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17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42Guided

A Major Research Project Report Submitted in the partial fulfillment for the degree of Master of Business Administration, DAVV Indore 2011

To study the Factors affecting selection of a car

By 43Submitted By 44Dr. Deepa Joshi 45Ravi Atodiya

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3 46SVIM, 48 49 50

Indore th 47MBA IV Semester

CONTENTS
Acknowledgment Certificate Summary The Indian Automobile Industry HISTORY LITERATURE REVIEW Life Cycle Small car market in India Factors driving the demand for small cars in India India's small car market drives the global biggies luxury car market in India Industry Volatility Industry Conditions Key Factors Key Success Factors Supply Chain of Automobile Industry International Markets Analysis Basis of Competition Key Competitors Tata Motors

Maruti Suzuki India Hyundai Motor India Mahindra & Mahindra Introduction Report Purpose & Context Research Objectives Methodology Research Approach Respondent Profile Research Results Information Sources Used Length of Time from Decision to Order Importance of Waiting Time Time from Placing Order to Taking Delivery Selection criteria Timing of New Car Order and Delivery Age of Car Buyer Limitations Recommendations Conclusion Bibliography Webliography Annexure
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CERTIFICATE

7 61 62This is to certify that Mr. Ravi Atodiya student of Master of Business 63Administration, Shri Vaishnav Institute of Management Indore, have 64successfully completed their project under my supervision. 65During this period, he worked on the project titled To study the 66Factors affecting selection of a car in partial fulfillment for the 67award of the degree of Master of Business Administration. 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 ACKNOWLEDGEMENT 92 93The satisfaction and euphoria that accompany the success 94completion of any work would be incomplete unless the 95names of the people who made it possible whose constant 96guidance and encouragement served as a beacon light and 97crowned efforts with success are not mentioned. 8 4

9 98 99In accomplishing and completing this work, I would like to 100record profound in deftness to my guide, DR.DEEPA JOSHI, 101who inspired and encourage me by providing the required 102facilities and her valuable time and suggestions in 103completing the project work successfully. 104 105At last but not the least, I would like to thanks to my family 106and my dearest friends who have supported me directly or 107indirectly in completion of my project. 108 109 110 111RAVI ATODIYA 112MBA IVth Semester 113SVIM, Indore

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Executive Summary

122 123 This report details the results of a survey of new car buyers which 124 aimed to understand their buying needs and behaviour in relation 125 to build-to-order and short delivery lead times. 126 127 Over 25 private new car buyers, representing 70% of the makes 128 bought in the market in 2010, responded to a self-completion 129 questionnaire distributed at certain points in 2010. The final 130 sample is broadly representative of the India motoring population 131 in terms of region, age, sex, though there are slight differences. 10 5

11 132 94% of the sample was private buyers and 50% traded in a car as 133 part of their purchase. 134 135 TV advertising (1stranked), car magazines (2nd), TV programmes 136 (3rd.) and friends/relatives (4th) were the most common sources of 137 new car information sources used. The internet was used by just 138 by 8% people, and particular by those aged up to 35 years. 139 140 6% of respondents took up to 1 month from the time of their 141 decision to buy a car to making an order. 47% of respondents 142 said that waiting time was important to their choice of vehicle, with 143 younger buyers more likely to say this. 144 145 88% of respondents said their car was delivered up to 1 month after 146 making the order with the dealer. 147 148 149 Colors or paint type was the most popular type of specification 150change, and 21% of those who compromised said they received 151some form of benefit from the dealer for doing so 152 153 154 88% of respondents said the ideal time for receiving their car after 155order was up to 3 weeks. 156 157 Age of buyer also showed significant variations, with 84% of those 158 under 25 saying that order to delivery should be 2 weeks or less. 159 160 Younger car buyers are much more impatient than older buyers and 161 more predisposed to changing their behaviour to ensure they are 162 instantly gratified.. 163 164 165 166 167 168The Indian Automobile Industry is manufacturing over 11 million 169vehicles and exporting about 1.5 million every year. The dominant 170products of the industry are two wheelers with a market share of over 17175% and passenger cars with a market share of about 16%. 172Commercial vehicles and three wheelers share about 9% of the 173market between them. About 91% of the vehicles sold are used by 174households and only about 9% for commercial purposes. The 12 6

The Indian Automobile Industry

13 175industry has attained a turnover of more than USD 35 billion and 176provides direct and indirect employment to over 13 million people]. 177The supply chain of this industry in India is very similar to the supply 178chain of the automotive industry in Europe and America. This may 179present its own set of opportunities and threats. The orders of the 180industry arise from the bottom of the supply chain from the 181consumers and goes through the automakers and climbs up until the 182third tier suppliers. However the products, as channelled in every 183traditional automotive industry, flow from the top of the supply chain 184to reach the consumers. 185Interestingly, the level of trade exports in this sector in India has been 186medium and imports have been low. However, this is rapidly 187changing and both exports and imports are increasing. The demand 188determinants of the industry are factors like affordability, product 189innovation, infrastructure and price of fuel. Also, the basis of 190competition is the sector is high and increasing and the life cycle 191stage is growth. With a rapidly growing middle class, all the 192advantages of this sector in India are yet to be leveraged. 193The key to success in the industry is to improve labour productivity, 194labour flexibility, and capital efficiency. Having quality manpower, 195infrastructure improvements, and raw material availability also play a 196major role. Access to latest and most efficient technology and 197techniques will bring competitive advantage to the major players. 198Utilising manufacturing plants to optimum level and understanding 199implications from the government policies are the essentials in the 200Automotive Industry of India. 201Both, Industry and Indian Government are obligated to intervene the 202Indian Automotive industry. The Indian government should facilitate 203infrastructure creation, create favorable and predictable business 204environment, attract investment and promote research and 205development. The role of Industry will primarily be in designing and 206manufacturing products of world-class quality establishing cost 207competitiveness and improving productivity in labour and in capital. 208With a combined effort, the Indian Automotive industry will emerge as 209the destination of choice in the world for design and manufacturing of 210automobiles. 211

