Chapter 2. Classification of Automobile. Parameters of Competition. Brands and its segmentation. Global Companies A snap shot

Transcription

1 Chapter 2 AUTO INDUSTRY: TRENDS AND TRANSFORMATIONS Contents Page No. Introduction Classification of Automobile Parameters of Competition Brands and its segmentation Global Companies A snap shot Foreign Players in the Emerging small Car Manufacturing sector Foreign Automotive Companies in India : 105 Vehicles Manufactured/ Assembled in India Auto Industry : The Small Segment Car Maruti and Tata to be major competitors in the small car segment in India Indian Automotive Companies and Brands Automobile Dealers in Aurangabad Automobile Dealers in Pune Car Insurance Definitions of Insurance 1) Functional Definition 2) Contractual Definition Kinds of Insurance

2 1) Life Insurance 2) General Insurance 3) Social Insurance Kinds of Policies 1) Act Policy 2) Third Party Insurance 3) Comprehensive Policy Top Ten Car Insurance Companies in India References

3 CHAPTER 2 AUTO INDUSTRY: TRENDS AND TRANSFORMATIONS Introduction: The global market has witnessed enormous changes in automotive marketing. The cars have undergone tremendous change over a period of past two decades. The automotive products have become technology intensive and customer oriented. The market has witnessed change from a buyer s market to seller s market. Marketing researches have kept pace with the changing scenario and enormous work has been undertaken by researchers in form of continuous research into studying the consumer buying behavior for various product categories. However, in the Indian context, only a limited amount of work has been undertaken by automotive manufacturing organizations and even this is by and large not available to public, hence there is dearth of published literature in the subject matter. India is one of the fastest growing passenger car market in the world and the second largest two wheeler manufacturer; the increased demand buoyed by India s robust economic growth. The potential for a peoples car in the emerging economics such as BRICS is enormous. While Germany, Italy and France have 400 to 600 vehicles per 1,000 populations, for China and India it is only 80 and 34 respectively 1. The facts and figures are a sign of indicationthat Indian car market has tremendous potential to grow up. 66

4 The favorable factors for the surge in demand for entry level cars are the readiness of middle class/ lower middle class segments (also known as aspirants), who have traditionally patronized twowheelers, to consider a four wheeler as a feasible option. Thanks to the reduced price barrier, coupled with an increase in disposable income a harbinger to their journey up the social ladder. Though the Indian automobile industry has been growing consistently, its contribution to the world s automobile production is still relatively low, as evident from the fact that production of passenger cars and commercial vehicles in India constitutes only 2.37 % of the world s production. Indians buy about 1.4 million cars and 8.5 million twowheelers a year 2. 67

5 Classification of Automobile: The Tree Diagram has given above on the classification of automobiles shows that there are number of automobiles moving. The automobiles are mainly divided into Passenger Vehicles and Goods Vehicles. Passenger vehicles transport human beings and Goods vehicles mainly commercial goods. Passenger vehicles are subdivided into light motor vehicles and heavy motor vehicles. There are Auto cycles or Mopeds, Scooters, Motor Cycles, Jeeps, Station Wagons, pickups and cars. The automobile Auto cycles or Mopeds, Scooters, Motor Cycles come under twowheelers. 68

6 These are convenient transport vehicles by the auto users. Considering the price, maintenance cost, space for parking, and these vehicles are more popular. Jeep, Station Wagons, Pickups, Cars are mostly preferred four wheelers by the auto users in India. All these four wheelers have different utilities. These vehicles are opted for different purposes and in different road conditions. Ofcourse all the passenger vehicles are very popular in different part of the country. Number of heavy vehicles is also used to transport the human beings. They are called as Buses and Coaches. Some buses and coaches are single deck and some of them are double decker. Single deck buses are mini buses and some are big Buses. Some coaches are deluxe and some are Air conditioned. These buses and coaches are used to transport people from one place to another. Some of them are used for local transport also. In local transport they are used to transport citizens, company employees, school and college students. Goods Vehicles have occupied number of highways and city roads. Some heavy vehicles like Trucks and Tractors trailers transport commodities in bulk quantity from one corner to another corner of the country. Some of the light goods vehicles like Delivery Vans, Light Trucks, Tempo, and ThreeWheelers are mainly used to transport the goods particularly in city and country side area.automobile has become a necessity of human life in this era. 69

