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Dissertation Scope of Luxury Car Brand in India
Dissertation Scope of Luxury Car Brand in India
Bajaj Institute of
Technology and Management
Gr. Noida
A DESSERTATION PROJECT REPORT
ON
SCOPE OF LUXURY CARS IN INDIA
Submitted to
UP TECHNICAL UNIVERSITY,
LUCKNOW
FOR THE PARTIAL FULFILLMENT OF THE
AWARD OF MASTERS IN BUSINESS
ADMINISTRATION DEGREE
Under the guidance of
Submitted by
DEEPAK SINGH
MBA-IV Sem.
ROLL NO. 0919270016
ACKNOWLEDGEMENT
Some works are so typical that are impossible for a person to complete it alone. Dissertation
Project is one of them. I would not be able to complete my work without the help of my
respected, Faculty Guide, my college and workplace colleagues. So it is my obligation to
thank all of them.
I have had the honour of having been associated & working under the able & stimulating
guidance of Mr. ABHISHEK SAXENA (Ass. Pro.) MBA DEPARTMENT, G. L.
BAJAJ INSTITUTE OF TECHNOLOGY AND MANAGEMENT, Gr. NOIDA. The
Project work was undertaken under his keen supervision and the Project has been prepared by
me. I express sincere feeling of gratitude and respect for him inspiring help throughout the
work. Without his esteemed and valuable help and guidance it would not have been possible
for me to accomplish my project. I am gratefully indebted to him.
Executive Summary
The luxury car market in India has registered a fair amount of growth in the last few years
and is growing at the rate of 25% per year. A luxury car is a luxuriously styled automobile
which is designed to give satisfaction and comfort to its owner.
A luxury car typically has carrying capacity of 6 passengers. The luxury cars in the Indian
market are very expensive, with price tags that start from Rs. 20 lakh. Hence, luxury cars
can only be afforded by the people who belong to the high income group and there are a lot
of
such
takers
in
the
Indian
automobile
market.
The various reasons for the growth of the luxury car market in India are:
The economy is rising in the country which has given the people more disposable
income which they are spending in buying luxury cars.
Various loan schemes have been launched by the automobile manufacturers and the
financial institutions. This has made it very easy for the people to buy luxury cars and
this has boosted the luxury car market in India.
With the IT boom in the country many youngsters are earning high pay packages
which enable them to buy luxury cars. And this have further given boost to the market
of luxury car in India.
The government have formulated many polices such as the relaxation of equity
regulations and the reduction of import tariffs pertaining to the automobile industry.
These have helped to reduce the prices of the luxury cars, which in turn have led to
the growth of the luxury car market in India
The various automobile companies manufacturing luxury cars for India are:
BMW manufacturers the BMW 530i and BMW 760li models
Rolls Royce manufactures the Rolls Royce Phantom V 12 model
Porsche manufactures the 911 Carrera, 911 Carrera S, and Cayman S models
Daimler Chrysler manufactures the Mercedes Benz C and E class models
Bentley manufactures the Bentley Range and Bentley Continental models
Luxury car market in India have grown over the last few years. That it continues to grow
more efforts must be made by the Indian automobile industry and the government of India.
And only then the luxury car market in India will be able to reach its heights
India set its foot in the global automotive industry in 1898, with the first car rolled out in the
streets of Mumbai. Since then, India has come a long way. Taking into Scrutiny the current
statistics, automotive industry is now, the most dynamic sectors in India. The car market of
India boasts of attractive finance schemes, increasing purchasing power and a vast variety of
Luxury car range.
India being one of the lucrative hubs for the car market is attracting auto majors from all over
the world. The count of people ready to buy these high sticker cars is gaining momentum. In
effect to this, almost all the overseas manufacturers including Mercedes, BMW, Audi,
Suzuki, and most recently Volkswagen have entered the fray. Ferraris announcement to roar
into the India market from 2010 and Aston Martins aspirations to enter the Indian market
soon next year also signals that the market has just picked up pace and there are great
possibilities for these indulgent vehicles to thrill the Indians.
With Tatas recent acquisition of Fords Land Rover and Jaguar brands, The Indian
companies are in the right gear to compete with other global luxury brands making a rush in
the country. Recent analysis show that India is now among the principal driving markets for
the Asian automotive industry. The reasons for these unprecedented changes being in favour
of India are quite a few.
The growing population of well heeled citizens in India emerges to be the primary cause.
With the overall population being 1 billion, the 1% people who constitute the affluent society
or the new Global Indians are estimated to be over 10 million, mainly because of the
growing disposable income of India.
Secondly, Change in attitude of the customer accounts for the sudden acceleration in the
Luxury car Market in India, as the emphasis has been shifted from price consideration and
affordability to design, quality and pleasure. The Indians who believed in traditional savings
now
follow
an
extravagant
approach.
Stepping down to the third possible reason, exposure and passion for speed, power and
elegance run on to take their seats. With more and more Car rallies, exhibition, televising of
Formula 1 and international motor shows happening in the country, these luxurious coups
have created an urge in drivers to experience comfort and control at the very same time.
Also, lower interest rates and good conditioned roads are some of the steps taken by the
Indian government which fuelled the demand for ultra-luxury cars in Indian market. Now,
penetrating into the future, we can adamantly say that, with the real GDP growth of India
(8.8% in 2006) being outstanding, there are definite prospects of increasing count of Luxury
car buyers. Growth in the luxury segment has been helped by an economy expanding at
nearly 9 percent on average in the last four years, and the entry of new players and launches
from
the
likes
of
BMW,
Mercedes-Benz,
Porsche
and
Audi.
Audi, a German manufacturer of first-rate luxury cars and one of the worlds leading
premium brands established Audi India under Volkswagen Group Sales India Pvt. Ltd. in
Mumbai in March 2007 and is all set to stay put in the country for an enduring tenure through
their valuable investments in brand management, marketing and customer services.
4
Mercedes-Benz India has had a long standing tie up in India in the luxury car segment with
its inception way back in 1995. Being the only luxury car maker in India to have such a wide
range of cars, (S-class, E-class, M-class, CL-class and many more), it also provides an
authentic choice for the customers with each model in petrol and diesel variants.
BMW, another worlds leading brand in the premium car segment, set its foot in India, just
few years back. As its global record says, BMW in India, strives to achieve the same goal by
presenting customers with Quality in conjunction with luxurious driving comfort.
Rolls-Royce, favored by Indian royalty during the imperial British rule returned in 2005 after
a gap of 50 years with the Phantom super luxury sedan.
Fords Volvo launched of two of its most successful models, the S80 sedan and the XC90
SUV in both petrol and diesel variants, each promising to offer luxury with comfort.
Consequently, the picture seems to be apparently flaunting that the Global Indians are all
ready to take the Luxury Car market to an all-new high and it has been well said For a
luxury car to remain one, its features have to stay ahead of the innovative curve.
TABLE OF CONTENTS
Page no.
1.
INTRODUCTION
7 -22
a)
7-11
b)
12
c)
13-14
d)
Production statistics
15
e)
Exports
16-17
f)
History of brands
18-19
g)
20
2.
REVIEW OF LITERATUE
23-77
a)
Brand personality
23
b)
26-27
c)
29
d)
30-32
e)
Luxury vehicles
33
f)
34--37
g)
3.
39-77
78
4.
78
5.
RESEARCH METHODOLOGY
79
6.
RESEARCH FINDINGS
80-102
7.
CONCLUSION
103
QUESTIONNARE
104-106
8.
BIBLIOGRAPHY
9.
107
INTRODUCTION
General Motors, Ford and Chrysler are often referred to as the "Big Three" or, more recently
the "Detroit Three", being the largest automakers in the United States and Canada. They were
for a while the largest in the world and two of them are still a mainstay in the top five. Ford
has held the position of second-ranked automaker for the past 56 years, being relegated to
third in North American sales, after being overtaken by Toyota in 2007. That year, Toyota
produced more vehicles than GM, though GM still outsold Toyota that year, giving GM 77
consecutive calendar years of top sales. For the first quarter of 2008, however, Toyota
overtook GM in sales as well. In the North American market, the Detroit automakers retained
the top three spots, though their market share is dwindling. Honda passed Chrysler for the
fourth spot in 2008 US sales. Since then, because of Toyota's woes with their recent
unintended acceleration recall, Toyota has fallen back to fourth place in sales, with Honda
trailing in fifth place, allowing the Detroit Three reclaim their Big Three title.
7
The Big Three are also distinguished not just by their size and geography, but also by their
business model. The majority of their operations are unionized (United Auto Workers and
Canadian Auto Workers), resulting in higher labor costs than other multinational automakers,
including those with plants in North America. The 2005 Harbour Report estimated that
Toyota's lead in labour productivity amounted to a cost advantage of $350 US to $500 US per
vehicle over American manufacturers. The UAW agreed to a two-tier wage in recent 2007
negotiations, something which the CAW has so far refused. Delphi, which was spun off from
GM in 1999, filed for Chapter 11 bankruptcy after the UAW refused to cut their wages and
GM is expected to be liable for a $7 billion shortfall.
In order to improve profits, the Detroit automakers made deals with unions to reduce wages
while making pension and health care commitments. GM, for instance, at one time picked up
the entire cost of funding health insurance premiums of its employees, their survivors and
GM retirees, as the US did not have a universal health care system. With most of these plans
chronically underfunded in the late 1990s, the companies have tried to provide retirement
packages to older workers, and made agreements with the UAW to transfer pension
obligations to an independent trust. In 2009, the CBC reported that the non-unionized
Japanese automakers, with their younger American workforces and fewer retirees will
continue to enjoy a cost advantage over the Big Three.
Despite the history of their marques, many long running cars have been discontinued or
relegated to fleet sales as the Big Three shifted away resources from midsize and compact
cars to lead the "SUV Craze". Since the late 1990s, over half of their profits have come from
light trucks and SUVs, while they often could not break even on compact cars unless the
buyer chose options. Ron Harbour, in releasing the Oliver Wymans 2008 Harbour Report,
stated that many small econoboxes of the past acted as loss leaders, but were designed to
bring customers to the brand in the hopes they would stay loyal and move up to more
profitable models. The report estimated that an automaker needed to sell ten small cars to
make the same profit as one big vehicle, and that they had to produce small and mid-size cars
profitably to succeed, something that the Detroit three had trouble doing.