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15 212 213 214The first car ran on India's roads in 1897. Until the 1930s, cars were 215imported directly, but in very small numbers. 216 217Embryonic automotive industry emerged in India in the 1940s 218Mahindra & Mahindra.was established by two brothers as a trading 219company in 1945, and began assembly ofJeep CJ3A utility vehicles 220under license from Willys The company soon branched out into the 221manufacture olight commercial vehiclesf (LCVs) and agricultural 222tractors. 223 224Following the independence, in 1947, the Government of India and 225the launched efforts to create an automotive component 226manufacturing industry to supply to the automobile industry. 227However, the growth was relatively slow in the 1950s and 1960s due 228to nationalisationand the license raj which hampered the Indian 229private sector. After 1970, the automotive industry started to grow, but 230the growth was mainly driven by tractors, commercial vehicles and 231scooters. Cars were still a major luxury. Japanese manufacturers 232entered the Indian market ultimately leading to the establishment of 233Maruti Udyog. A number of foreign firms initiated joint ventures with 234Indian companies. 235 236In the 1980s, a number of Japanese manufacturers launched joint237ventures for building motorcycles and light commercial-vehicles. It 238was at this time that the Indian government chose Suzuki for its joint239venture to manufacture small cars. Following the economic 240liberalisation in 1991 and the gradual weakening of the license raj, a 241number of Indian and multi-national car companies launched 242operations. Since then, automotive component and automobile 243manufacturing growth has accelerated to meet domestic and export 244demands. 245 246Following economic liberalization in India in 1991, the Indian 247automotive industry has demonstrated sustained growth as a result 248of increased competitiveness and relaxed restrictions. Several Indian 249automobile manufacturers such as Tata Motors, 16 8

HISTORY

17 250 Maruti Suzuki and Mahindra and Mahindra, expanded their domestic 251and international operations. India's robust economic growth ed to 252the further expansion of its domestic automobile market which has 253attracted significant India-specific investment by multinational 254automobile manufacturers. In February 2009, monthly sales of 255passenger cars in India exceeded 100,000 units and has since grown 256rapidly to a record monthly high of 182,992 units in October 2009. 257From 2003 to 2010, car sales in India have progressed at a CAGR of 25813.7%, and with only 10% of Indian households owning a car in 2009 259(whereas this figure reaches 80% in Switzerland for example) this 260progression is unlikely to stop in the coming decade.Congestion of 261Indian roads, more than market demand, will likely be the limiting 262factor. 263SIAM is the apex industry body representing all the vehicle 264manufacturers, home-grown and international, in India. 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 18

LITERATURE REVIEW
Dr. Manish Agrawal have studied on the topic Factors affecting car buying behavior of the customer there research was data based, Another research was done by Boston Analytics firm and it was published in auto monitor magazine this research unveils that the majority of the household prefer midsized car. This study indicate significant variations in terms of size, color, 9

19 283 284 engine, fuel, look etc, preferences for getting desirable performance among other things

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Life Cycle
The life cycle stage is growth Life Cycle Reasons The market for manufacturing motor vehicles is consistently increasing. The products manufactured by this industry are profitable. Companies have been consistently opening new plats and employing over the past five years. Japanese and European manufacturers of motor vehicles have entered the market. Industry value added has been rising, along with the rise in GDP. Life Cycle Analysis General improvement in availability of trained manpower and good infrastructure is required for sustainable growth of the industry. Keeping this in view, the Indian Government has launched a unique initiative of National Automotive Testing and R&D Infrastructure Project (NATRIP) to provide specialized facilities for Testing, Certification and Homologation to the industry. A similar initiative is required for creating specialized institutions in automotive sector for education, training and development. 10

21 317 318 319 320 321 322 323 324 325 326 327 328 The auto industry has grown in the clusters of interconnected companies which are linked by commonalities and complementarities. The major clusters are in and around Manesar in North, Pune in West, Chennai in South, Jamshedpur-Kolkata in East and Indore in Central India. The Government is planning to create a National Level Specialises Education and Training Institute for Automotive Sector and to enhance the transportation, communication and export infrastructure facilities. The contribution of automotive sector in the GDP of India is expected to double by 2016 through major spotlight on export of small cars, Multi-Utility Vehicles, Two and Three wheelers

329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 22

Small car market in India

The small car market in India is increasing by leaps and bounds. The indigenous market for small cars now occupies a substantial share of around 70% of the annual car production in India of about one million. The main players in the car market like Tata Motors and Maruti Udyog are fiercely competitive and more or less all the automobile companies in India that have forayed into the production of small cars are trying to out-do each other in terms of design, innovation, pricing, and technology, in order to gain control of the small car market in India. The biggest players in the Indian small car market are engaging in a healthy competition, which has intensified since the Indian government decided to boost the small car sector. In this regard, a reduction in the excise duties has been thought of. Even the engine capacities are expected to be 11

23 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 raised to 1500cc. The new small cars in India cars may even be fueled by gasoline and diesel in the future. With all these facilities, it has been estimated that the indigenous car market is going to move beyond the 3.5 million mark very soon. Suzuki, which is now heading the Indian small car market has plans to invest an additional US$ 650 million for research and development work in its Manesar Plant. This Plant will also be used for manufacturing diesel cars. Suzuki has decided to enter into a joint-venture with Nissan to launch a new mini car model in India. Even Hyundai Motors is on a similar investment spree for research work with a venture of US$ 700 million in India. The two cars from the Hyundai stable - Santro and Getz are already in the market and have been doing exceptionally well in the past few years. It is expected that more and more foreign companies are likely to join the healthy race in the Indian small car market. One of the biggest players in China's car market, Volkswagen, has decided to invest in the Indian small car market. It is supposed to invest a total amount of US$ 540 million and manufacture nearly 100,000 mini cars on an annual basis.

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Factors driving the demand for small cars in India

The increase in the demand for small cars can be attributed to the aspirational lifestyle of people which makes them strive for a car early on in life. The overall age for owning a car has also decreased in recent years. Further, with the growing affluence of the rural sector, owning a car, at least a small car, is a foregone conclusion in modern India. However, since small cars are more affordable and utilitarian, the demand for them has shot through the roof. This rising demand for small cars is attracting companies like General Motors which has increased its yearly production in India to 140,000 vehicles. The Maruti 800 which is the most preferred car among the Indian middle classes can now be bought at a lower cost. Tata Motors has decided to launch a mini-car in 2008, which will cost as less as US$ 2,200. Tata Motors is also going through a process of decision-making, to launch a variety of mini-cars in association with Fiat. Honda has also decided to increase its manufacturing capacity in India to 100,000 very soon. Therefore, the leaders in the market for small cars in India can be seen to engage in a price war to make more cars available to the majority of Indian citizens. The small car market in India is witnessing the maximum activity and is all set for more exciting times ahead, with more players from India and abroad joining the race.

