A STUDY OF CONSUMER BEHAVIOR IN U.P.

TOWARD HYUNDAI CARS

(A CASE STUDY OF KANPUR NAGAR)

PROJECT
REPORT
SUBMITTED TO THE
DAYANAND ACADEMY OF
MANAGEMENT STUDIES

By
PRASHANT MISHRA

Under the Supervision of

Miss Stuti Jain
BBA, DAYANAND ACADEMY OF
MANAGEMENT STUDIES,
KANPUR
 Chapter-I
INTRODUCTION

“ A study on consumer behavior towards

Hyundai cars in Kanpur ”

This thesis is an investigation into consumer

perceptions towards HYUNDAI CAR in Kanpur. It is a

well-known fact that automobile Industry is the

cornerstone of some of the most influential economics

in the world like USA and Japan. Indian automobile

industry is all set to play the same role in Indian

economy. Hyundai automobile ltd. is one of the most

modern, growing and vibrant automobile company on

the global map. The four-wheeler market of Hyundai is

also one of the fastest growing company market in

India.
 INDUSTRIAL PROFILE

“In India there are 100 people per vehicle, while this figure is 82 in China. It is
expected that Indian automobile industry will achieve mans motorization status by
2014”

AUTOMOBILE INDUSTRY AN OVERVIEW

In India, as in many other countries, the auto industry is one of the largest
industries. It is one of the key sectors of the economy. The industry comprises of
automobile and the auto components sectors and encompasses commercial
vehicles, multi utility vehicles, passenger cars, two-wheelers, three-wheelers,
tractors and related auto components. The industry has shown great advances since
deli censing and opening up of the sector to foreign direct investment (FDI) in
1993. It has deep forward and backward linkages with the rest of the economy, and
hence, has a strong multiplier effect. This results in the auto industry being the
driver of economic growth and India is keen to use it as a lever of accelerated
growth in the country.
 Since the first car rolled out on the streets of Mumbai (then Bombay) in
1898, the Automobile Industry of India has come a long way. During its early
stages the auto industry was overlooked by the then Government and the policies
were also not favorable. The liberalization policy and various tax reliefs by the
Govt. of India in recent years have made remarkable impacts on Indian
Automobile Industry, which is currently growing at the pace of around 25% per
annum, has become a hot destination for global auto players like Volvo, General
Motors, Ford, Hyundai, Tata motors and other big players who are emerging
slowly.
Today Indian automotive industry is fully capable of producing various
kinds of vehicles and can be divided into 03 broad categories: Cars, two-wheelers
and heavy vehicles. A well developed transportation system plays a key role in the
development of an economy, and India is no exception to it. With the growth of
transportation system the Automotive Industry of India is also growing at rapid
speed, occupying an important place on the ‘canvas’ of Indian economy.
During the early stages of its development, Indian automobile industry
heavily depended on foreign technologies. However, over the years, the
manufacturers in India have started using their own technology evolved in the
native soil. The thriving market place in the country has attracted a number of
automobile manufacturers including some of the reputed global leaders to set their
foot in the soil looking forward to enhance their profile and prospects to new
heights.
At present about 75 percent of India’s automobile industry is made up by
small cars, with the figures ranking the nation on top of any other country on the
globe. Over the next two or three years, the country is expecting the arrival of more
than a dozen new brands making compact car models. The automobile sector of
India is the seventh largest in the world. In the year, the country manufacturers
about 2.6 million cars making up an identifiable chunk in the world’s annual
production of about 73 million cars in a year.
 EVOLUTION OF THE AUTOMOBILE INDUSTRY IN INDIA

In India, since the early 1940s when the auto industry rolled out first passenger
car, its significance in the economy has progressively increased. However, from its
early days until the mid-1980s for two-wheelers and LCVs, and until the early
1990s for passenger cars, the focus of development of the automotive industry has
been on import substitution. The current low penetration levels in India in all three
segments of the industry, namely commercial vehicles, passenger cars and two
wheelers and under-exploitation of the potential of this industry to foster.
The growth of the economy have resulted in the auto industry contributing a
relatively low (nearly 5 per cent) share of industrial output in India compared to
the 8-10 per cent range in other developing countries such as Mexico and Brazil
and much higher (15-17 per cent range) in developed countries such as the United
States and Germany. Even the share of employment is low at 2.5 per cent for the
auto industry in India compared to 3-7 per cent in developing countries and around
15 per cent in mature economies.