SUV sales peaked in 1999 but have not returned to that level ever since, due to high gas
prices. The Big Three have suffered from perceived inferior initial quality and reliability
compared to their Japanese counterparts, which has been difficult to overcome. They have
also been slow to bring new vehicles to the market, while the Japanese are also considered
the leader at producing smaller, fuel-efficient cars.
Falling sales and market share have resulted in the Big Three's plants operating below
capacity (GM's plants were at 85% in November 2005, well below the plants of its Asian
competitors), leading to production cuts, plant closures and layoffs. They have been relying
heavily on considerable incentives and subsidized leases to sell vehicles. which was crucial to
keeping the plants running, which in turn drove a significant portion of the Michigan
economy. These promotional strategies, including rebates, employee pricing and 0%
financing, have boosted sales but have also cut into profits. More importantly such
promotions drain the automaker's cash reserves in the near term while in the long run the
company suffers the stigma of selling vehicles because of low price instead of technical
merit. Automakers have since been trying to scale back on incentives and raise prices, while
cutting production. The subprime mortgage crisis and high oil prices in 2008 resulting in the
8
Japan
Japanese automakers Toyota, Honda, and Nissan, among many others, have long
been considered the leaders at producing smaller, fuel-efficient cars. Their vehicles
were brought to the forefront, due to the 1973 oil crisis which had a major impact on
the auto industry. For instance, the Honda Civic was considered superior to
American competitors such as the Chevrolet Vega and Ford Pinto. The Civic is the
best-selling car in Canada for 12 straight years in a row.,
As well, the Nissan 240Z was introduced at a relatively low price compared to other
foreign sports cars of the time (Jaguar, BMW, Porsche, etc.), while providing
performance, reliability, and good looks. This broadened the image of Japanese carmakers beyond their econobox successes, as well as being credited as a catalyst for
the import performance parts industry.
Before Honda unveiled Acura in 1986, Japanese automobiles exports were primarily
economical in design and largely targeted at low-cost consumers. The Japanese big
three created their luxury marques to challenge the established brands. Following
Honda's lead, Toyota launched the Lexus name with the LS 400 which debuted at
$38,000 in the U.S., in some markets being priced against mid-sized six cylinder
Mercedes-Benz and BMW models), and was rated by Car and Driver magazine as
better than both the $63,000 Mercedes-Benz 420 SEL and the $55,000 BMW 735i in
terms of ride, handling and performance. It was generally regarded as a major shock
to the European marques; BMW and Mercedes-Benz's U.S. sales figures dropped
29% and 19%, respectively, with the then-BMW chairman Eberhard von Kuenheim
accusing Lexus of dumping in that market. Nissan's Infiniti became a player on the
luxury market mostly thanks to its popular Q45. The vehicle included a class-leading
(at the time) 278 hp (207 kW) V8 engine, four wheel steering, the first active
9
Toyota has always been by far Japan's largest automaker, and it recently overtook
perennial world leader GM in both production and sales by early 2008. As the most
aggressive of Japan's companies when it came to expanding into light trucks and
luxury vehicles, this proved largely successful. Their high-end brand Lexus became
the top-selling luxury marque worldwide in 2000, despite being only started up in
1989. Consequently, Toyota's stock price has traded at a much higher premium than
other automakers. Nissan was formerly in second place, until financial difficulties in
the late 1990s caused it to lose its place to Honda. Honda is Japans second largest
automaker and ranks sixth in the world, behind Toyota, GM, Volkswagen, Ford, and
Hyundai. Mitsubishi and Mazda are in a distant fourth and fifth place compared to the
Japanese Big Three.
10
Toyota, Honda, and Nissan are all in the BusinessWeek magazine's The 100 Top
Global Brands by dollar value, as ranked by leading brand consultancy Interbrand.
The Toyota marque was valued at US$22.67 billion, ranking it ninth among all global
brand names - automotive or non-automotive, edging out that of Mercedes-Benz.
Germany
The automobile industry in Germany is one of the largest employers in the country, with a
strong labour force of over 866,000 (2005) working in the industry. In addition, Germany has
the largest share of passenger car production in Europe with over 29% market share (source:
OICA, 2002), followed by France (18%), Spain (13%) and the United Kingdom (9%). In
2009, Angela Merkel pointed out that losing the lead in electric vehicle technology means
Germany also will lose markets.
The German trio Mercedes-Benz, BMW and Audi are often referred to as "Germany's Big
Three", although the actual major automobile manufacturers are Daimler AG (producer of
Mercedes-Benz) and the Volkswagen Group (producer of Audi), along with BMW.
Volkswagen Group has long been the largest automaker in Europe. As of 2007 it edged out
Ford to rank third in the world after General Motors and Toyota. It is also the parent group of
Audi, Porsche, SEAT, koda, Bugatti, Lamborghini and Bentley.
Daimler AG holds major stakes in other automakers including Mitsubishi Fuso.
BMW also produces MINI branded vehicles, and has been the parent company of RollsRoyce Motor Cars since 1998.
BMW, Mercedes-Benz and Audi make up about 86% of the luxury midsize market.
11
Nano plant, Halol with General Motors in Gujarat, Aurangabad with Audi in Maharashtra
and Kolkattawith Hindustan Motors in West Bengal are some of the other automotive
manufacturing regions around the country.
HISTORY
SecondTierSuppliers: These companies design vehicle systems or bodies for First Tier
Suppliers and OEMs. They work on designs provided by the first tier suppliers or OEMs.
They also provide engineering resources for detailed designs. Some of their services may
include welding, fabrication, shearing, bending etc.
around the world. They design and innovate in order to provide black-box solutions for the
requirements of their customers. Black-box solutions are solutions created by suppliers using
their own technology to meet the performance and interface requirements set by assemblers.
First tier suppliers are responsible not only for the assembly of parts into complete units like
dashboard, breaks-axel-suspension, seats, or cockpit but also for the management of secondtier suppliers.
Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs): After
researching consumers wants and needs, automakers begin designing models which are
tailored to consumers demands. The design process normally takes five years. These
companies have manufacturing units where engines are manufactured and parts supplied by
first tier suppliers and second tier suppliers are assembled. Automakers are the key to the
supply chain of the automotive industry. Examples of these companies are Tata Motors,
Maruti Suzuki, Toyota, and Honda. Innovation, design capability and branding are the main
focus of these companies.
Dealers: Once the vehicles are ready they are shipped to the regional branch and from there,
to the authorised dealers of the companies. The dealers then sell the vehicles to the end
customers.
Parts and Accessory: These companies provide products like tires, windshields, and air bags
etc. to automakers and dealers or directly to customers.
Service Providers: Some of the services to the customers include servicing of vehicles,
repairing parts, or financing of vehicles. Many dealers provide these services but, customers
can also choose to go to independent service providers.
14
PRODUCTION STATISTIC
The production of automobiles has greatly increased in the last decade. It passed the 1 million
mark during 2003-2004 and has more than doubled since.
15
Commercial
% Change
Total Vehicles
Prodn.
% Change
2009
2,166,238
17.34
466,456
-4.08
2,632,694
11.40
2008
1,846,051
7.74
486,277
-9.99
2,332,328
3.35
2007
1,713,479
16.33
540,250
-1.20
2,253,999
10.39
2006
1,473,000
16.53
546,808
50.74
2,019,808
19.36
2005
1,264,000
7.27
362, 755
9.00
1,628,755
7.22
2004
1,178,354
29.78
332,803
31.25
1,511,157
23.13
2003
907,968
28.98
253,555
32.86
1,161,523
22.96
2002
703,948
7.55
190,848
19.24
894796
8.96
2001
654,557
26.37
160,054
-43.52
814611
1.62
2000
517,957
-2.85
283,403
-0.58
801360
-2.10
1999
533,149
285,044
818193
16
EXPORTS
India's automobile exports have grown consistently and reached $4.5 billion in 2009,
with United Kingdom being India's largest export market followed by Italy,
Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12
billion by 2014.
According to New York Times, India's strong engineering base and expertise in the
manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing
facilities
of
several
automobile
companies
like Hyundai
U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models
in the U.S. market. Bajaj Auto is designing a low-cost car for theRenault Nissan Automotive
India, which will market the product worldwide. Renault Nissan may also join domestic
commercial vehicle manufacturer Ashok Leyland in another small car project. While the
possibilities are impressive, there are challenges that could thwart future growth of the Indian
automobile industry. Since the demand for automobiles in recent years is directly linked to
overall economic expansion and rising personal incomes, industry growth will slow if the
economy weakens.
Snippets
The first automobile in India rolled in 1897 in Bombay.
India is being recognized as potential emerging auto market.
Foreign players are adding to their investments in Indian auto industry.
Within two-wheelers, motorcycles contribute 80% of the segment size.
Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%).
Tata Motors dominates over 60% of the Indian commercial vehicle market.
2/3rd of auto component production is consumed directly by OEMs.
India is the largest three-wheeler market in the world.
India is the largest two-wheeler manufacturer in the world.
India is the second largest tractor manufacturer in the world.
India is the fifth largest commercial vehicle manufacturer in the world.
The number one global motorcycle manufacturer is in India.
India is the fourth largest car market in Asia - recently crossed the 1 million mark.
18
History of Brands
The Mercedes-Benz logo is one of the most famous brands in the
wor;d. The Benz logo is a simplistic three-pointed star that represents
its domination of the land, the sea, and the air. The famous threepointed star was designed by Gottlieb Daimler to show the ability of his
motors for land, air and sea-usage. It was first seen on a Daimler in
1909, and was combined with the Benz laurel wreath in 1926 to signify
the union of the two firms. Mercedes-Benz is the world's oldest
automobile manufacturer.