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India's small car market 410 drives the global biggies

409 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 28 Honda has named India the "lead country" for its global small car which is expected to debut in two or three years. This is part of the Japanese automakers strategy to create models for lead countries and modify them appropriately for other global markets. For example, Japan was the lead country for the Jazz. The reason for Hondas India inclination is obvious: the country has become the second-largest maker of small cars, overtaking Brazil (Japan is number 1, but the gap is narrowing). Small cars account for 80 per cent of the domestic market (up from 75 per cent last year) and exports are growing at top speed. According to the Society of Indian Automobile Manufacturers, small car exports rose 53 per cent between April and September to 1,97,249 units against 1,29,090 units a year ago. Little wonder, then, that last Monday, Japans Suzuki Motor said its annual operating profit would be four times its original forecast because of strong India sales. South Koreas biggest automobile maker Hyundai Motors also admitted its growth has been buoyed by small car sales in markets like India. Hyundai recorded more than half of sales from China and India and Toyota saw around a third of sales coming from emerging markets. Analysts say domestic growth rates for small cars have been boosted by the governments efforts to combat the fallout of the financial meltdown in the second half of 2008. As a result, taxes on small cars defined according to length and the size of the engine were cut to 8 per cent. Hyundai Motor India Senior Vice-President (marketing & sales) Arvind Saxena says the economic slowdown of the past one year has reinforced consumer preference for fuel-efficient and inexpensive small cars. Almost a quarter of Hyundais repeat customers now own two small cars, Saxena added. In the past, the second purchase was invariably a mid-sized sedan. Thats precisely why manufacturers, like Nissan Motor Company after the meltdown forced it to shut plants overseas, are investing in emerging markets. Nissan is eagerly waiting to launch its new mini-car that will debut in India before the Europe, US and even Japan. 14

29 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 30 The company, which is Japans third-largest car company, is making India the production hub for the yet unnamed compact car due to be launched in May. It will export to more than 100 countries from its plant in Chennai that has an annual capacity of 400,000 units. Similarly, US automaker General Motors India arm will become one of the only two centers of production of the new mini-car scheduled for launch in the next two months. The car, which is expected to be priced at around Rs 4 lakh and will sell side by side with the hatchback Spark, will be exported to Asia Pacific and European countries from its plant in Talegaon near Pune. The lure of the domestic high-volume game of small cars has also attracted Ford Motor Company to put the Indian car buyer on top of its agenda. Allan Mulally, Fords president and chief executive, says We know the high importance Indian consumers place on value for money. We know (they) want quality, fuel efficiency, technology and safety. And Ford is going to give it to you. The company is investing $500 million on transforming its India business into a volume manufacturing and export hub and a regional centre of excellence for small car development and production, according to a senior company executive. Car ownership in the developing world shows immense potential for growth. A report prepared by Deloitte says there are 511 cars on the road for every 1,000 citizens in the UK, compared to 22 per 1,000 in China and just 11 for India. Analysts predict that the largest purchasing segment by 2020 will be first-time buyers. Besides, small cars from India are making it big in European markets, where people are moving from gas guzzlers to fuelefficient cars and taking the scrap page incentives being doled out by various European governments. According to European Automobile Manufacturers Association, the total passenger car market in Europe is currently pegged at over 14 million units. Estimating the small car market to be 2 to 3 per cent, the total market size for small cars in Europe is pegged at nearly 5,00,000 units, of which over 80 per cent would be met by auto companies Hyundai and Maruti alone. Nearly 75 per cent of the total vehicles sold in the US earlier were bigger cars and trucks. Now, 40 per cent of the US population is moving towards more fuel-efficient cars, suggesting huge export potential. 15

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luxury car market in India

Though the most happening place in the automobile industry is the compact car segment with a launch almost every other week, the real action is somewhere else. In 2009, widely seen as the recession year, Indians bought more luxury cars than ever before. And things are hotting up in the segment with new players making significant inroads in market share and others trying to regain the lost ground. While Mercedes-Benz, which has been in the Indian market since 1995, sold 3,208 cars in 2009, BMW, which came 11 years later, sold 3,619. BMWs market share rose from 9 per cent in 2006 to 33 per cent in 2007, to 40 per cent in 2008, and to 42 per cent in 2009. Audi, the third of the German trio, which started operations in India in 2006, has had a 58 per cent growth. It sold 1,658 cars in 2009 and accounts for around 20 per cent of the market. Mercedes-Benz has been on the slow lane for more than a year. Its market share dipped from 59 per cent in 2007 to 46 per cent in 2008, and to 38 per cent in 2009. But Merc, which still enjoys an unmatched reputation in the country, is stepping on the accelerator. In the first two months of 2010 it outsold BMW439 cars in January and 403 in February against BMWs 368 and 341. Wilfried Aulbur, managing director and CEO, Mercedes-Benz India, said the company was expecting a dip last year and was prepared for it. Last year, our sales were higher than expected, he said. We had foreseen a volume reduction due to the run out of our E-Class. Usually, we sell as many EClasses as the C-Classes. But, last year, we sold only 1,000 of them as against 1,600 C-Classes, which reflected on our volumes. We also parted ways with a few partners whose business philosophy and outlook was not in line with our bullish assessment of the opportunities and needs of the Indian market. But we are again back to being number one in India in January and February this year. But I am not worried about the top slot. I am worried about the sales number and profit, he said. The revamped E-Class has been a runaway success. BMW, however, is in no mood to give up the hard-earned market share. Mercedes selling more cars in January is not a surprise, said Peter Kronschnabl, president, BMW India. We 16

33 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 581 582 583 584 585 586 587 588 589 590 591 592 593 34 will have a couple of months where they will sell more than us, but what matters is December 31. We will have a double-digit growth this year. He expects the luxury car market in India to touch 10,000 cars in 2010, from the current 8,700. The Indian luxury market will grow manifold in the next 2-3 years. We want to play a very big role here, he said. Industry experts are betting on BMW for the time being. Said Manek Bhardawaj, director of Race Tech, which imports and customises luxury cars, In India, the psyche of top-end automobile buyers is to invest in something new and unique. Mercedes has been around for more than a decade now and most people at the top of the pyramid already own it. They want to experience something new and fresh now, and BMW suits them well as it is a new, vibrant and youthful brand. Audi is also doing pretty well, although its brand recognition will take more time in India. What works is not just the newness. BMW regularly adds new vehicles to its portfolio. In 2009 it launched the X6 in the Rs 66 lakh-85 lakh range, and the roadster Z4 which costs Rs 59 lakh. BMW has taken the lead in the Indian luxury market on account of its extremely aggressive model mixes and line-up. The company has been successful in building a wide model line-up, from entry level to top end, in just two years. Merc, on the other hand, introduced variants as and when it felt like. BMWs robust infrastructure investment has also been a contributing factor to its growth in India. They first ensure they have a service centre before they set up their sales office. Thats how particular they are about their customers, said Pooja Chaudary, managing director, Infinity Motors, a BMW dealership in Mumbai. Set to continue the good show, BMW plans to introduce two new models which it sees as its future. The X1, which will open up a new luxury segment in the compact sports utility vehicle class, will hit the Indian market by the end of the year. The second will be a 5 Series car, and the production will start in the third quarter of this year. Audi, which started from scratch to become the formidable brand it is now, is also revving up and has chalked out a threepronged strategyimprove the brand image, beef up the seven-model line-up and build an efficient infrastructure with a good dealer network. All three are looking at tier-2 and tier-3 cities for their next phase of growth. BMW, which has 17 dealerships, will add 10 more cities in its network this year. Seven of these dealerships will be in tier-2 and tier-3 cities. Audi has eight showrooms now, and will open nine more this year. Mercedes-Benz will not have to do much, as it already has 52 touch points across 25 cities. The Indian luxury car market has tripled its size in the past five years. It is expected to grow at the same pace for 2-3 years. With late entrants like Jaguar and Volvo also betting on the growth factor, every player will have to try hard for a share of the pie. 17