7 Parameters of Competition: In any business; competition is must. There is hardly a business in the world which is free from competition. Competition is the driving factor which forces the industry/business to be update with the current happenings. Competition is the only term which has invented the term Marketing. Competition in Automobile industry is very high and it is increasing. Automotive industry is a volume driven industry and certain critical mass is a prerequisite for attracting the much needed investment in research and development and new product design and development. Investments in research and development is achieving and retaining competitiveness in the industry. This competitiveness in turn depends on the capacity and speed of the industry to innovate and upgrade. The most important indices of competitiveness are productivity of both labour and capital.to speak in general; it can be said, Innovate or die. The concept of attaining competitiveness on the basis of low cost and abundant labour, favorable exchange rates, low interest rates and concessional duty structure is becoming inadequate and therefore not sustainable. A greater emphasis is required on the development of the factors like innovation which can ensure competitiveness fora longterm basis. 70

8 India, with a rapidly growing middle class (450 million in 2007 as per NCAER Report), market oriented stable economy, availability of trained manpower at competitive cost, fairly well developed credit and financing facilities and local availability of almost all the raw materials at a competitive cost, has emerged as one of the favorable destinations for the Automotive manufacturers 3.The advantages need to be leveraged in a manner to attain the twin objective of ensuring availability of best quality product at lower cost to the consumers on the one hand and developing and assimilating the latest technology in the industry on the other hand. As per Automotive Mission Plan (2008), the Indian Government recognizes its role as a catalyst and facilitator to encourage the companies to move to higher level of competitive performance. The Indian Government wants to create a policy environment to help companies gain competitive advantage 4. The government aims that with its policies to encourage growth, promote domestic competition and stimulate innovation as it is the need of an hour. Brand and Its Segmentation: A brand is the symbol or pictorial diagram that helps in the identification of the product. The purpose of any brand is to create customers at a profit and the most valuable asset for a company is its customer s loyalty. Brand explains the way people live in the society.brand is defined as a name, term, sign, symbol, design, or some combination that identify the product of the firm. 5 A traditional definition of brand stand as, name, word, mark, 71

9 symbol, device, or a combination thereof, used to identify some product or service of one seller and to differentiate them from those of competitors. 6 From the above definition it is evident that brand plays a vital role in business. Branding is not necessary for all the products e.g. FMCG / nondurables. As the present study is of durable and luxury product particularly cars, here brand becomes much important in marketing of cars. For this purpose it is necessary to study the brands in Automobile industry. There are six segments in Indian car market: Small, Midsize, Utility, Sports, Luxury and Superb Luxury: Table No. 2.1 Segmentation of Car and its Brands A B C D Utility Luxury Alto, Santro, Zen, etc. Swift, Getz, UVA, etc. AVeo, City, SX4, Indigo, etc. Civic, Optra, Octavia, Fabia, etc. Scorpio, Safari, Tavera, etc. CClass, Laura, Teanna, etc. Superb Luxury : E Class, etc. (Source: Compiled from The Motoring November 2009.) Brand strengths and reputation are highly important in car market, and it is therefore quite difficult for new players to enter into the business. Those who are successful, often do so through the introduction of 72

10 successful foreign brands. Due to the high fixed costs in car design and manufacture, as well as the economies of scale grained from mass production, new startup companies are rare. The capital requirements for a manufacturing facility of feasible scale are high. In the wake of recent market decline, in particular General Motors and Chrysler filing their bankruptcy in 2009, new entrants are unlikely to be attracted to this struggling market. The global economic downturn had a negative impact on car sales as consumers were avoiding making expensive purchases like new cars. This fall in demand also reduces the likelihood of new entrants. However, India was unaffected by the downturn: market volume improved over with an impressive CAGR of 18.2 percent. Furthermore, market volume is forecasted to improve with a CAGR of 3.1 percent over This favorable condition makes the market attractive to new entrants, they might be deterred by India s emissions standards which apply to all new four wheel vehicles sold and registered throughout the country. Overall, threat of entry is week. Global Companies: A snap shot: The automobile industry is at a pick worldwide and it is witnessing tremendous increase. This industry is flourishing in the world. As the present study is on the marketing aspect of car; it becomes significant to take a detail account as how many manufacturers exist in the world market and hence the following data will be helpful to analyze the car company and their models with their detail specifications including price in lakhs. 73

