Factors affecting Demand

Price
Fig 3 : Price vs Quantity P a g e 7 | 13
We estimated the average price of cars by net realizable value per sales (Total turnover of the
consumer vehicle industry by number of cars sold).
During Jun-19 to Dec-19, average price of passenger vehicles increased by 10.6% (movement along
demand curve) over previous period. Consequently, car sales declined by 17.1%.
Fuel Price (Substitute)
Fig 4 : Effect of increase in Fuel price on Demand curve
Fuel accounts for nearly 50% of operating costs of vehicles. In 2012, the passenger car segment had
witnessed the steepest decline in 12 years. Increased petrol prices had shifted the demand curve
inwards, which decreased the demand. As a result, the petrol vehicle segment had declined by
nearly 14% YoY.