The Audi badge the 'Four Rings' is the emblem of one of the oldest car
manufacturers in Germany. It symbolises the 1932 merger of the four
independent motor-vehicle manufacturers: Audi, DKW, Horch and Wanderer.
Together with the NSU brand, which joined in 1969, these companies are the
roots of the present-day AUDI AG. After the war the Audi name - which is
Latin for "Hear!" - disappeared, but was revived in 1965, using the four rings as
a logo. Also, the name is sort of a pun on 'hoerch', German for 'hear', name of
one of the founders. The company itself is more than a century old. The four
rings in the logo have nothing to do with the Olympic rings.
BMW stands for Bayerische Motoren Werke or Bavarian Motor
Company. The company was established in 1913 and based in Munich,
Germany. It started out as an aero engine manufacturer, hence the
company logo. The logo comprised of four quadrants of alternating
white and blue color. It is a stylized representation of an airplane
propeller spinning against the clear blue sky. The logo represents a
white propeller blade against a blue sky. It reflects the origins of BMW
as a maker of military aircraft engines during WWI. Also, white and
blue are the traditional colors of Bavaria.
All racing fans are very familiar with the famous Ferrari "prancing
horse" symbol. The famous symbol of Ferrari is a black prancing horse
on yellow background, usually with the letters S F for Scuderia Ferrari.
The horse was originally the symbol of Count Francesco Baracca, a
legendary "asso" (ace) of the Italian air force during World War I, who
painted it on the side of his planes. Baracca died very young on June
19, 1918, shot down after 34 victorious duels and many team victories.
19
The Rolls Royce logo consisting of the two Rs or the double R clearly
stands for the Rolls and Royce, the two founders of this car
manufacturing company. There is nothing special about the design of
the logo, but the brand name is so strong, the logo looks special. In
1998, BMW the option on the trademarks, licensing the name and "RR"
logo for 40m.
In 1884 Frederick Henry Royce started an electrical and mechanical
business. He made his first car, a "Royce", in his Manchester factory in
1904. He was introduced to Charles Stewart Rolls in a Manchester
hotel on the May 4 that year, and the pair agreed a deal where Royce
would manufacture cars, to be sold exclusively by Rolls. A clause was
added to the contract, stipulating the cars would be called "RollsRoyce".
20
21
Under Rs. 3
Lakhs
Chevrolet Forester
Ford Mondeo & Ford Endeavour, Ford Focus
Honda Civic, Hyundai i30
Skoda Octavia & Combi
Toyota Corolla, Toyota Corolla Altis, Tata Indicruz
Volkswagen Jetta
Audi A4
Chevrolet Captiva
Chevrolet Cruzes
Honda CR-V, Honda CRV 2008, Honda Civic Hybrid, Honda
Accord, Hyundai Santa Fe
Maruti Suzuki Grand Vitara, Mitsubishi Pajero, Mercedes C Class
Skoda Superb
Opel Vectra
Skoda Laura
Toyota Camry, Ford Endeavour Thunder Plus, Terracan &
Tucson, Toyota Fortuner
Volkswagen Beetle Volkswagen Passat Volkswagen Jetta
Above Rs. 1
Crore
AUDI R8
Bentley Arnage, Bentley Continental GT & Flying Spur, Bentley
Azure
Maybach
Rolls Royce Phantom
23
REVIEW OF LITERATURE
Brand Personality
A brand is a set of expectation and association evoked from a company or product. A brand
is how your key constituents- customers, employees, shareholders etc. experience what you
do. Some brands are of such great importance to people, that we speak of them as a part of
ones life and identity, being used to express one. Some would say that these brands have
their own personality, the brand personality, which can be defined as the set of human
characteristics associated with a given brand. Thus, it includes such characteristics as
gender, age and socioeconomic class, as well as such classic human personality is both
distinctive and enduring.
Based on the premise that brand can have the personalities in much the same way as humans,
brand personality describe brands in terms of human characteristics. Brand personality is seen
as valuable factor in increasing brand engagement and brand attachment, in much the same
way as people relate and bid to other people. Much of the work in the area of brand
personality is based on translated theories of human personality and using similar measures
of personality attributes and factors. Brand personality refers to the set of human
characteristics we associated with the brand. A common way of determining this is to reply
on the metaphor: If the brand was a person, what would he/she be like? we then list and
group the traits to describe the brand as, for example: caring, approachable and trustworthy.
However, there is a lot more we can do.
Because many people interact with brands as though they were other people, it is important to
understand what a brand personality consists of, and how its characteristics can be used to
affect the relationship between the brand and its user. Knowing and understanding the brand
24
personality gives a good insight into this relationship, and into peoples attitudes towards the
brand, and is also as important guide to communicating the brand.
Peoples personalities are determined largely through the value and beliefs they have, and
other personality characteristics they develop. An example of value or belief is honesty.
Many people believe in being honest in everything they do and say. An example of
characteristic is confidence. This is not a belief, but more of a behavior. There are, of course,
many value/beliefs and characteristic that a person may have, but there are some that are
particularly likeable. It is these likeable values and characteristics that people are inevitably
attracted. Examples of these include dependability, trustworthiness, honesty, reliability,
friendliness, caring, and fun-loving.
There are about two hundred words that describe personality characteristics, and these can be
used for putting personality into brands. To illustrate how people think in personality terms
when making judgments about brands, here are the results of consumer research into how
people feel about tow companies. When asked question: if these companies are people, how
would you describe them? their replies were:
Company A
Company B
Sophisticated
Easy going
Arrogant
Modest
Efficient
Helpful
Self- centered
Caring
Distant
Approachable
Disinterested
Interested
25
These two companies are actually competitors in a service industry. If you were asked of
these two companies you would like to be your fiends, you would probably choose company
B, as did 95% of other respondents. It is not surprising that the service level of company B
can be better experience for customers than that of company A. it is also easy to conclude that
if customers consistently experience these differences between the two companies, then the
brand image of company B will be much better than company A.
A further point of interest arising out of this research is that people tend to prefer brands that
fit their self-concept. Everyone has views about themselves and how they would like to be
seen by others. And they tend to like personalities that are similar to theirs, or to those whom
they admire. Thus, creating brands with personalities similar to those of a certain group of
consumers will be an effective strategy. The closer the brand personality is to the consumer
personality (or one which they admire or aspire to), the greater will be the willingness to buy
the brand and deeper the brand loyalty.
26
Brand personality traits are formed and influenced by any direct or indirect contact that the
consumer has with a brand. A brand, unlike a person, cannot think, feel or act. A brand has
no objective existence at all; it is simply a collection of perception on the mind of the
consumer. Consumers accept the marketing actions to humanize brands. One explanation fort
this can be found in the theories of animism, which suggest that there exists need by people to
anthropomorphize objects in order to facilitate interaction with the nonmaterial world.
Anthropomorphize occurs when human qualities are attributed to non human objects, e.g.
brands. Consumers easily assign personality quality to inanimate objects like brands in
thinking about the brands as if they are human characters.
In a direct way, personality traits are associated with a brand by the people associated to that
brand. One direct way to form and influence brand personality is user imaginary. User
imaginary is defined as the set of human characteristics associated with the typical or
stereotype user of the brand. Associations with the company employees or CEO and the
brands product endorsers are also direct ways by which brand personality traits are formed
and influenced. The personality traits that of the people associated with a brand are
transferred directly to the brand. The theories of animism describe another process
mechanism that directly explains the specific ways in which the vitality of the brand can be
realized (Fournier, 2004). Spokespersons that are used in advertising can have personalities
that fit those of the brand they advertise. Over time, the personalities of the spokesperson are
transmitted to the brand. The brand-person associations can also have a more personal nature.
Brands can be associated with person who use or used that particular brand, for example a
close friend or a family member. Also, brands received as gifts can also be associated with
the person from whom the gift was received. These person associations serve to animate the
brand as a vital in the minds of the consumers. Obviously, this aspect is much less under the
control of the marketers.
Indirectly, the brand personality is created by all the elements of the marketing mix. Betra,
Lehman and Singh suggest that the personality of a brand is created over time, by the entire
marketing mix of the brand - its price (high or low, odd or even), retail store location
(imaginary associations), product formulation (ingredients, benefits), and product form
27
(solid/liquid. Etc.), packaging details (color, size, material, shape), symbol; used an all phases
of the brand communication, sales promotion, and media advertising.
Another form of animism explains how brand personality is created in a more indirect way.
This form of animism involves complete anthropomorphization of the brand object itself.
Human qualities of emotionality and thought are transferred to the brand. This is achieved
with the help of the marketing actions, especially advertising. For example, the brand
character of M&M in the M&M commercials has the capacity to laugh and joke.
One of the advantage of the brand personality is that based on their distinctive personalities,
consumers are able to differentiate between brands. Another advantage is that the consumer
can interpret the brands image in such a way that it is personally more meaningful. Brand
personality encourages more active processing on the part of the consumer. Thus, the
consumer put more efforts in creating and using the brand personality. A further advantage of
brand personality is that life is given to a brand. By vitalizing a brand, another perspective of
brand personality can be examined, namely the role of a brand as relationship partner in a
consumer-brand relationship. Next we will concentrate on these consumer-brand
relationships.
Whether the brand is a product or a company, the company has to decide what personality
traits the brand is to have. There are various ways of creating brand personality. One way is
to match the brand personality as closely as possible to that of consumers or to the personality
that they like. The process will be
28
User imaginary user imaginary can be based on either typical users (people you see using
the brand) or idealized users (as portrayed in advertising and else were). User imaginary can
be powerful driver of brand personality, in part because the user is already a person and thus
the difficulty of conceptualizing the brand personality is reduced. For example Charlie has a
feminine, strongly independent brand personality driven by it user imaginary. The upscale
personality of Mercedes and the sexy, sophisticated personality of Calvin Klein are similarly
influenced by user imaginary.
Sponsorship activities such as events sponsored by the brand will influence its personality.
Swatch, for example, reinforces its offbeat, youthful personality will targeted sponsorships
that have included the Freestyle Ski World Cup in Breckenridge, the first International
Age how long a brand has been on the market can affect its personality. Thus new entrants
such as Apple, MCI, and Saturn tend to have younger brand personalities than brand such as
IBM, AT&T, and Chevrolets, and it as all too common far a major dominate brand to see as
strongly and old fashioned, a brand for older people.