35 594 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 36 Booming sales 2009 BMW 3,619 Mercedes-Benz 3,208 Audi 1,658 2010 (Januar y & Febr uar y) Mercedes-Benz 842 BMW 709 Audi 558 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 ` 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 18

37 639 640 641 642 Daimler Chrysler manufactures the Mercedes Benz C and E class models Bentley manufactures the Bentley Range and Bentley Continental models

643Luxury car market in India have grown over the last few years. That 644it continues to grow more efforts must be made by the Indian 645automobile industry and the government of India. And only then the 646luxury car market in India will be able to reach its heights

647 648 649 650 651 652 653 654 655The supply chain of automotive industry in India is very 656similar to the supply chain of the automotive industry in 657Europe and America. The orders of the industry arise from 658the bottom of the supply chain i. e., from the consumers and 659goes through the automakers and climbs up until the third 660tier suppliers. However the products, as channelled in every 661traditional automotive industry, flow from the top of the 662supply chain to reach the consumers. Automakers in India 663are the key to the supply chain and are responsible for the 664products and innovation in the industry. 665The description and the role of each of the contributors to 666the supply chain are discussed below. 667Third Tier Suppliers: These companies provide basic 668products like rubber, glass, steel, plastic and aluminium to 669the second tier suppliers.

Supply Chain of Automobile Industry

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39 670Second Tier Suppliers: These companies design vehicle 671systems or bodies for First Tier Suppliers and OEMs. They 672work on designs provided by the first tier suppliers or OEMs. 673They also provide engineering resources for detailed 674designs. Some of their services may include welding, 675fabrication, shearing, bending etc. 676First Tier Suppliers: These companies provide major systems 677directly to assemblers. These companies have global 678coverage, in order to follow their customers to various 679locations around the world. They design and innovate in 680order to provide black-box solutions for the requirements 681of their customers. Black-box solutions are solutions created 682by suppliers using their own technology to meet the 683performance and interface requirements set by assemblers. 684First tier suppliers are responsible not only for the assembly 685of parts into complete units like dashboard, breaks-axle686suspension, seats, or cockpit but also for the management of 687second-tier suppliers. 688Automakers/Vehicle Manufacturers/Original Equipment 689Manufacturers (OEMs): After researching consumers wants 690and needs, automakers begin designing models which are 691tailored to consumers demands. The design process 692normally takes five years. These companies have 693manufacturing units where engines are manufactured and 694parts supplied by first tier suppliers and second tier suppliers 695are assembled. Automakers are the key to the supply chain 696of the automotive industry. Examples of these companies 697are Tata Motors, Maruti Suzuki,Toyaota, and Honda. 698Innovation, design capability and branding are the main 699focus of these companies. 700Dealers: Once the vehicles are ready they are shipped to the 701regional branch and from there, to the authorised dealers of 702the companies. The dealers then sell the vehicles to the end 703customers. 704Parts and Accessory: These companies provide products like 705tires, windshields, and air bags etc. to automakers and 706dealers or directly to customers. 707Service Providers: Some of the services to the customers 708include servicing of vehicles, repairing parts, or financing of 709vehicles. Many dealers provide these services but, 710customers can also choose to go to independent service 711providers

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Industry Volatility

725The level of volatility is medium. 726Over the past few years, the Motor Vehicle Manufacturing industry 727has become more volatile. This has been the result of fluctuations in 728metal prices and fuel prices, as well as changes in legislation and 729assistance packages. Indias increasing per capital disposable 730income and growth in exports is playing a major role in the rise and 731the competitiveness of the industry. As per the BRIC report Indias 732per capita disposable income from current year will rise by 106% in 7332015. This increase in the spending power has been a forefront of 734the economic development. According to the Economic Times of 735India, economic liberalization allowing unrestricted Foreign Direct 42 21

43 736Investment (FDI) and removing foreign currency neutralization and 737export obligations has been also been one of the key to Indias 738automotive volatility. 739

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Industry Conditions

747Barriers to Entry Barriers to entry in this industry is high These 748barriers are study The cost of developing high volume production 749facilities. The ability to gain access to technology of major global 750operators. The relatively high competition between established 751domestic companies and foreign companies. The automobile 752manufacturing sector is characterized by a high cyclical growth 753patterns, high fixed cost and break-even point levels, and an 754excessive number of participants. Barriers to entry into automobile 755manufacturing activity are formidable. Some of the barriers that need 756to be overcome by a new entrant include: the cost of developing high 757volume production facilities, in order to benefit from economies of 758scale; and the ability to gain access to technology of major operators, 759as the present incumbents include some of the largest multinationals, 760that have considerable claims to new technology. The relative large 761size of domestic market, together with high competition, has already 762seen significant rationalization of this industry 763 764 765 766 44 22

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Key Factors

776Consumer Sentiment Index 777Description: Customer Sentiment Index, 12 month rolling average of 778the Index; historical and forecast data and analysis. 779End customers are very important to ensure the survival of the Motor 780Vehicle Manufacturing industry. Economic downturns and other 781events can affect the expenditure decision of households. When 782customers are not happy or optimistic about the future of the 783economy, they will tend to postpone expenditure until times are 784better. In 2008-09, customer sentiment is expected to fall, which will 785have a brunt on the augmentation in demand of cars. 786Domestic Goods Price Metal Iron and Steel 787Description: The price of input such as steel. 788Steel is a major input used when manufacturing a motor vehicle. 789Rises in the price of steel puts cost pressures on manufacturers, 790which often leads to a fall in profitability. Over the past five years, the 791price of steel has been rising rapidly. These rises in price eventually 792pass from the manufacturers to the end customers. 793Import and Export Taxes (Duties) Motor Vehicle Tariffs 794Description: Tariff rates applicable to the industry

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47 795High tariff may restrict flow of trade but may attract investment if 796domestic market is big enough and growing. Over the last few years 797Indias tariff policies and conditions of import of vehicles have served 798the purpose of attracting investments. Industry is keen that the 799existing tariff structure roadmap and conditions of import of vehicles 800are retained without any modifications because of certain systematic 801deficiencies which make manufacturing less cost competitive in India 802as compared to some of the neighboring countries like China, 803Thailand, Indonesia, etc. 804Wold Price - Energy Crude Oil 805Description: The world price of crude oil, $US/barrel, and price 806analysis. 807The price of oil and petrol affect the driving habits of consumers and 808the type of car they buy. Over the past five years, the price of petrol 809has been influenced the buying decision of motorists, who are 810switching more to fuel efficient options. These include cars that run 811on liquefied petroleum gas (LPG), diesel and small cars that achieve 812better mileage. 813