The economic liberalization that dawned in India in the year 1991 has succeeded in
bringing about a sustained growth in the automotive production sector triggered by
enhanced competitiveness and relaxed restrictions prevailing in the India soil. A
number of Indian automobile manufacturers including Tata Motors, Maruti Suzuki,
Mahindra and Mahindra, and TVS motors have dramatically and internationally to
attain its rightful place in the world trade. A global recession for last two year
notwithstanding, the industry has shown appreciable resilience and adjusted to the
challenges of the environment.
There are at present 13 manufacturers of passenger cars and multi utility vehicles,
7 manufacturers of commercial vehicles, 11 of 2 or 3 wheelers and 10 tractors
besides 4 manufacturers of engines. The industry has an investment of a sum
exceeding US$ 10 billion. During 1999-2000 the turnover of the automotive
industry as a whole was US$ 12.5 billion approximately. The industry employs
500,000 people directly and more than 10 million people indirectly and is now
inhabited by global majors in keen competition.

The Automobile industry in India is the seventh largest in the world with an
annual production of over 2.6 million units in 2009. In 2009, India emerged as
Asia’s fourth largest exporter of automobiles, behind Japan, South Korea and
Thailand. By 2050, the country is expected to top the world in car volume with
approximately 611 million vehicles on the nation’s roads. Indian automobile
industry has matured in last few years and offers differentiated products for
different segments of the society. It is currently making inroads into the rural
middle class market after its inroads into the urban markets and rural rich.
In the recent years Indian automobile sector has witnessed a slew of investments.
India is on every major automobile player’s radar. Indian automobile industry is
also fast becoming an outsourcing hub for automobile companies worldwide, as
indicated by the zooming automobile exports from the country. Due to rapid
economic growth and higher disposable income it is believed that the success story
of the Indian automobile industry is not going to end soon. Automobile industry in
India also received an unintended boost from stringent government auto emission
regulations over the past few years. This ensured that vehicles produced in India
conformed to the standards of the developed world.
 CURRENT STATUS OF THE AUTOMOTIVE INDUSTRY

The industry over a period of time has installed a robust capacity as given below:
SEGMENT INSTALLED CAPACITY
COMMERCIAL VECHICLES 41000
CARS AND MULTI UTILITY
1146000
VECHICLES
TWO AND THREE WHEELERS 5696000
GRAND TOTAL 7252000

SEGMENT KNOWHOW

Among the two-wheelers segments, motorcycles have major share in the market.
Hero Honda 50% motorcycles to the markets. In it Honda holds 46% share in
scooter and TVS makes 82% of the mopeds in the country. 40% of the three-
wheelers are used as goods transport purpose. Piaggio hold 40% of the market
share. Among the passenger transport, Balaji is the leader by making 68% of the
three-wheelers contribution to the market. Cars dominate the passenger vehicle
market by 79%. Maruti Suzuki has 52% share in passenger cars and is a complete
monopoly in multipurpose vehicles. In commercial vehicle, Tata Motors dominates
the market with more than 60% share.
Tata Motors is also the world’s fifth largest medium & heavy commercial vehicle
manufacturer. The passenger car and motorcycle segment in India auto market is
growing by 8-9 per cent. The two-wheelers segment will close 11.5% rise by 2007.
Commercial vehicle to grow by 5.2%. passenger vehicle exports have grown over
five times and two-wheelers exports have reached more than double. Exports of
auto components, whose manufacturing costs are 30-40 per cent lower than in the
West, have grown at 25% a year between 2000 to 2005.
FACTS ABOUT THE AUTOMOBILE INDUSTRY
 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 India 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.
CURRENT SCENARIO OF THE AUTOMOBILE INDUSTRY
According to Commerce Minister Kamal Nath, India is an attractive destination for
global auto giants like BMW, General Motors, Ford and Hyundai who were setting
base in India, despite the absence of specific trade agreements.
 On the cost front of Indian automobile industry, OEMs are eyeing
India in a big way, investing to source products and components at
significant discounts to home market.
 On the revenue side, OEMs are active in the booming passenger car
market in India.
 By 2011, India is expected to witness over Rs 40,000 crore of
investment.