29
The brand personality construct can help brand strategies by enhancing their understandings
of peoples perceptions of and attitude towards the brand, contributing to a differentiating
brand identity guiding the communication effort and creating brand equality.
Enriching understandin
The brand personality metaphor can help a manager gain an in-depth understanding of
consumer perceptions and attitudes towards the brand. By asking people to describe a
brand personality, feelings and relationship can be identified that often provide more
insight than is gained by asking about attribute perceptions.
Are you what you drive? That is what are companies seem to be asking and in the same
breath trying to convince you about. In other words, are you the Hyundai accent owner who
commands immediate respect wherever she goes (including fro the potential father-in-law) or
are you the suave executive from the Chevrolet ad who is ever ready to share a moment with
loved one? With a plethora of new models in the market, and generic benefits (such as space
or fuel efficiency) of a particular car segment hardly a distinguishing factor between car
models, marketer are increasingly differentiating on the emotional pay-off a particular car
model/brand provides to the customer. This, of course, varies from the segment to segment
and also on how long a particular model has been in the market.
For instance, while advertising for entry level or smaller cars tends to focus more on the
rational or functional benefits of the vehicles, the differentiations is increasingly on the
emotional benefits when it comes to high end cars.
Generally, it has been seen as one move up the value chain, the differentiation is more on
the emotional pay-off. People buy car as an extension of their personality rather than just
features. A car, in India, helps build up show off, social esteem value. The advertising would
also vary according to the segment which one is targeting, he says. For instance, the
Chevrolet Optra ad (which depicts a young husband driving his wife to see the moon on the
occasion of Karvachauth) shows an Optra consumer as someone who believes in family
values and indulging loves ones.
We find that typically profile of an Optra consumer is someone who is in the age group of
35-45years and has a chauffer. He buys a car not only for himself but also for the family and
tries to make up, for not being able to spend enough time, by indulging love ones, points out
dutta. The positioning goes well with the companies catch lines of for a special journey
called life.
High end car maker Skoda auto too, through its advertising, attempts to connect with its
consumer on emotional level. Car is the extension of the personality and our advertising
shows the consumer to be youthful, image-conscious and even bit a macho. The campaign
jointly made by Skodas marketing department and ad agency IB&W not only communicates
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the quality of the brand but an appreciation for the finer things in life. The target Skoda
consumer is a SEC A1, primarily male, businessman or someone in the senior management,
says Shashank vaid, manger (marketing), Skoda Auto India. Surely, image building does
come higher in the consumers scheme of priorities when buying a new car than ever before.
The importance of brand image has risen sharply in the last few years. At the segment level,
the increase in importance is greater for the mid-size cars, indicating the relevance of brand
among the more expensive market segments. The manufacturer need to focus more o how
consumers perceive them as offering exciting cars and being committed towards them.
Contemporariness of model has a big impact on purchase decision. The perception of the car
in terms of its performance and design, quality, sales, after sales, cost of ownership, apart
from brand image, all impact upon the purchase decision.
According to Bhatia, as long as advertising for cars is strongly differentiated and sharply
positions the model and at the same time satisfies a define need segment, it shall have the
capability to break the clutter and creates a unique and compelling reason for consumers to
purchase. One good example of this is Ford Ikon- the josh machine made a tremendous
impact on consumers in offering to satisfy a clear need. You can see some more of this with a
recently launched premium hatch back as well.
Interestingly, the strategy marketer follow changes a bit when it comes to addressing the
smaller car category with the rational benefits of a brand tending to be the focal point of the
campaign. We have found that typically a buyer for a smaller car (sub Rs 4 lac) looks for
aspects such as reliability and fuel efficiency. This changes as we move up since in case the
consumer has been with the category for a longer time and hence it is important t to talk of an
emotional pay off.
A case in point is the Maruti 800 campaign in which the kids who is playing with a toy
Maruti 800 exclaims to his dad (when asked how long will he keep on running the car), papa
ki Kara, petrol khatam hi nahin Honda. The ad cleverly conveys that the car just keeps going
on and on. It ends with the voiceover telling us that Maruti Suzuki is most fuel-efficient car.
However in the small car segment, the rational benefits magic is not always applicable. Take
the case of Hyundai Santro, the advertising of which has evolved over the years from initially
conveying mainly the functional benefits of the model to connecting with the consumer on an
emotional level now. When we launched the Santro, we started with the positioning if the
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car being a complete family car which was completely rational positioning. But then two
things happened- the product found acceptance in the market and the competition came up
with similar product in the market.
Brand image is not driven by good advertising alone but is significantly impacted upon by the
cars performance and design, quality, and the cost of ownership. Among the three, product
quality has the highest correlation with brand image. Small car buyer seeks capability in
advertising, and fuel efficiency is relatively more important to them. Technology, innovation,
and good influence premium mid-size buyers. One reality for us in India is that the market is
extremely price/value conscious. While making purchases based on above, there is rational
side, which does have an impact on the decision on a particular make and model of car. Be it
rational or an emotional decision, consumers would have to think as a bevy of new models
flood the Indian market.
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LUXURY VEHICLES
Luxury vehicle is a marketing term for a vehicle that provides luxury pleasant or
desirable features beyond strict necessityat increased expense (see: definition of luxury).
The term suggests a vehicle with greater equipment, performance, construction precision,
comfort, design ingenuity, technological innovation, or features that convey brand image,
cachet, status, or prestigeor any other discretionary feature or combination of features.
Automobile manufacturers market specific makes and models that are targeted at particular
socio-economic classes, and thus "social status came to be associated more with a particular
vehicle than ownership of a car per se." Therefore, automakers differentiate among their
product lines in "collusion" with the car-buying public. While a high price is the most
frequent factor, it is "styling, engineering, and even public opinion which cars had the highest
and lowest status associated with them."
Every era in automobile history has had "a group of car marques and models that have been
expensive to purchase, due to their alleged superiority of their design and
engineering". Aimed at wealthy buyers, such automobiles might be generically be
termed luxury cars. "This term is also used for unique vehicles produced during "an era when
luxury was individualistic consideration and coachwork could be tailored to an owner like a
bespoke suit." Although there is considerable literature about specific marques, there is a lack
of systematic and scholarly work that "analyzes the luxury car phenomenon itself."
In contemporary usage, the term may be applied to any vehicle type
including sedan, coupe, hatchback, station wagon, and convertible body styles, as well as
to minivans, crossovers, or sport utility vehicles and to any size vehicle, from small to large
in any price range.
Though widely used, the term luxury is broad and highly variable. It is a perceptual,
conditional and subjective attribute and may be understood differently by different people:
"What is a luxury car to some... may be 'ordinary' to others."
34
35
not found on mass market cars, there is better handling and performance, and
the nameplate itself is part of the value proposition.
Compact executive cars include the Volvo S60, Lexus IS, BMW 3 Series, and MercedesBenz C-Class which particularly emphasize sporty handling. Other vehicles such as the Lexus
ES and Acura TL are also considered entry-level luxury as well, though they do not fall under
European luxury classifications as they are larger and not sold there.
Recently, the entry-level luxury has been very competitive, and there has been priceoverlapping with well-equipped non-luxury cars. The bestselling vehicles of the marque are
frequently compact executive cars, such as the BMW 3 Series that makes up 40% of the
vehicles that BMW sells worldwide.
Mid-luxury/executive cars
The mid-luxury segment are commonly referred to as executive cars in Britain, Obere
Mittelklasse in German, and Grandes Routires in French. Examples include the Volvo
S80, BMW 5 Series,Mercedes-Benz E-Class, and Jaguar XF.
Although having similar dimensions to mid-size cars and large family cars, executive cars
have lower sales volumes and higher development costs (for better performance and
amenities), thus executive cars are usually positioned as premium vehicles, as base trims with
less equipment and smaller engines are not sold in U.S. and Canadian markets. [26] Also due to
the problem of steep depreciation, especially concerning cars from less prestigious brands,
most executive cars are produced by marques that specialize in larger/more expensive
vehicles.
Vehicles in this segment include the mid-range models of several luxury car
manufacturers. There are also some flagship sedans in this segment, such as the Acura
RL and Infiniti M37/56. Executive cars such as the BMW 5 Series are crucial to a luxury
automaker's bottom line, and although not the highest-selling model, they generate a
significant amount of profits due to the lucrative technology options.
typically have mid-displacement V8 engines, though recently some marques have offered a
V6 but without much success.
Vehicles in this category include some of the models from the flagship lines of luxury car
brands. Examples include the Lexus LS, Audi A8, Volkswagen Phaeton, BMW 7
Series, Mercedes-Benz S-Class, Jaguar XJ and in the US, the Lincoln Town Car and Cadillac
DT S.
Ultra-luxury cars
R.L. Polk and Company, a global automotive information and marketing firm that provides
solutions to automotive and related industries, has defined the term "super luxury" segment
for luxury cars costing more than $100,000 USD. This bracket includes the entire lineup
of Rolls Royce, Bentley, Aston Martin,Maybach, and Maserati. The top-performing variants
of flagship cars from Audi, BMW, Mercedes-Benz and Jaguar are often included here.
There are ultra-high performance cars from "exotic brands" that also exceed the $100,000
USD mark, but would not necessarily be categorized as luxury automobiles, such as the
offerings from Ferrari, Lamborghini and Porsche.
Luxury SUV/Crossover
The luxury-type sport utility vehicle (SUV) segment is not a recent development. This
marketing category was created with Kaiser Jeep's 1966 Super Wagoneer as the first true
luxury four-wheel drive (4x4) vehicle. It was the first SUV to offer a V8 engine, automatic
transmission, and luxury car trim and equipment in a serious off-road model. The Super
Wagoneer was "a pioneer that blazed a trail for today's luxury SUVs". It came with long list
of standard equipment that included bucket seating with center console, air conditioning,
seven-position tilt steering wheel, a vinyl roof, as well as "Antique Gold" trim panels on the
body sides and tailgate. After American Motors Corporation (AMC) purchased Jeep, the
vehicles were upgraded and refined, including features such as an optional electric sliding
steel sun roof, "possibly the first offered on an SUV".[38] The late-1970s Jeep Wagoneer
Limited "set the sport-utility market on its ear ... was the most luxurious four-wheeler anyone
had ever seen."