Key Success Factors

814The Key Success factors in the Motor Vehicle Manufacturing industry 815are: 816Efficiency factor - Improve labour productivity, labour flexibility, and 817capital efficiency Resource Availability - Quality manpower 818availability, infrastructure improvements, and raw material availability 819Effective cost controls - Close relationship with supplies and goods 820distribution channels. Establishment of export markets - Growth of 821export markets Having an extensive distribution/collection network 822Goods distribution channels Successful industrial relations policy 823Ethical and tactical industrial relations Access to the latest available 824and most efficient technology and techniques - The degree of 825investment in technological improvements and product development 826Optimum capacity utilization - The level of plant utilisation 827Management of high quality assets portfolio - Understanding 828implications from Government policies

48

24

49 829

830

831

832

833

834

835

836

837

838

839

840

841 842

International Markets Analysis

843The Indian automotive industry embarked a new journey in 1991 with 844de-licensing of the sector and subsequent opening up for 100% 845foreign direct investment (FDI). Since then almost all global majors 846have set up their facilities in Indian taking the level of production from 8472 million in 1991 to over 10 million in recent years. The exports in 848automotive sector have grown on an average compound annual 849growth rate of 30% per year for the last seven years. The export 850earnings from this sector are over USD 6 billion.

50

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51 851Even with this rapid growth, the Indian automotive industrys 852contribution in global terms is very low. This is evident from the fact 853that even thought passenger and commercial vehicles have crossed 854the production figures of 2.3 million in the year 2008, yet Indias 855share is about 3.28% of world production of 70.53 million passenger 856and commercial vehicles. Indias automotive exports constitute only 857about 0.3% of global automotive trade. 858 859 860 861 862 863 864 865 866 867 868 869 870 871 872 873 874 875 876 877 878 879 880 881 882 883 884 885 886 887

Basis of 889Competition
888 890 891Competition in this industry is high. Competition in this industry is 892increasing. Automotive industry is a volume-driven industry, and 893certain critical mass is a pre-requisite for attracting the much-needed 894investment in research and development and new product design 895and development. Research and development investment is needed 896for innovations which is the lifeline for achieving and retaining 897competitiveness in the industry. This competitiveness in turn depends 898on the capacity and the speed of the industry to innovate and 52 26

53 899upgrade. The most important indices of competitiveness are 900productivity of both labour and capital. 901The concept of attaining competitiveness on the basis of low cost and 902abundant labour, favourable exchange rates, low interest rates and 903concessional duty structure is becoming inadequate and therefore, 904not sustainable. A greater emphasis is required on the development 905of the factors like innovation which can ensure competitiveness on a 906long-term basis. 907India, with a rapidly growing middle class (450 million in 2007 as per 908NCAER Report), market oriented stable economy, availability of 909trained manpower at competitive cost, fairly well developed credit 910and financing facilities and local availability of almost all the raw 911materials at a competitive cost, has emerged as one of the favourite 912investment destinations for the automotive manufacturers. These 913advantages need to be leveraged in a manner to attain the twin 914objective of ensuring availability of best quality product at lower cost 915to the consumers on the one hand and developing and assimilating 916the latest technology in the industry on the other hand. 917As per Automotive Mission Plan 20062016 (2008), the Indian 918Government recognises its role as a catalyst and facilitator to 919encourage the companies to move to higher level of competitive 920performance. The Indian Government wants to create a policy 921environment to help companies gain competitive advantage. The 922government aims that with its policies its encourage growth, promote 923domestic competition and stimulate innovation 924

925 926 927 928 929

Key Competitors Tata Motors

930Market Share: Commercial Vehicles 63.94%, Passenger Vehicles 93116.45% 932Tata Motors Limited is Indias largest automobile company, with 933consolidated revenues of USD 14 billion in 2008-09. It is the leader in 934commercial vehicles and among the top three in passenger vehicles. 935Tata Motors has winning products in the compact, midsize car and 936utility vehicle segments. The company is the world's fourth largest 54 27

55 937truck manufacturer, and the world's second largest bus manufacture 938with over 24,000 employees. Since first rolled out in 1954, Tata 939Motors as has produced and sold over 4 million vehicles in India. 940Tata Motors is the first company from India's engineering sector to be 941listed in the New York Stock Exchange (September 2004), has also 942emerged as an international automobile company. Through 943subsidiaries and associate companies, Tata Motors has operations in 944the United Kingdom, South Korea, Thailand and Spain. Among them 945is Jaguar Land Rover, a business comprising the two British brands 946which was acquired in 2008. In 2004, it acquired the Daewoo 947Commercial Vehicles Company, South Korea's second largest truck 948maker. The rechristened Tata Daewoo Commercial Vehicles 949Company has launched several new products in the Korean market, 950while also exporting these products to several international markets. 951Today two-thirds of heavy commercial vehicle exports out of South 952Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% 953stake in Hispano Carrocera, a reputed Spanish bus and coach 954manufacturer, and subsequently the remaining stake in 2009. 955Hispano's presence is being expanded in other markets. 956In January 2008, Tata Motors unveiled its People's Car, the Tata 957Nano, a development which signifies a first for the global automobile 958industry. Nano brings the comfort and safety of a car within the reach 959of thousands of families. The standard version has been priced at 960USD 2,200 or Rs.100,000 (excluding VAT and transportation cost). 961The Tata Nano has been subsequently launched as planned, in India 962in March 2009 963 964 965 966 967 968Market Share: Passenger Vehicles 46.07% 969Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation 970of Japan, is India's largest passenger car company, accounting for 971over 45% of the domestic car market. The company offers a 972complete range of cars from entry level Maruti-800 and Alto, to stylish 56 28

Maruti Suzuki India

57 973hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, 974SX4 and Sports Utility vehicle Grand Vitara. 975Since inception in 1983, Maruti Suzuki India has produced and sold 976over 10 million vehicles in India and exported over 500,000 units to 977Europe and other countries. The companys revenue for the fiscal 9782010-2011 stood over Rs 375,224 million and Profits After Tax at over 979Rs. 22,886 million 980 981 982 983 984 985 986 987 988 989 990Market Share: Passenger Vehicles 14.15% 991Hyundai Motor India Limited is a wholly owned subsidiary of worlds 992fifth largest automobile company, Hyundai Motor Company, South 993Korea, and is the largest passenger car exporter. Hyundai Motor 994presently markets 49 variants of passenger cars across segments. 995These includes the Santro in the B segment, the i10, the premium 996hatchback i20 in the B+ segment, the Accent and the Verna in the C 997segment, the Sonata Transform in the E segment. 998Hyundai Motor, continuing its tradition of being the fastest growing 999passenger car manufacturer, registered total sales of 559,880 1000vehicles in the year 2009, an increase of 14.4% over 2008. In the 1001domestic market it clocked a growth of 18.1% as compared to 2008 58 29

