Ronali Mishra

Aniket Kumar
B. Harinath Reddy
Raghvendra Yadav
 Brief History
•German Brand

•Designed by Ferdinand Porche in 1931 .

•Launched by VolksWagen group in 1938 .

•More than 25 Million Cars produced till now .

•Ranked 4th in CAR OF THE 20TH CENTURY polls .

 PRODUCT’S NATURE AND MARKET STRUCTURE
 A luxury good

 A Premium Hatch Back Car

 Non Collusive Oligopolistic Market

WHY ??

Few sellers many buyers

Large market share
Differentiated Product
Barriers to entry
Large Investments
Legal Barriers
Research & Developers
Sellers are price makers
Strategic Behavior
 CONSUMER BEHAVIOUR

Price
DEMAND CURVE FOR BEETLE

Quantity

More Inelastic.
 ASPECTS OF DEMAND

Income and Wealth

Expectation

Prices of related goods

Personal Preferences

 PRICE ELASTICITY OF DEMAND

Price

P1

P0

Quantity
Q1 Q0
INCOME ELASTICITY OF DEMAND

Income

I1

I0

Quantity
Q0 Q1
 CROSS PRICE ELASTICITY OF DEMAND
Price of Accord

P1

P0

Quantity of Beetle
Q0 Q1
 PRODUCER’S BEHAVIOUR

Price
Price elasticity of supply

P1

P0

Quantity
Q0 Q 1

SHORT RUN
 PRODUCER’S BEHAVIOUR

Price
Price elasticity of supply

P1

P0

Quantity
Q0 Q1

LONG RUN
 ASPECTS OF SUPPLY
Technology

Expectations

Prices of Related Goods

Input Prices
 COST STRUCTURE
o Fixed Cost
Plant & Machineries

o Variable Cost
Direct Material
 Carbon Steel
 Iron Castings
 Alloys & Aluminum
 Plastic
 Rubbers

o Direct Labor ( very minimal )

 FACTORS AFFECTING THE COST STRUCTURE

I. Price of Raw materials ( Price of carbon steel , castings )

II. According to industry estimates prices of steel were gone

up by 27% between January to April 2008 . ( Ref –
Financial Expression . Com )
 FACTORS AFFECTING PRICE

Cost

Competition

Demand

Product Life Cycle

Motives of the firm