The SUV models generated higher-profit-margins than ordinary automobiles, and automakers
introduced new luxury models during the late 1990s. For some manufacturers, luxury SUVs
were the first SUV models they produced. Some of these models were not traditional SUVs
based on light truck as they are classified as crossovers. SUVs from non-luxury brands had
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experienced a surge in popularity through early 2000s, causing the traditional luxury marques
to follow.
SUVs from the luxury marques grew at almost 40 percent to more than 430,000 vehicles,
excluding SUV-only brands like Hummer and Land Rover, while luxury car sales in the U.S.
during 2003 suffered a 1% decline, and non-luxury SUV sales were flat. By 2004, 30 percent
of major luxury brands' U.S. sales are now SUVs. Luxury brands in particular led the
development of crossover SUVs(as opposed to body-on-frame SUVs), making it one of the
fastest growing segments in the market, as the forecast for 2002 was approximately 240,000
vehicles and that could double by 2006.[41]Research data showed luxury SUV buyers are
compared those vehicles to SUVs of mass market brands, and not shopping around luxury
cars, thus the SUV is becoming the key to bringing new customers to the luxury dealerships.
Certain luxury SUVs use body-on-frame underpinnings, often being badge-engineered
versions of their non-luxury counterparts, and retaining the rugged off-road and towing
capabilities. Examples include the Lexus LX and Lincoln Navigator, which are the premium
versions of the Toyota Land Cruiser (itself a luxurious SUV in the United States) and Ford
Expedition, respectively.
Other luxury SUVs are crossovers using unibody construction, often sharing the platform
with compact executive and executive cars. For example, the Infiniti FX is based upon
the Nissan FM platformthat also underpins other Infiniti cars. Audi and BMW developed
crossovers to compete in the SUV segment as they did not have an existing body-onframe vehicle in their lineup. The Lexus RXwas the earliest luxury crossover on the market,
and it has since been the best-selling luxury vehicle in the US, so it has inspired similar
competitors from rival marques.[45] While early luxury crossovers released in the late 1990s
have resembled traditional boxy SUVs, recent offerings have prioritized sportiness over
utility such as the Infiniti FX and BMW X6.
CHARACTERSTICS
38
Luxury cars tend to offer a higher degree of comfort than their mainstream counterparts,
common amenities include genuine leather upholstery and polished "woodgrain-look"
dashboards. Compared to mainstream vehicles, luxury cars have traditionally emphasized
comfort and safety. Luxury vehicles are also a status symbol for conspicuous consumption.
Contemporary luxury cars also offer higher performance and better handling, which is often
known as sport luxury. However in Europe, where large-displacement engines are often
heavily taxed and many luxury buyers shy away from conspicuous consumption, brands offer
buyers the option of removing exterior engine-identifying badges.
Forbes noted that the reputation of luxury marques enables them to continually introduce
many new safety technologies and comfort amenities, such as anti-lock brakes, electronic
stability control and DVD entertainment systems, before they trickle down to mass market
cars. Numerous "smart car" features are largely only found on luxury cars as of 2009.
The rear-wheel drive with longitudinal engines (FR) is a common layout of luxury cars.
European marques like Mercedes-Benz, BMW, and Jaguar have almost never adopted frontwheel drive and retained a lineup mostly or entirely made up of FR cars. Japanese brands
such as Lexus and Infiniti also have predominantly FR lineups. The FR layout, while more
expensive than the FF, has been retained by these luxury manufacturers as it allows for higher
performance engines (particularly the straight-6, V8, and other engine configurations with
more cylinders), better handling, and a smoother ride.
American manufacturers also largely followed the FR for their luxury brands (as well as their
mass-market cars of the time). However, due to the Arab Oil Embargo of 1973 and the 1979
fuel crises, began eliminating their FR platforms in favor of the more economical front wheel
drive transverse
engine layout (FF).
Chrysler
went
100%
FF
by
1990
and GM's Cadillac and Buick brands for the US were entirely FF by 1997. One of the few
notable holdouts was Ford's Lincoln Town Car and Lincoln LS.
In the 21th century, as part of the revamp of its design and image, Cadillac did return most of
its lineup (sedans, roadsters, crossovers and SUVs) to have rear- and all-wheel-drive, the only
exceptions being the front-wheel drive Cadillac BLS (which is not sold in North
America) and the Cadillac DTS. Chrysler returned its full-size cars to this layout with
the Chrysler 300. Ford's Lincoln retained the longtime FR platform for the Town Car,
intended for use as a limousine and chauffeured car, but newer offerings such as
the MKZ and MKS will use newer FF platforms shared with mainstream Ford vehicles, with
all-wheel drive as an option.
Popular Audi models range in on-road price from below rupees thirty-two lakhs to a bit
above rupees one-Crore, including
40
Audi A4 (Sedan)
Audi A6 (Sedan)
known for its high performance, acceleration and torque. At the showroom, this car costs
around 47 lakhs with an on-road price of around 52 lakhs. This includes standard ancillary
charges also.
A6 3.0 FSI (Petrol)
This A6 3.0 FSI petrol is the mid range petrol model in India, which features Audi's
remarkable 3.0L DOHC naturally aspirated engine. This engine is globally known for its high
performance, acceleration and torque. The A6 3.0 FSI is now available at a showroom price
of around 47 lakhs with an on road price of around 52 lakhs including supplementary
charges.
Audi A8 (Sedan)
44,14,100
46,20,954
49,10,857
44,14,100
Popular BMW sedans are available from a bit above rupees thirty lakhs to a bit below rupees
one crore fifty lakhs, including
44
45
46
BMW (SUV)
BMW X-5 (SUV)
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Chevrolet cars in India are a product of Chevrolet, a brand which people associate trust and
luxury with. A Chevrolet car was known for its phenomenal influence in the American
market during the 60s. Chevrolet cars in India were introduced by General Motors' India
operations. Chevrolet India became a full fledged reality on June 6, 2003 and is today selling
some of the popular variants. Chevrolet cars in India including the latest Chevrolet Beat have
taken the nation by storm.
The rising popularity of Chevrolet Cars in India has resulted in a huge fan
following. Chevrolet India has an interesting history. Having debuted in the 1920's, the first
Chevrolet car in India was the National Series AB Touring with wooden wheels. However,
Chevrolet India had to close shop in 1952-1953 following the Indian national policy. Once on
a sabbatical, Chevrolet India has bounced back and is creating ripples in the Indian Auto
scene.
GM primarily launched the European brand Opel which failed to interest the Indian
consumer. Chevrolet Car then made a phenomenal foray with cars to suit varying tastes.
Chevrolet Cars in India had a stupendous start in 2003 with sales shooting up immediately.
Chevrolet India proved its worth as soon as it reentered India and the success of the Chevrolet
car continues to lead GM till date.
Popular Chevrolet sedans range from Chevrolet cars costing below rupees six lakhs fifty
thousand to Chevrolet cars costing above rupees twelve lakhs thirty thousand, including
49
52
Chevrolet (Hatchback)
Chevrolet hatchbacks range from Chevrolet cars costing a bit above rupees three lakhs fifty
thousand to Chevrolet cars costing a bit below rupees eight lakhs twenty five thousand,
including
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Fiat Hatchbacks
Currently Fiat India has only one hatchback model, the Fiat Palio Stile - with four variants.
The Fiat Palio Stile is it's world car that is based on the 174
platform developed on the lines of a design by the Idea Institute of Turin, Italy. This car has
brilliant aerodynamic features that give it a low drag coefficient of just 0.33 CD. Its exteriors
exude clean lines and fresh styling. Fiat's range extends from Fiat cars costing a bit above
rupees three lakhs fifty thousand to Fiat cars costing a bit above rupees four lakhs. Palio
variants include
Palio 1.1 SL Stile (Petrol)
The Palio Stile 1.1 SL is Fiat's entry range model that features Fiat's revolutionary 1.1 litre
FIRE petrol engine that delivers optimum performance and torque thereby delivering
excellent power and acceleration. This variant has a showroom price of around Rs. 3.6 lakhs
and on-road price of around Rs. 3.95 lakhs, which is inclusive of all charges such as
insurance, octroi, RTO, etc.
Palio 1.1 SLE Stile (Petrol)
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The Palio Stile 1.1 SLE is Fiat's mid range model in the 1.1 Stile series with midrange
features and aesthetics. It features Fiat's revolutionary 1.1 litre FIRE petrol engine that
delivers optimum performance and torque thereby delivering excellent power and
acceleration. New cars in this series have a showroom price ranging from around Rs. 3.72
lakhs to around Rs. 4.17 lakhs inclusive of all charges like insurance, octroi, RTO, etc. Car
prices vary with the dealer's location.
Palio Stile 1.1 SLX (Petrol)
The Palio Stile 1.1 SLE is Fiat's top range model in the 1.1 Stile series with top edge features
and aesthetics. The Palio Stile 1.1 SLE is now available at a showroom price of around Rs.
3.93 lakhs with an on road price of around Rs. 4.4 lakhs including accompanying charges.
Palio Stile 1.6 Stile Sport (Petrol)
The Palio 1.6 Stile Sport is Palio's sporty model with loads of sporty features. Fiat's
remarkable 1.6L four cylinder DOHC petrol engine delivers awesome performance and
torque thereby delivering brilliant power and acceleration. At the showroom, this car costs
around Rs. 4.34 lakhs with an on-road price of around Rs. 4.9 lakhs. This includes standard
ancillary charges also.
Until the recent avalanche of new car makes and brands, Fiat cars were a common sight both
in urban and rural India. The Fiat brand continued to be available after 1952 when most other
foreign car brands left India, and Fiat cars enjoyed a niche without competition. The re-entry
of other foreign car brands in India has made Fiat change its strategy, gear up Fiat's
production capacity, and hit the market with its four Fiat Palio variants while other variants
are in the pipeline.