Hyundai Motor India

59 1002with 289,863 units, while overseas sales grew by 10.7%, with export 1003of 270,017 units. Hyundai Motor currently exports cars to more than 1004110 countries across European Union, Africa, Middle East, Latin 1005America and Asia. It has been the number one exporter of passenger 1006car of the country for the sixth year in a row. 1007In a little over a decade since Hyundai has been present in India, it 1008has become the leading exporter of passenger cars with a market 1009share of 66% of the total exports of passenger cars from India, 1010making it a significant contributor to the Indian automobile industry. In 10112009, in spite of a global slowdown, Hyundai Motor Indias exports 1012grew by 10.7%.In 2010 Hyundai plans to add 10 new markets with 1013Australia being the latest entrant to the list. The first shipment to 1014Australia is of 500 units of the i20 and the total i20 exports to 1015Australia are expected to be in the region of 15,000 per annum. 1016 1017 1018 1019 1020 1021 1022 1023

Mahindra & Mahindra

1024Market Share: Commercial Vehicles 10.01%, Passenger Vehicles 10256.50%, Three Wheelers 1.31% 8269456746 1026Mahindra & Mahindra is mainly engaged in the Multi Utility Vehicle 1027and Three Wheeler segments directly. The company competes in the 1028Light Commercial Vehicle segment through its joint venture 1029subsidiary Mahindra Navistar Automotive Limited and in the 1030passenger car segment through another joint venture subsidiary 1031Mahindra Renault. In the year 2009, on the domestic sales front, the 1032Company along with its subsidiaries sold a total of 220,213 vehicles 1033(including 44,533 three wheelers, 8,603 Light Commercial Vehicles 1034through Mahindra Navistar Auto motives and 13,423 cars through 1035Mahindra Renault), recording a growth of 0.6% over the previous 1036year. 60 30

61 1037The companys domestic Multi Utility Vehicle sales volumes 1038increased by 3.3%, as against a decline of 7.4% for industry Multi 1039Utility Vehicle sales. A record number of 153,653 Multi Utility Vehicles 1040were sold in the domestic market in 2009 compared to 148,761 1041MUVs in the previous year.Hence, Mahindra & Mahindra further 1042strengthened its domination of the domestic Multi Utility Vehicle sub1043segment during the year, increasing its market share to 57.2% over 1044the previous years market share of 51.3%. 1045Mahindra & Mahindra is expanding its footprint in the overseas 1046market. In 2009 the Xylo was launched in South Africa. The company 1047formed a new joint venture Mahindra Automotive Australia Pty. 1048Limited, to focus on the Australian Market. 1049 1050 1051 1052 1053 1054 1055 1056 1057 1058 1059

1Introduction 1.1 Report Purpose & Context

1060This report details the results of a survey on The Factors affecting 1061selection of a car. It forms part of the Marketing Stream work, 1062which aims to understand consumer needs and behaviour in terms of 1063the reconfiguration of the new car supply system as a result of a 1064move towards shorter order lead times, build-to-order and customer 1065pull. 1066The report is divided into sections covering research methodology, 1067analysis of results and conclusions. 62 31

63 1068 1069 1070 1071 1072 1073 1074 1075 1076 1077 1078

study

Scope of the

Our research can be further used for following studies 1. The data can be used for further studies in car buying behavior in various price segment 2. The factors which are having high impact on the selection of the car can be proved useful for the manufacturer for assessing there weakness. and those features will be added by the manufacturer in there product.

1079 1080 1081 1082 1083

OBJECTIVES FOR STUDY

1084 1085The overall aims of the project were to assess the nature of demand 1086for short lead times for new cars, and to provide a reliable 1087understanding of private new car buyers behaviour and attitudes, 1088particularly in relation to the length of time that is taken in the various 1089stages of the new car buying process. It also aimed to quantify a 1090number of important aspects of the buying process, including: 1091 1092

To study the various factors which affect the To analyze the key components like customer taste and preferences.

1093buying behavior of car. 1094 1095 1096 1097Key 1098 1099 1100 64

factors ;

Price of the car, Reliability of the brand, Family needs,

32

65 1101 1102 1103 1104 1105 1106 1107 1108 1109 1110 1111 1112 1113 1114 1115 1116 1117The sources of data include either secondary data or primary data 1118and even some times the combination of both. The present study is 1119more concentration on both primary and secondary data. 1120 1121 1122

Income level, Instalment payment facility, Safety, After sales service, Car interior, Free servicing etc.

2 Methodology Data sources:

Primary data:
Primary data is collected through face-to face interaction with

1123employees of showrooms & customers by meeting them in person. 1124 1125 The secondary data used for their study are inclusive of the 1126data collected from the internet, catalogues and brochures and 1127magazines. 1128 1129

Secondary data:

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67 1130 1131 1132 1133 1134 1135 1136 1137 1138 1139 1140 1141 1142 1143 1144 1145

2.1 Research Approach

1146 1147Around 70 self-completion questionnaires were filled by recent new 1148car buyers, over 5 days. Access to the buyers was obtained, 1149 1150The questionnaire contained 15 questions, most of which required a 1151tick box for the respondents answers. I used (convenient 1152sampling)Non probability sampling. 1153 1154The difference between nonprobability and probability sampling is 1155that nonprobability sampling does not involve random selection and 1156probability sampling does. Does that mean that nonprobability 1157samples aren't representative of the population? Not necessarily. But 1158it does mean that nonprobability samples cannot depend upon the 1159rationale of probability theory. At least with a probabilistic sample, I 1160know the odds or probability that we have represented the population 1161well. I am able to estimate confidence intervals for the statistic. With 1162nonprobability samples, one may or may not represent the 1163population well, and it will often be hard for us to know how well 1164one've done so. In general, researchers prefer probabilistic or 1165random sampling methods over no probabilistic ones, and consider 1166them to be more accurate and rigorous. However, in applied social 1167research there may be circumstances where it is not feasible, 68 34

69 1168practical or theoretically sensible to do random sampling. Here, we 1169consider a wide range of no probabilistic alternatives. 1170 1171 1172Nonprobability sampling methods can be divided into two broad 1173types: accidental or purposive. Most sampling methods are purposive 1174in nature because one usually approach the sampling problem with a 1175specific plan in mind. The most important distinctions among these 1176types of sampling methods are the ones between the different types 1177of purposive sampling approaches. 1178 1179 1180 1181 1182 1183 1184 1185 1186 1187 1188 1189 1190 1191

2.2 Respondent Profile

The study is based on primary data collection with a sample size of 70 respondents residing in Indore. We have taken the sample size different gender, age group, & occupation.