The automobile industry in India is on an investment overdrive. Be it passenger car

or two-wheelers manufacturers, commercial vehicle makers or three-wheelers
companies – everyone appears to be in a scramble to hike production capacities
.
EMERGING TRENDS IN THE AUTOMOBILE INDUSTRY

Globalization is pushing auto majors to consolidate, to upgrade technology,

enlarge product range, access new markets and cut costs. They have resorted to
common platforms, modular assemblies and systems integration of component
suppliers and e-commerce. The component industry is undergoing vertical
integration resulting into emergence of ‘ systems and assembly suppliers’ rather
than individual component suppliers. Thus, while most component suppliers are
integrating into tier 2 and tier 3 suppliers, larger manufacturers and multinational
corporations (MNCs) are being transformed into tier 1 companies.
To meet the concomitant testing and certification activities relating to higher safety
and emission norms, testing infrastructure in the country is being overhauled. A
substantive state funding is being planned in upgrading the testing infrastructure
with participation of industry. Environmental pollution and the need to conserve
existing supply of fossil fuels have led to search for alternative fuels. In addition to
supporting Greenfield research in this area, an ambitious phased programme to
upgrade carbon fuel quality commensurate with higher emission norms is also
being undertaken.

CONCLUSION

Easier and faster mobility of people and goods across the regions, countries and
continents is a cherished yearning of mankind. The automobile industry’s potential
for facilitating this mobility s enormous. Wheels of development across the globe
would have to be powered by this industry. However, a seamless development of
this industry across countries and continents alone will help in realization of this
objective. For such seamless and barrier-free development of the sector, countries
will have to come together and develop better understanding. Industry across
countries will have to meet challenges of newer technologies, alternative fuels and
affordability of automobiles by people at large through constructive cooperation.
The earlier we are able to achieve this the better it would be for the world
development.
HYUNDAI MOTOR COMPANY

Type : Public

Industry : Automotive

Founded : December, 1967

Founder : Chung Ju-yung

Headquarters : Seoul, South Korea

Products : Automobiles, commercial vehicles, engines

Area served : Worldwide

Staff strength : 57,105 (2011)

Parent : Hyundai Motor Group

Website : www.hyundai.com, www.hyundai.co.in

Company

Logo :
 COMPANY PROFILE:
Hyundai Motor Company is the South Korean automobile

manufacturing company. It is placed sixth among the automobile

maker in the world. Hyundai was started in 1967, when the

founders decided to assemble someone else‟s vehicles. The

founder developed

his own vehicles and succeeding in exporting vehicles to other

countries. The company launched its first car, Cortina, in 1968.
In 1975, the Pony, the first Korean car was released by the
Hyundai with styling by Giorgio Giugiaro of Ital. Design and
power train technology provided by Japan‟s Mitsubishi Motors.
Pony became the top-selling car on the Canadian market due to
its higher degree of quality and refinement in the lowest price
auto segment. In 1985, the one millionth car from Hyundai was
built.

In 1986, Hyundai began to sell cars in the United States. The

company started to produce models with its own technology in
1988, beginning with the mid-size Sonata. In 1991, the company
succeeded in developing its first proprietary gasoline engine, the
four cylinders Alpha, and also its own transmission, thus paving
the way for technological independence. In 1996, Hyundai Motor
India Limited was established with a production plant in
Irungattukottai near Chennai, India.
Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai
Motor Company (HMC). In 1998, Hyundai began to overhaul its image in an
attempt to establish itself as a world-class brand. Hyundai Motor Group,
invested heavily in the quality, design, manufacturing and long-term research
of its vehicles. In 2004, Hyundai was ranked second in “initial quality” in a
survey/study by J. D. Power and Associates. Hyundai is now one of the top
100 most valuable brands all over the world. Since 2002, Hyundai has also
been one of the worldwide official sponsors of the FIFA World Cup. In 2011,
Hyundai sold 4.05 million cars worldwide and the Hyundai Motor Group was
the world‟s fourth largest automaker. Hyundai vehicles are sold in 193
countries through some 5,000 dealerships.