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Ford (Sedan)
Popular Ford Sedans range from Ford cars costing a bit below rupees five lakhs to Ford cars
costing bit above rupees nine lakhs eighty thousand, including
Ford Ikon
The Ford Icon exudes terrific style with its dynamic interiors
and contemporary styling. Guaranteed to stop traffic and draw attention, the Ford icon excels
with contemporary styling and superior looks. Ford (Sedan) The Ford Fiesta with its petrol
and diesel variants targets the upper middle class consumer with Ford cars ranging between
rupees six lakhs and ten lakhs. Ford Fiesta variants include
Fiesta 1.4 Duratec Exi (Petrol)
This variant of Ford Fiesta makes it matchless in its segment due its supreme driving
dynamics, technology, comfort and elegance. New cars have a show room price of around
Rs.6,02,000 and on-road price of around Rs.6,75,000. Ford Fiesta 1.4 Duratec Exi prices vary
with the car dealer's location.
Fiesta 1.4 Duratec Zxi (Petrol)
The design of this variant perfectly combines style and stability. New cars in this series have
a showroom price ranging from around six lakhs to around seven lakhs inclusive of all
charges like insurance, octroi, RTO, etc. Fiesta 1.4 Duratec Zxi car prices vary with the car
dealer's location.
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Honda car for the Indian market, was launched by HSCI in 1997. Honda cars, including both
sedans and SUV models are popular in India. Honda cars in the Indian market have been
exhibiting record sales of year after year as Honda car in India has earned itself a very
remarkable reputation for reliability.
Honda cars have sleek looks, are comfortable, and have successfully built a reputation of
being highly maneuverable and environment friendly. All Indian Honda car models run on
petrol. Honda's cars are strongly associated with advanced design and technology, apart from
its established qualities of durability, reliability and fuel-efficiency.
Honda Car in India has models like Honda City ZX and Honda Civic which primarily
targeted at the middle class consumer. Honda followed up the success of its middle-class
friendly Honda cars with higher-end and costlier models including both SUVs and sedans.
Currently, Honda India produces Honda City, Honda Civic, and Honda Accord models,
while Honda CRV is still fully imported from Japan.
Honda Sedans
Currently Honda India has three Sedan models, the Honda City, Honda Civic, and Honda
Accord that offer a choice of sedan car prices ranging from rupees seven lakhs to rupees
twenty lakhs.
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City Zx VTEC
The Zx VTEC is the top range model in the Zx series loaded with top range features. At the
showroom, this car costs around Rs. 8 lakhs with an on-road price of around Rs. 9 lakhs. This
includes standard ancillary charges also.
Honda Civic (Sedan)
One of the most sold cars in America, what drives the Civic is
its high level of fit and finish and an impressive reputation for reliability, especially for an
economy car. Impressive fuel economy, environmental awareness and engaging performance
have also played a large role in making the Civic so popular. Honda Civic models range in
price from around rupees 12 lakhs to just above rupees 13.5 lakhs
Civic 1.8V MT(Petrol)
The Civic 1.8V MT (petrol) is Honda's entry level presentation that comes with manual
transmission in the Civic family. The Civic 1.8V MT (Petrol) is now available at a showroom
price of around Rs. 10.9 lakhs with an on road price of around Rs. 12.32 lakhs including
accompanying charges.
Civic 1.8S MT(Petrol)
The Civic 1.8S MT is Honda's upscale presentation with manual transmission. Driving this
brilliant vehicle is simply an indescribable exhilaration. New cars have a showroom price of
around Rs.11, 43,649, and an on-road price of around Rs.12, 86.000. Honda Civic 1.8S MT
car prices vary in lakhs upon the car dealer's location.
Civic 1.8V AT (Petrol)
The Civic 1.8V AT (petrol) is Honda's entry level presentation that comes with automatic
transmission in the Civic family. Driving this brilliant vehicle is simply an indescribable
exhilaration. New cars in this series have a showroom price ranging from around Rs. 11.63
lakhs to 13 lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
Civic 1.8S AT (Petrol)
The Civic 1.8V AT (petrol) is Honda's upscale presentation that comes with automatic
transmission in the Civic family.The Civic 1.8 S AT is now available at a showroom price of
around Rs. 12.9 lakhs with an on road price of around Rs. 13.7 lakhs including
supplementary statutory charges.
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CR-V MT (Petrol)
Loaded with cutting-edge technologies, Honda CR-V has modern and dynamic design and
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yet is classically elegant having unrivalled road-presence. The CR-V MT is the SUV with
manual transmission. New cars in this series have a showroom price ranging from around Rs.
17.6 lakhs to 20.7 lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
CR-V AT (Petrol)
Loaded with cutting-edge technologies, Honda CR-V has modern and dynamic design and
yet is classically elegant having unrivalled road-presence. The CR-V AT is the SUV with
automatic transmission. The 5-Series 523i (Petrol) is now available at a showroom price of
around Rs. 18.3 lakhs with an on road price of around Rs. 21.5 lakhs including
supplementary statutory charges.
Honda cars in the Indian market had a record sales of 61, 327 units in 2006-07 financial year
- achieving a 43.5% growth over its previous year's sales. The entire range of Honda cars
including Honda City, Honda Civic, Honda Accord, and Honda CR-V has sold well.
However, Honda City ZX, the car known to Indian consumers for a longer period than the
recent series of new Honda cars, held the lead with sales of 40,464 units in 2006-07.
Hyundai Hatchbacks
Currently, Hyundai Motor India markets two hatchback models including the Hyundai Santro
Xing across five variants, and the Hyundai Getz Prime across four variants. Hyundai
hatchback car prices range from around rupees three lakhs to around rupees six lakhs.
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passenger car for the middle class Indian consumer, the Hyundai i10 (Hatchback), with its
petrol variants, offers an on-road price range between Rs.3,80,000 and Rs.5,20,000. Variant
models include
i10 D-Lite (Petrol)
The D-Lite is Hyundai's entry range model in the small car segment. The cheapest car in i10
series with entry level price tag, it features the same 1.1L irDE engine along with its other
siblings. This variant has a showroom price of around Rs. 5.3 lakhs and on-road price of
around Rs. 5.92 lakhs, which is inclusive of all charges such as insurance, octroi, RTO, etc.
i10 Era (Petrol)
The Era is the upscale model in the i10 series from Hyundai. However, it shares the same
1.1L irDE engine along with its other siblings in the i10 range, but has vastly improved
features. At the showroom, this car costs around Rs. 3.83 lakhs with an on-road price of
around Rs. 4.40 lakhs. This includes standard ancillary charges also.
i10 Magna (Petrol)
The Magna is the upper range model in the i10 series from Hyundai. It shares the same 1.1L
irDE engine along with its other siblings in the i10 range. At the showroom, this car costs
around Rs. 4.05 lakhs and an on-road price of around Rs. 4.48 lakhs. This includes standard
ancillary charges also.
i10 Magna O (Petrol)
The Magna (O) is the top range model in the i10 series from Hyundai with loaded aspects and
features. It shares the same 1.1L irDE engine along with its other siblings in the i10 range.
This variant has a showroom price of around Rs. 4.83 lakhs and on-road price of around Rs.
5.3 lakhs, which is inclusive of all charges such as insurance, octroi, RTO, etc.
and an on-road price of around Rs. 4.8 lakhs. This includes standard ancillary charges also.
Getz Prime 1.3 GLS (Petrol)
The Getz Prime 1.3 GLS (Petrol) is the entry level model with a powerful 1.3L engine under
its bonnet. New cars in this series have a showroom price ranging from around Rs. 4.95 lakhs
to Rs. 5.53 lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
Getz Prime 1.3 GLX (Petrol)
The Getz Prime 1.3 GLX (Petrol) is the upscale level model with a powerful 1.3L engine
under its bonnet. The Getz Prime 1.3 GLX (Petrol) is now available at a showroom price of
around Rs. 5.10 lakhs with an on road price of around Rs. 5.75 lakhs including
supplementary statutory charges.
Getz Prime GVS 1.5 CRDI (Petrol)
The Getz Prime GVS 1.5 CRDI (petrol) is the only variant in the GVS series with a CRDI
(petrol) engine featuring a 1.5L CRDI engine. The Getz Prime GVS 1.5 CRDI (Petrol) is now
available at a showroom price of around Rs. 5.75 lakhs with an on road price of around Rs.
6.45 lakhs including supplementary statutory charges.
Hyundai Sedans
Currently, Hyundai Motors India has four sedan models with diesel and petrol variants, the
Accent with a single variant, the Verna with eight variants, the Elantra with four variants, and
the Sonata Embera with six variants. Hyundai sedan car prices range from around rupees six
lakhs to around rupees eighteen lakhs.
Hyundai Accent
The Accent is a mid sized sedan that virtually offers all the
facilities of a luxury sedan. Available only in petrol version, it meets an entire array of
expectations that connoisseurs have from a sedan. The Accent GLE is quite well-known in
the Indian market. It has maximum features at a minimum price and generally perceived as a
marvel of resource optimization both for the consumer as well as for the manufacturer.
Accent GLE (Sedan)
The Accent GLE pleases the eye with stunning looks and affable interiors. At the showroom,
this car costs around Rs. 5.15 lakhs and an on-road price of around Rs. 5.6 lakhs. This
includes standard ancillary charges also.
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variant has a showroom price of around Rs. 15.75 lakhs and on-road price of around Rs. 17.5
lakhs, which is inclusive of all charges such as insurance, octroi, RTO, etc.