1192 1193The profile of survey respondents in terms of age, region and sex is 1194indicated below.

70

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1195 1196Findings1197Out of 70 respondent 44%of the respondent were under 25 years , 1198about 12% respondent belong to the age group 25 to 35 years and 119944% respondents were under 36 to 55 years. 1200 1201 1202 1203 1204 1205 1206

Data analysis

1207 The data analysis is done using SPSS Software factor 1208analysis was performed to identify the key factors affecting selection 1209of car provided by different car manufacturing companies. 1210 1211The analysis part is performed on the rejoinders obtained on the filled 1212questionnaire by 70 respondent .The response obtained was 1213essentially tabulated and then the operation were performed with the 1214help of SPSS software, the data was further analyzed and each 1215question response is revealed in a graphical form so as to provide at 1216a glance understanding of the result obtained as ,the responses are 1217the most vital part in the research work . 1218 1219

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73 1220 1221 1222 1223 1224 1225 1226 1227 1228 1229 1230 1231

3 Research Results
3.1 Information Sources Used

1232 1233Respondents were asked to record the information sources they had 1234used to find out about the car they bought and others considered. 1235Ten different sources were listed, and they were able to tick as many 1236as appropriate. The chart below details the responses. 1237 1238 1239 1240 1241Respondents were also asked to select the 3 most important sources 1242to them, and by assigning a value to each (3 for the most important, 2 1243for the second most important etc.), total scores were obtained 1244showing the four most important sources, namely TV advertisement, 1245car magazine TVprogrammes and Friends relatives, colleagues. 1246 1247Analysing information sources by age of respondent, young owners 1248(<25 years) had a particularly high propensity to friends and 1249relatives, the TV (advertisements & programmes), and the web. The 1250highest users of the web were those aged 25 to 35, who were also 1251more likely to use TV programmes as a source. Those aged over 55 1252had no particular predispositions to use or not use particular sources, 1253except the web, where there was very low usage, and they were less 1254likely to use the TV as an information source. 1255

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75 1256 3.1 The first question needed to be answered 1257 1258

by the Respondent was What new car did u buy?

1% 5 3% 0 S IT W F I1 -0 S NR A TO 3% 5 1% 0 AT LO 1% 0 M RT A UI

1259 1260 1261Finding-About 35% of the respondent bought home Alto as 1262their new car after it the second highest i.e 30% of the 1263respondent bought Swift ,simultaneously 15% of the 1264respondent purchased Maruti and 10% of the respondent 1265purchased I-10& Santro.Alto still stood to be the most liked 1266and budget car for the respondent approached. 1267 1268 1269 1270 1271 1272 3.2 Priliminary Information source while buying a car 1273Which of the following information sources did you 1274used to find out almost the car you bought and others
T V a v r is mn d et e e t N w pp ra d e s ae d Fie d& e t r n s R laiv e s I tre nen t

1275considered. 1276 1277 1278Finding1279The daily News paper advertisement proved to be the most 1280effective ganing the maximum 60% YES from the 1281respondents the ordinal place been occupied by TV 1282advertisement and then came internet and friends and 1283relative.Hence the News paper advertisements are taken to 1284be most accepted information source.

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77 1285 1286 1287 1288 1289 1290 1291 1292 1293 1294 1295 1296 1297

3.3 Length of Time from Decision to Order

1298Respondents were asked to state the length of time between their 1299initial decision to buy a car and placing the order at the dealer. 1300Four options were given, and the results are shown below: 1301(a) Less than two weeks 1302(b) Two weeks to one month 1303(c) One month to three month 1304(d) More than three month 1305 1306
2% 5 1% 5 L s t a t ow e s es h n w e k T ow e s oo emnh w e kt n o t O emnh ot r emnh n o t t he o t M r t a t r emnh oe h n he o t 2% 0 4% 0

1307 1308Findings1309While some 40%of all respondents took up to Two weeks 1310to 1 month to make the order at the dealers, as the chart 1311above indicates. 1312 1313Buyers were more likely to have more than three weeks for their 1314initial deliberation to placing order while 20% of buyers took more 1315than three month time very few buyers took less than two week.

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79 1316 1317 1318

3.4Impor tance of Waiting Time

1319 1320Respondents were asked how important waiting time was to their 1321choice of vehicle, with the results shown below: 1322
1% 0 0 %

3% 5

5% 5

V r I p ra t ey mot n Q it I p ra t u e mot n N tV r I p ra t o ey mot n N ta a I p ra t o t ll mot n

1323 1324 1325Finding1326Around 55% of respondents said that waiting time is very important 1327for them , though there were some differences among different age 1328groups. Younger buyers under 25 were far more likely to say this 1329was very important, while there was little variation from the norm 1330among other age groups. About 35% said it was quite important. 1331Only 10% buyers said that it is not very important for them. 1332 1333

80

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81 1334 1335 1336 1337 1338 1339 1340 1341 1342 1343 1344 1345 1346 1347 1348 1349 1350 1351 1352 1353 1354 1355 1356 1357 1358 1359 1360 1361 1362 82 41

83 1363 1364

3.5 Time fr om Placing Or der to Taking Deliver y

1365 1366Respondents were asked to indicate the length of time from placing 1367their order to taking delivery of their car. The results for the total 1368sample are shown below: 1369
0 % 1% 5 0 % L st a 2 e k es h n w e 2 e k1 o t We - M nh 1 o t - M nh M nh3 o t 3 o t o Mr M nh r oe 8% 5

1370 1371 1372Finding1373In utmost 85% of cases it took 2 weeks to 1 month from initial placing 1374an order to getting final delivery of the car and a minimum of 15% 1375answered that a maximum of 1 month to 3 month of time was taken.A 1376considerably long time span i.e 2 week to 1Month is taken by the 1377delaers which needed to be worked out. 1378 1379 1380 3.7 Alter native specifications initiall y the 1381

buyer had in mind

0 % 1% 4 0 % Cl u oo r E g eT p ni n ye I t ro o to nei r pi n Bd Sa e o y hp Et ro o to xei r pi n

5% 3 3% 3

1382 1383Findings1384considering the alternative specification that respondent 1385mostly focuses about 53% were with opinion that colour 1386matters to them a lot while the other two rated factors are 1387engine type and interior option.Providing an idea that in 84 42

85 1388alternative specification colour is the most crucial factor 1389well thought-out. 1390 1391 1392 1393 1394 1395

3.7 T he Means of or der confir mation

1396Responded where asked the way they confirmed their final 1397order and provided them with four different option through 1398which order confirmation can be dealt with 1399

I Pro n es n B Po e y hn B Fx ya B Ps y ot

1400 1401 1402Finding1403When placing the final conformation for car 100% of 1404respondent belived in placing the order in person.As it 1405provide them with a sense of satisfaction and 1406assurance,hence in this case a similar view was put forward 1407by one and all.

