t bu t w it ho ut co mp ro mi s i ng on a ny o th er f ac to rs . U ti li ty V eh ic le s pr ef er ab ly ha ve s op hi s t ic at ed a ir c on di ti on er s , m us ic s y s t em s a nd g oo d in te ri or s .

CONCLUSION

69

T he au to mo bi l e i nd us tr y g rew a t a co mp ou nd an nu al g row th ra te ( C A G R ) o f 22 p er ce nt be tw ee n 19 92 a nd 1 99 7. W it h in ve s t me nt ex ce ed in g R s . 5 0, 00 0 c ro re , th e tu rn ov er o f t he au to mo bi le i nd us tr y ex ce ed ed Rs . 5 9, 51 8 c ro re i n 20 02 -0 3. In cl ud in g t ur no ve r of th e au to - co mp on en t s ec to r, t he a ut om ot iv e i nd us tr y s t ur no ve r, w h ic h w a s a bo ve Rs . 8 4, 00 0 c ro re i n 2 00 2- 03 , is e s t im at e d t o ha ve ex ce ed ed Rs . 1, 00 ,0 00 c ro re in 20 03 -0 4

R is in g s al es a nd s t ro ng g row th pr os p ec ts he ig ht en ed th e p op ul ar it y of a ut o s to ck s i n J ul y 20 04 as f or ei gn in s t it ut io na l i nv es to rs (F IIs ) i nc re as ed th ei r s ta ke s in ke y a ut om ob il e c om pa ni es l ik e M a hi nd ra & M ah in dr a, A s h ok L ey la nd , M a ru ti U d yo g, T V S M o to rs a nd H er o H on da .

T he

en tr y

of

mu lt in a t io na l s of th em

ha s ha ve

pu t

i mm en s e in to

p re s s u re j oi nt

on

I nd ia n w it h

c om pa ni es .

S om e

e nt er ed

ve nt ur es

m ul ti na t i on a ls ; a f ew o th er s h av e i nv es te d h ea vi ly on R &D t o be on t he ir ow n, o th er s p er is he d. Th e m ar ke t ha s no w po la ri ze d in to t w o d is ti nc t s eg me nt s , In di an pl ay er s a nd M ul ti na t io na l s . T he M U V s e gm en t i s j us t re vv in g up an d p la ce d j us t as th e pa s s e ng er c ar s eg me nt w as in t he m id - 19 90s . T hi s s e gm en t c ou ld b e t he ne xt f oc us of t he gl ob al p la ye rs ; w i th i nc om es r is in g t he ru ra l m ar ke t ha s be co me a tt ra c ti v e. H yu nd ai is s ai d t o be to yi ng w i th th e i de a of e nt er in g th is s eg me nt an d t he p os s ib il it y of D a im le rC hr ys le r in tr od uc in g a m od el fr om t he M i ts ub is hi s t ab le i n th e n ea r f ut ur e ca nn ot be ru le d o ut . T he en tr y o f gl ob al p la ye rs in to t hi s s e gm en t co ul d a ls o d ev el op th e n as ce nt m ar ke t fo r s po rt s ut il i ty ve hi cl es (S U V s ) w hi ch is a ct ua ll y a pa rt o f t he M U V s e gm en t w o rl dw id e. C on s i de ri ng th ei r hi gh c os ts an d l im i te d u ti li ty , S U V s ha ve no t c au gh t o n in th e c ou nt ry ti ll now .

70

QUESTIONNAIRE
I, Deepak M S doing Masters in Business Administration am doing a study which is a part of the curriculum and this questionnaire is administered to know The Customer Perception towards Utility Vehicles & Factors Influencing the Buying Decisions. I thank you in advance for your time and cooperation in this study. I assure complete confidentiality of all your responses. Name Occupation : : ___________________________ ___________________________

1.

Average family income per annum < 2 lakhs, 2 - 4 lakhs, 4 - 6 lakhs, 6 - 8 lakhs, > 8 lakhs.

2.

Age group 20 - 30, 30 - 40, 40 - 50, > 50

3.

The Utility Vehicle you own Sports Utility Vehicle (SUV), Brand Multi Utility Vehicle (MUV)

_____________________________________

4.

How many 4 wheelers do you have other than utility vehicle? 1, 2, 3, More than 3

5.

How old is your current utility vehicle Below 1 year, 1 - 2 years, 3 years and above

6.

Primary reason for buying utility vehicle Riding Experience, Hiring Purpose, Family use, Traveling Convenience, Social Status, _________(Specify)

7.

The single most factor you considered while purchasing

71

Brand,

Technical Specification, Comfort & Versatility,

Macho Look, __________ (Specify)

Driving Pleasure, 8.

What information sources did you use to while purchasing the utility vehicle? Television Ad Friends/ Relatives, Newspaper Ad Other Owners Response, Magazines Test Drive

9.

Rate the factors that influence your purchase decision on scale of 1 - 10. 1 Least Important 10 1 B ra n d T e c h n i ca l S p e ci fi ca ti o n P e r fo rma n ce E xt e r i o r Fe a t u re s I n t e r i o r Fe a tu re s C o mf o r t a n d C o n ve n i e n c e Maintenance/ Reliability P ri c e F u e l Eco n o m y C u st o m e r C a re Very Importance 2 3 4 5 6 7 8 9 10

10.

Do you recommend the brand you own to others? Obviously Yes, Preferably, Definitely Not

11. Will you keep evaluating your utility vehicle with the newly introduced? Yes, No

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12. Are utility vehicles reasonably priced? Yes, No

13. Do you prefer to include/change any feature in your vehicle, (Only One) Yes, If yes, Air Conditioning, No Sun Roof, Music system, Tyres Interiors, ________ __ (Specify)

If change, Reason_______________________________________________ ______________________________________________________________ 14. Rank the following utility vehicle brands Scorpio Endeavor Fusion Pajero Safari Tavera Vitara Terracan Innova CR-V 15. ____ ____ ____ ____ ____ ____ ____ ____ ____ ____

Are you planning for a new utility vehicle / Car? Yes, No

If Yes, Give reason ____________________________________________

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____________________________________________________________ Brand you are planning for ____________________________________

Why? _______________________________________________________ ____________________________________________________________

BIBLIOGRAPHY
1. Marketing Management PHILLIP KOTLER 2. Business Research Methods COOPER SCHINDLER 3. Business Economics SAMUELSON P. and W. D. NORDHAUS 4. Strategic Management ARTHUR A. THOMSON and A. J. STICKLAND 5. Consumer Behaviour SCIFFMAN L. G. and KANUK L. L. R. DONALD and PAMELA S..

WEBSITES
Ibef.org
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bambooweb.com domain-b.com indiacar.com researchandmarkets.com ssi.nic.in

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