Hyundai SUVs
Currently, Hyundai Motors markets only a single SUV, the Tucson across a single variant the
Tucson 2.0 CRDi
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A high-performance model, the CLS class combines the roominess of a 4-door sedan with the
sleek design of a coupe. Electronically controlled, driver adaptive 7-speed AT endows an
impeccable drive. New cars in this series have a showroom price ranging from around Rs. 69
lakhs to Rs. 77 lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
Benz CLS Class 500 (Petrol)
A high-performance model, the CLS class combines the roominess of a 4-door sedan with the
sleek design of a coupe. Electronically controlled, driver adaptive 7-speed AT endows an
impeccable drive. New cars in this series have a showroom price ranging from around Rs. 83
lakhs to Rs. 92 lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
Mercedes Benz S-Class (Sedan)
A stable mate of the Benz models, the Mercedes-Benz S-Class is reportedly the world's best
selling luxury flagship sedan. As the first model in the Mercedes-Benz line-up, the S-Class
has introduced many of the company's latest innovations, including advanced safety systems,
drive train technologies, and interior features. The Mercedes Benz S-Class with its petrol
variants targets the upper middle class consumer and offers an on-road price range between
rupees eighty lakhs and rupees one crore thirty lakhs. Mercedes Benz CLS Class variants
include
Benz S-Class S350L (Petrol)
The Mercedes Benz S Class S 350L is the entry level model in the super luxury S class series.
New cars in this series have a showroom price ranging from around Rs. 77.57 lakhs to Rs.
86.02 lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
-Benz S-Class 500L (Petrol)
The Benz S class 500L is the upper range model in the super luxury S class series. New cars
in this series have a showroom price ranging from around Rs.1 crore 8 lakhs to Rs. 1 crore 19
lakhs, which inclusive of all charges like insurance, octroi, RTO, etc.
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Mitsubishi Pajero(SUV)
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The world famous manufacturer, Volvo needs no introduction. To give a brief summary of
the company, it is the reputed Swedish luxury automobile maker, which was founded in 1927
in Gothenburg, Sweden. With a head office in New Delhi, Volvo Cars in India is an arm of
Volvo Car Corporation worldwide.
Internationally, the company has its headquarters in Gothenburg, Sweden. With global sales
of around 450,000 cars annually, the company has its operations in more than 100 markets
around the world.
Volvo (Wagon)
XC90 (Wagon)
XC 90 is a chiselled piece of art, passionately crafted with attention to minute details. Tried
and tested in Indian conditions, it performs exceptionally well to give results beyond
imagination. These models are available in range price from below rupees forty seven lakhs
to a bit above rupees sixty three lakhs, including
XC90 D5 AWD (Diesel)
The D5 AWD is absolute classic presentation from the Volvo stables. New cars in this series
have a showroom price ranging from around Rs. 47,00,000 lakhs to around Rs.55,00,000
lakhs inclusive of all charges like insurance, octroi, RTO, etc. car prices vary with the car
dealer's location.
XC90 3.2 AWD (Petrol)
3.2 AWD is an elegant car with all the features that a premium luxury car should have. The
3.2 AWD is now available at a showroom price of around Rs.48,00,000 with an on road price
of around Rs.55,00,000 including supplementary charges.
XC90 V8 AWD (Petrol)
XC90 V8 AWD is embedded with luxurious interiors, modern entertainment and safety
features. New cars in this series have a showroom price ranging from around Rs.54,00,000 to
around Rs. 63,00,000 inclusive of all charges like insurance, octroi, RTO, etc. car prices vary
with the car dealer's location.
Currently, Volvo is importing its cars as completely built units (CBU). Currently only two
models namely the S80 and the XC 90 will be sold in India. Volvo will gauge the sales of
their premium models through its dealerships in India and could bring in more models in the
future.
It is aimed to study the luxury car market and its scope in India. The project is analyzed the
demographic, psychographic and buying characteristics of the customers in buying the luxury
cars. It includes the detailed study of customers focusing on the various parameters,
development of automotive industry and import of luxury cars in India that lead to identifying
and understanding the scope and growth opportunities of luxury car brands in India.
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RESEARCH METHODOLOGY
SOURCES:
Internet
Articles from Hindustan times, Times of India
No. OF SAMPLES
The no. of samples taken in this research was 40.
AREA OF SAMPLING
The area of sampling of this research was Delhi/NCR, India.
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RESEARCH
FINDINGS
81
AGE
No. Of Respondents
18-24
25-34
14
35-44
11
45-54
55 or more
Total
40
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Analysis
According to the respondents, Age group of 25-34 is most interested in buying Luxury
cars that is around 34% followed by Age Group of 35-44.
Answers
No. of Respondents
Yes
37
No
Analysis
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The result was totally skewed to one side and respondents agree that Purchase of Luxury cars
is totally related to the Income level of an Individual which is 92%.
No. of respondents
Price
10
Quality
15
Availability
Involvement
Recommendation
Total
40
Analysis
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Most of the respondents prefer quality followed by price and availability. This response
shows that customers are ready to pay of quality.
Value
No. of Respondents
Quality
Flaunt Value
20
Interested in art
Exclusivity
10
Analysis
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In opinion of Respondents, majority of People buy luxury cars because they want to flaunt
their superiority over others. Followed by those people who really have taste of art and
exclusiveness of the luxury that is around 30%.
No. of respondents
Strongly Agree
11
Agree
17
Neutral
Disagree
Strongly Disagree
Total
40
Analysis
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Our assumption is correct, about 73% of the respondents believe in the superior quality of
luxury cars.
6. Services provided by luxury brands is better then others ?
Answers
No. of respondents
Strongly Agree
10
Agree
15
Neutral
Disagree
Strongly disagree
Total
40
Analysis
About 72% of the respondents are of the view that service quality in luxury car brands is
more superior then other brands.
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No. of respondents
local brands
14
Luxury brands
18
International Brands
Total
40
Analysis
Here we can see that now a days most of the people prefer to by luxury car brands. A major
part purchase luxury brand followed by local brands. International brand has least share.
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Answers
No. of Respondents
Yes
17
No
23
Analysis
From the above pie chart we can see that now India is growing as a luxury market for the
people who are real luxury lovers and they dont have to go to foreign lands to purchase one.
People are able to choose among the large variety of luxury cars which are now present in
India also.
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Answers
No. of respondents
Engine power
Shape
Acceleration time
Looks
10
Brand
15
Total
40
90
ANALYSIS
The graph indicates that majorly people tend to see as brand of the car as the major factor that
affects the buying decision of a customer and other factors that are too taken into
considerations are engine power, shape, looks, etc
10. Which brand you prefer to buy most for buying a luxury car?
Answers
No. of respondents
PORSCHE
LAMBORGHINI
AUDI
MERCEDEZ
BUGATI
BMW
11
BENTLEY
TOTAL
40
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ANALYSI S
The graph indicates that 11 out of 40 people prefer BMW brand for buying a luxury car as
Compared to other brand like Mercedes, Porsche, etc.
the past few years. This growth of luxury car sales is driven majorly by increased wealthcreation within average Indian population and the desire of individuals to join the millionaireclub by flaunting their wealth. Growth of Indian economy has been faster than other
emerging economies during recent times. Globally, India had the highest growth-rate (22.7%)
of millionaire population during the year 2007. India added 23,000 millionaires from 2006 to
2007, taking total figure to around 123,000 millionaires; wealth as measured in US Dollars
(Merrill Lynch Cap Gemini Report). However, during recession, the country noticed a
decline of 31.6% in number of millionaires.
But post-recession recovery was much faster compared to other economies. These numbers
are expected to grow up to 1,40,000 by the year 2010. This robust growth in the number of
millionaires in the country, being one of the highest globally, paves the way for further
growth of the luxury car market.
In addition, the average age of an Indian millionaire has come down to 35-40 years from the
earlier average of 50 years. An increasing number of young entrepreneurs and professionals
from various fields are buying luxury cars and this affluent segment has been boosting sales
volumes. If we look into city-wise wealth distribution, the Northern region in India
(comprising of cities like Delhi, Chandigarh, Ludhiana, Shimla, and Jalandhar) comprises
higher density of millionaire population than rest of the parts. This region therefore has the
highest luxury car sales. After this come, Greater Mumbai, Ahmedabad, Pune, and Chennai.
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These cities have a luxury car sales pattern which is still higher compare to rest of the
country.
The historical regional sales data of luxury cars sold in India, shows that 32-35% of the total
are sold in Delhi region only. This is possibly due to the psychological preference shift
among the North Indian population to show off their wealth. Delhi is followed in this list by
Mumbai, and Punjab state, where Ludhiana and Jalandhar are at the top two slots.
Delhi also happens to be the biggest market for Mercedes-Benz, Mumbai ranks second
followed by the states of Gujarat, Karnataka, Tamil Nadu and Punjab. This geographically
distributed population could be clustered into classes on the basis of overall behavioral
patterns observed in luxury brand consumers.
Luxury car majors in India - Mercedes-Benz, BMW and Audi put together have around 85%
market share. The German car brand Mercedes-Benz had firstmover advantage as it had
started operations in India in 1995 and there was no direct competition in this category. So, it
remained Numero Uno luxury car brand in India for more than a decade. But, market
dynamics have changed significantly after the entry of BMW in 2006 followed by Audi in
2007.
The overall market share of luxury cars has been reorganized due to the newentrants. This has
resulted in new equations being forged amongst the various players, driven primarily by a
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rapidly swelling millionaire-club having diversified choices and preferences. In 2006, BMW
had 9% market share which has now grown to 42%, catapulting BMW as the number one
luxury brand in terms of sales. Audi which started its operations in 2007 has had the fastest
growth-rate amongst the three and has now captured 20% of the luxury car market. So, the
Indian luxury car market is favorable for new entrants who are capable of grabbing the
untapped opportunities by following the customer-oriented approach and having ability to
induce demand by innovation at each level of marketing mix.
European Major BMW entered in India in 2006. The company with headquarters in Gurgaon
and production unit in Chennai had initial investment of 1.1 billion rupees. It has swiftly
developed both infrastructure and dealership network. The production plant at Chennai,
established in 2007, has an annual capacity of 3000 units in a single shift and it produces
BMW 3 series and BMW 5 series sedans. The rest of models- BMW 7 series, X3 and X5 are
imported as CBUs. BMW 3 and 5 series account for 80% of the total sales of company in
India, of which BMW 5 series has highest sales.