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87 1408 1409 1410 1411 1412 1413 1414 1415 1416 1417 3.9Timing of New Car Or der and Deliver y 1418Respondent where asked about their expectation of Day of 1419Order & Collection of their prospective car 1420 1421

Ut 1 e k po w e 12 e k - we 23 e k - we 34 e k - we

1422 1423 1424 1425 1426 1427 1428 1429 1430 1431 1432 Finding1433 1434 1435A maximum of 60% of respondent expects their car delivery in the 1436very 1st week of ordering it, and the least 6% respondent said that 1437the expect their car delivery in 3 to 4 week of ordering it. Hence it 1438could be estimated that the consumer now prefer a quicker delivery 1439after ordering their car. 88 44

89 1440 1441 1442 1443 1444 1445 1446 1447 1448 1449 1450 1451 1452 1453 1454 1455 1456 1457 1458 1459 1460 1461 1462 1463 1464 1465 1466 1467 90 45 The scope was limited as we have considered a specific area with small sample size. With non probability samples we may or may not represent the population well and it was often hard for us to know how well we have done. Since we have considered non probability sampling, therefore we have not taken random sample.

LIMITATIONS.

91 1468 1469 1470 1471 1472 1473 1474

4 Recommendations

1475 1476As already visible from the data that the maximum user for small car 1477 is generation 1478x that is the people who belong to the age group of below 25 so the 1479 carmanufacturing must target these age group with more 1480 schemes which will focus on these target group 1481 The offers may be like 1482 1. Low Emi, Easy car finance and Financial assistance to the 1483 customers 1484 1485 2. Companies must also run the awareness programme so that 1486 the consumer get acquainted with alternative specification like 1487 colour ,engine size type, interior options(seat, material). 1488 1489 3. Formalities should be cut down. 1490 1491 4. Time should be less between orders to delivery. 1492 1493 5. Companies should emphasis more on after sales services. 1494 1495 6. Availability of cars in stock. 1496 1497 7. Various offers like seat covers, scratch cards. 1498 1499 8. Fuel efficient models. 1500 1501 1502 1503 1504 92 46

93 1505 1506

5 Conclusions

1507 1508With over 70 new car buyers surveyed, the results can be considered 1509robust and a good indicator of private new car buyer behaviour. 1510In terms of information sources used by the new car buyer, the 1511results indicate that the dealer still has an important role in supplying 1512facts and figures to the public. Friends and Relatives are also relied 1513upon for advice, especially by younger buyers. While in absolute 1514terms the Internet has a minor role, this is clearly a dynamic situation, 1515and the almost 8% who claim to have used it as an information 1516source has probably grown quickly from a low base, and may 1517increase significantly in the future, as household Internet penetration 1518grows and especially as it was used particularly more by younger 1519car buyers. 1520The results indicate that there is a surprisingly short time spent on 1521making the purchase decision for volume cars, with 29% of buyers 1522taking less than 2 weeks from their initial decision to buy to placing 1523an order. One could surmise that a more expensive purchase 1524involves greater search, more consideration over choice of options, 1525and possibly more complex financing arrangements so the whole 1526process is elongated. Overall. However, the results are consistent 1527with the notion of consumers move quickly to the choice, which they 1528want gratified as soon as possible. 1529 1530The current system manages to provide a new car within 1 month to 1531around three quarters of all buyers, with nearly 29% getting their car 1532in less than 2 weeks. 1533Waiting time is important to choice of car, with around two thirds of 1534respondents saying it was important to some extent. Younger buyers 1535have a particularly propensity to state this. 1536 1537The present system is an almost 2 week car system for around 153840%, while nearly 80% get their vehicle within a month. However, the 1539rapid delivery figure is largely achieved through stock purchases. 1540 1541Almost a quarter of all buyers accept an alternative model to that they 1542initially wanted, indicating that the need to have a new car quickly 1543outweighs other preferences. In total, around one eighth said they 1544received some material benefit as compensation for their 1545compromise, which it could be argued manifest themselves as 1546increased costs, lost margins or reduced profitability 1547 1548A strong theme running through the results is the difference in 1549attitudes and behaviour of younger new car buyers, who consistently 1550have significant differences in behaviour and expectations. They use 1551information technology more, are generally less patient and the 1552consumer group most likely to demand instant gratification from 94 47

95 1553suppliers. They are the natural consumers, who will arguably take 1554these buying characteristics with them as they age. 1555 1556Differences between specialist and volume buyers are another 1557important theme in the analysis, with specialist buyers being 1558prepared to wait longer for their vehicles a particular factor. After all, it 1559is a more considered purchase, and there is an apparent 1560 1561 1562relationship between quality and time, which suggests that 1563consumers actually expect higher cost (and quality) cars to take 1564longer to build. The technical reality is that there is no discernible 1565difference between the two types of vehicle, though it appears that 1566new car marketing actually exploits this belief. This may be material 1567in the marketing and communication of the concept to specialist 1568buyers, who will in effect be asked to discount their traditional 1569beliefs about time and quality. The proposition of high(er) quality 1570low(er) cost short(er) lead time will appear counter intuitive to 1571some. 1572 1573 1574 1575 1576 1577 1578 1579 1580 1581 1582 1583 1584 1585 1586

Reference Bibliography
48

1587 96

97 1588 1589 1590 1591 1592 1593 1594 1595 1596 1597 1598 1599 1600 1601 1602 1603 1604 1605 1606 1607 1608 1609 1610 1611 1612 1613 1614 1615 1616 1617 1618 1619 1620 1621 1622 1623 1624 1625 1626 1627 1628 1629 1. Kothari C R ,Research Methodology, Published by New Age international publisher, 2nd edition, New Delhi, 2009. 2. Kotler Philip, Keller Kevin Lane, Koshy Abraham, Jha Mithileshwar , Marketing management 13th edition Published by Dorling Kindersly (india) Pvt.Ltd.

Webliography
http://www.scribd.com/doc/8190161/Car-Buying-Behavior http://findarticles.com/p/articles/mi_hb3250/is_n1_v28/ai_n286 45143/http://www.carautosmarket.com/key_factors.htmlpg_2/? tag=content;col1 http://www.automonitor.co.in/article/Customer-preferenceskewed-towards-buying-a-mid-sized-car/page2.html

Questionnaire

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1631 1632Name:-................................................................................... 1633.... 1634 1635Mobile:-.................................................................................. 1636.... 1637 102 51

103 1638Email.id:-............................................................................... 1639.... 1640 1641Address:-............................................................................... 1642..... 1643

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