HMIL is the largest passenger car exporter and the second

largest car manufacturer in India. Currently, the company
markets more than 30 variants of passenger cars in six
segments. HMIL‟s first passenger car, the Hyundai Santro was
launched in 23rd September 1998, and was a runaway success.
HMIL forms a critical part of HMC‟s global export hub, it touched
1.5 million in exports in March 2012. It currently exports to more
than 120 countries across the world and has been India‟s
number one automobile exporter for seven year in a row. In
September 3, 2013, Hyundai launched its much awaited car,
Grand i10.
MANUFACTURING FACILITIES:
Hyundai operates the world‟s largest integrated
automobile manufacturing facility in Ulsan, South Korea,
which has an annual production capacity of 1.6 million units.
Hyundai has its production plants all over the world which
include: The Ulsan Plant, the Asan Plant, the Jeonju Plant, the
America Alabama Plant, the China Plant, the Indian Plant, the
Turkey Plant, the Russia Plant and the Brazil Plant.
In India, the Hyundai Plant is located in Irungattukottai, 30
kilometres from Chennai. This plant was set up in May 1996 and
rolled out the first Santro seventeen months afterwards. The plant
is built on 500+ acres of land and had an investment of INR 2,500
crores. HMIL‟s fully integrated state-of-the art manufacturing plant
near Chennai boasts of advanced production, quality and testing
capabilities. To cater to rising demand the company commissioned
its second plant in February 2008, having an installed capacity of
330,000 units per annum. Both the manufacturing units are capable
of producing 630,000 vehicles annually. To support its growth and
expansion plans HMIL currently has 346 dealers and around 800
centres across India. In its commitment to provide customers
cutting edge global technology, HMIL set up a modern multi-
million dollar Research & Development facility in Hyderabad. In
terms of worldwide sales, the US, Chinese and Indian Marketing
are doing well. Hyundai has also developed a model in India for
sales. Hyundai will grab a large share of the car market by
turning its operations in China and India into key design,
manufacturing and export hubs for its entire global operations.
Hyundai has 6 centres worldwide, located in Korea, Germany,
Japan and India. Additionally, there is an American design
centre in California that develops designs for US market.
 TECHNOLOGY:
Hyundai has the Alpha Engine, Theta Engine, S Engine,
Lambda FR Engine, Theta GDI Engine, Class- best power trains,
environment-friendly exhaust systems, green engines, power train
centre and highest performing power trains etc. Hyundai‟s current
design philosophy is known as Fluidic Sculpture, which is heavily
inspired by nature. Hyundai Motor India Engineering (HMIE) gives
technical and engineering support in vehicle development and CAD
&CAE support to Hyundai‟s main R&D centre in Namyang, Korea.
In 2010, Hyundai started its design activities at Hyderabad R&D centre with Styling,
Digital Design & Skin CAD Teams. The R-engine for passenger Diesel cars that meet
the Euro-5 Environmental Regulation Standards is developed by Hyundai and the
company received certification for “low-pollution emitting vehicle in the metropolitan
area”. The company‟s TAU engine received the honour of being named as the
World‟s 10 Best Engines‟ for the past two consecutive years.

VISION AND VALUES:

Hyundai released its „Vision 2020‟ to establish the firm as the

global leader in the automobile market. The company focuses on key
vision strategies:
Automotive Vision: “to become a trusted lifetime partner of our
customer, we will bring a new perspective to automobiles through
innovative mobility solutions based on human-centric, eco-friendly
technologies and services”.
Steel Vision: “as an eco-friendly, resource-circulating company, we

will lead a new era in the steel industry by providing high value-added

products and services and realizing world‟s best competitiveness

based on co-operative relations with our stakeholders”.

Construction Vision: “As a global leading provider of high-value

engineering solutions, we will create the foundation for a batter life
through cross-business synergy and convergence with future
technologies”.
 Hyundai focuses on five main values: Customer Challenge,
Collaboration, People and Globality. Providing customers top service
will be at the top of their agenda. The company will venture into new
areas and not remain traditional. The company will have a spirit of
collaboration. People will be respected and valued. The company is
not limited to country-centric areas but will be known in the global
arena.