BMW India, with its aggressive marketing, fast expansion of product profiles, strategic
dealership location selection and supplementary financial service offering, has managed to
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wrest biggest market share from Mercedes-Benz. BMW and Audi, both focus on sportier
features and new launches to encourage young buyers. Decrease in the average age of luxury
car buyers is a favorable condition for this kind of selling strategy.
In the Indian scenario, where 75% of passenger cars and 60% of luxury cars are purchased
through financing, financial supplementary support is critical to success of the car makers.
Taking this into account, BMW Group is planning to introduce BMW Financial Services
India, which will provide services to BMW customers, providing financing facilities to fleetowners and commercial-financing to their dealers. Discounting older models is another
successful strategy applied by the company. It is also planning to launch Pre-Owned Car
Sales Program in 2010. BMWs 5-year coverage (after sales) is another attractive factor
compared to the 2-year warranty provided by Mercedes-Benz. In the Indian scenario, the
luxury cars are generally chauffeur-driven. This trend has been well-imbibed by BMW as it
has focused more on back-seat facilities during designing and marketing. The company has
been focusing on some other technologies like Integral Active-Steering, Park Distance
Control (PDC) and Head-up Display (X5) for providing enhanced features for comfort in the
Indian driving conditions.
BMW has been acting very swiftly in identifying its dealership locations so as to achieve
maximum sales volume aligned. BMW with 15 dealership locations (two locations in Delhi
and Mumbai) competes with Mercedes-Benz having 32 dealership locations because it has
strategically expanded its dealership network to higher demand luxury car markets. In next
phase BMW is planning to target emerging tier 1 and 2 cities like Jaipur and Lucknow to
compete with Mercedes whose 25-30% sales revenue comes from tier 2 cities.
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The local production provides Audi, ability to cater customer needs in a cost effective
manner. Audi is always a first choice of techno-geeks who want to get more involved during
the drive. Besides being the fastest growing luxury brand in India, Audi regularly brings new
models and variants of existing models to surprise the car lovers.
Audi Q5 is the most endorsed imported sports utility vehicle (SUV) in India. The company
followed the same dealership location strategy as BMW by selecting similar sales regions of
high demand (four dealership locations in northern and central regions Delhi, Gurgaon,
Chandigarh and Ludhiana) at 13 locations country-wide. Due to these efforts, Audi has
rapidly captured market in India and has exerted considerable pressure on the other dominant
players. The company noticed a 65% jump in sales (200 cars) in May 2010 compared to May
2009 (121 cars). Both Audi and BMW have focused in the world class music system facility
and ultra luxury looks in their models.
Luxury car segment is going to change as there are many new cars lined-up for launch during
the period 2010-2012 with approximately 50 to 60 new models from major global brands.
Tata Jaguar, Lexus, Bentley and Fiat are some of the players who would be seen as
aggressive entrants with their high market experience. The market future will not only be
driven by product itself but also services associated with it. So it would be a war of biggies,
competing on diverse parameters. Automobile market will be noticing a great shift but as the
previous pattern of market shows, the only mantra of success will be a holistic approach
aligned to the companys brand image and customer oriented vision.
A better way to look at the trends that exist in this market is to segregate them into categories,
namely the marketing mix trends (product, price, place, promotion) and consumer behavior
trends.
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With its excellent R & D facilities to back the low cost labour, many multinationals have set
up operations for this purpose. But now something more revolutionary is happening.
Indias top 10 luxury car models dominated by Mercedes Benz, BMW and Audi have seen a
57% surge in their sales between June 2009 May 2010. Audi A6, Mercedez Benz E Class
and BMW 3 Series models saw more than 100% growth from last year. Volkswagen had
sales of 1,876 cars from January 2010 August 2010, an increase of 66% of the same period
last year
So how come is the shift happening in such a dynamic fashion?
Increasingly affluent population with high disposable incomes and an extravagant
lifestyle
Increasing customer confidence because of the growth of the economy 8.8% this
year compared to just 6.7% last year
The target customer who used to over 45 (top level executives) earlier has changed to
mid 30s (entrepreneurs and those have reached success at a young age)
Newer reasons to buy these cars such as festivities, gifts and also a means of flaunting
ones wealth. Todays generation increasingly believes in the phrase Got it? Flaunt
it!
Upgradation to higher end models because the prices fall after a very small period of
time. Eg: Porsche Cayenne which is available for Rs 95 lakh in the showroom can be
found for less than Rs 75 lakh in the used car market after one year of use
Increasing demand from the rural areas which is in keeping pace with the economic
growth and development
The future of luxury cars in India looks increasingly bright. It is expected to be the fifth
largest automobile market in the world by 2015.
This growth will not only be driven by the middle class because of their increasing purchase
power but also the rural consumers. This gives these companies a great opportunity for the
future.
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with sales of more than 400 units and there are plans of opening many more centres in the
near future.
Mercedes is also now looking at introducing an AClass segment car in the country.
Now this should be something interesting. Some may say that this may undermine their value
of being elite or a status symbol. But you never know, it would be interesting to see a product
like BMWs Mini Cooper on the Indian roads. And for people who may not normally be able
to afford a Mercedes, this could be their chance.
The other plans include on starting the financial services arm of Mercedes which would
concentrate on financial leasing and also providing insurance. This could be an interesting
initiative for those who are looking to paying the costs in instalments.
As pointed out earlier, this interest in Indian market is mostly because of the higher
disposable incomes among the people of the country. The way the economy has chugged
along to a growth rate of more than 8.5% has also brought some measure of confidence
among the people. Another notable factor for companies like Mercedes is that their target
group has changed to young high flying executive who are just about 25 odd and have the
money to splurge.
brands, BMW, Mini and Rolls-Royce," BMW Chairman Norbert Reithofer told reporters
here.
He said the company had sold 1.22 million BMW vehicles 2.3 lakh Mini and 2,711 units of
Rolls-Royce in 2010 recording 14.6%, 8.1% and 170.6% growth respectively over the
previous year.
Germany, US, China and UK were the key markets for the auto major, even as the company
recorded "dynamic" growth in many smaller markets such as Brazil, Russia, India, South
Korea and Turkey.
Commenting on sales target in India, BMW Director (Marketing) Ian Robertson said the
company would look at high double-digit growth for the current year.
To keep pace with that, the company has accordingly increased its Chennai assembly plant
capacity to 10,000 units per annum from 8,000 earlier.
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Since the early 1990s when economic reforms were made, India has emerged as the second
largest automobile market in the world, in terms of sales volume. Today, when most of the
economies are still suffering the after effects of economic downturn, India is witnessing a
strong growth in the sales of luxury cars every quarter. After nearly 30 years since the launch
of Maruti 800, Indian car market has entered a new growth era where India is projected to be
on course to become the largest luxury car market in the world. With the number of
millionaires in India growing at around 20 per cent annually, all the luxury car makers like
BMW, Audi and Mercedes are looking at India for their future growth and expansion.
The report entitled Opportunities in Indian Luxury Car Market provides a succinct but deep
dive analysis of the current status and overall growth prospects of the Indian luxury car
sector. With the synchronization of all the factors, we have presented a logical analysis of the
present and future growth potential in the Indian luxury car segment. We have studied the
Indian luxury car market by categorizing it into two segments: Luxury Car sales in volume
terms and luxury car sales by manufacturers. The research also probes how the introduction
of auto financing services by various luxury car manufacturers is driving growth in the
countrys luxury car sales. Opportunities in Indian Luxury Car Market is an outcome of
comprehensive research and analysis of the Indian luxury car sector. The research team has
also attempted to identify various factors that is helping India to emerge as the leading luxury
car market in the world. The report also analyses the impact of the union budget FY 2012 on
the Indian luxury car market. The team has also mapped the competitive landscape of the
sector and tried to shed light on the operations/strategies of the key players.
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With 6246 cars delivered to customers in the calendar year 2010, BMW India has achieved
leadership position in the luxury car segment in India for the second consecutive year.
In 2010, BMW India sold
Dr. Andreas Schaaf, President, BMW India said, Our commitment to India is amongst the
strategic decisions of the BMW Group. In 2010, we embarked on the second wave of India
market offensive with a very carefully planned and passionately executed business strategy. I
am truly impressed with the entrepreneurial foresight, willingness to perform and adaptability
to challenges that everyone at BMW India has demonstrated. Together with our dealer
partners, we have established the strategic direction required for BMW Groups future
succession India.
The total BMW India sales in 2010 grew by 73% over last year. The BMW 3 Series sales
registered a growth of over 111%, the new BMW 5 Series of 51% and the BMW 7 Series of
53%.
We live by Premium: Our strong brand creates highly desired cars, cars with future, vehicles
that inspire our customers and will take our company to a new dimension through
their success. The BMW 3 Series, the new BMW 5 Series, the new BMW 7 Series and the
newly launched BMW X1 are stars from the BMW portfolio that will take our company to
new heights through their success said Dr. Andreas Schaaf.
In 2010, BMW India achieved market share of over 40 % in the luxury car segment of the
Indian automotive market.
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CONCLUSION
The advancing demand of luxury cars across the globe represents a promising trend to the
growth of the automobile industry.
The rising demand of luxury cars in India is a sign of people getting richer day by day as well
as their desires are also increasing and there is also increase in the spending power of the
customer which shows that economy of India is also developing at a fast rate.
There has been a 200 % growth in the automobile industry in India especially in the luxury
segment and the sports car segment. Due to which European luxury car makers are
introducing most of their sports cars models in India due to the rising demand and interest of
the people.
Due to the risen demand of luxury sports cars special sports car clubs have been formed in
India where the membership criterion to join the club is to have a sports car or the
membership is only by invitation. The major sports car clubs in India are Canon Ball Club
and Gautam Singhania super car club India.
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QUESTIONNAIRE
FOR
SCOPE OF LUXURY CARS IN INDIA
106
d) Disagree
e) Strongly disagree
107
c) International brands
Porsche
Lamborghini
Audi
Mercedes
Bugati
BMW
Bentley
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BIBLIOGRAPHY
109