11 The following information in table form has been constructed by the researcher after referring the leaflets, brochures and user manuals of the respective Automobile companies. Similarly; this data has also been compiled from the information published in various monthly magazines on automobiles like CAR INDIA, AUTOCAR INDIA, OVERDRIVE, AUTO INDIA, BUSINESS STANDARD, THE MOTORING, etc.: Sr.No. Model Price Table No. 2.2 Manufacturers and Models AUDI Economy Version City H.W. Overall Diesel Petrol (A4) 2.0 TDI TDI Quattro A4 1.8 TFSI A4 2.0 TFSI TFSI quartao (A6) 2.7 TDI TDI FSI TFSI (A8) 3.0 TDI FSI (Q5) 3.0 TDI TFSI (Q7) 3.0 TDI quattrao FSI quattrao FSI quattrao 67 (R8) 4.2 FSI quattrao 120 FSI quattrao R tronic 120 (TT) 3.2 FSI quattrao

12 BNETLEY Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Arnage) Arnage R Arnage RL (Continental GT) GT GTC (Continental) Flying Spur BMW Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (3 Series) 320d d highline i i i (5 Series) 520d i d d highline (5 Series G) 530i (6 Series) 650i Coupe i Convertible (7 Series) 75

13 730Ld Li Li Li (M3) M3 Coupe 3.9 M3 Convertible (M5) M (M6) Coupe 121 Convertible (M3) xdrive25i xdrive20d (X5) xdrive25i xdrive30d (X6) xdrive50i xdrive30d (X6M) X6M (Z4) xdrive35i

14 CHEVROLET Sr.No. Model Price Economy Version 1. (Aveo) City H.W. Overall Diesel Petrol 1.4LS 1.4LT 1.4LT with ABS 1.6LT Option Pack 2. (Beat) 1.2PS 1.2LS 1.2LT 1.2LT Option Pack 3. (Captiva) Captive Captive LTZ 4. (Cruze) LT LTZ ATLTZ 5. (Optra) 1.6LS 1.6LT Magnum TCDI MAX Magnum TCDI LS Magnum TCDI LT 1.6 MAX 6. (Spark) Spark PS LS LT PS LPG LS LPG LT Option Pack 7. (Tavera)

15 78 B1 B2 Neo LS B3 Neo LS B4 Neo LT L Neo SS D (UVA) UVA LS LS Techno LT FIAT Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (500) Lounge Sports (Linea) FIRE Active FIRE Dynamic FIRE Dynamic + FIRE Emotion FIRE Emotion + Multijet Active Multijet Dynamic Multijet Dynamic + Multijet Emotion Multijet Emotion

16 (Palio) Stile 1.1 SI Stile 1.1 SL Stile 1.1 SLK Stile 1.1 SPORT 1.3 MJD SD 1. 3MJD SDE 1.3 MJD SEK (Punto) Fire Active Fire Dynamic Fire Emotion Fire Emotion Pack Multijet Active Multijet Dynamic Multijet Emotion Multijet Emotion Pack

17 FORD Sr.No. Model 1. (Endeavour) TDCi 4x2 2.5 XLT Thunder+ 4x4 2.5 Limited 4x2 2. (Fiesta) Duratec 1.4 EXi Duratec 1.6S Duratec 1.6SXi Duratec 1.6 Zxi leather Duratec 1.6ZXi Duratec1.4E Xi Duratec 1.4SXi Duratec 1.6ZXi 3. (Figo) Duratec 1.2 LXI Duratec 1.2 EXI Duratec 1.2 ZXI Titanium 1.2 Duratec 1.4 LXI Duratec 1.4 EXI Duratec 1.4 ZXI Titanium (Fusion) 1.6 Duratec Petrol 1.4 TDCI Diesel Petrol Plus with ABS Price Economy Version City H.W. Overal l Diesel Petrol 80

18 4. (Ikon) 1.3 RoCam 1.4 TDCI HONDA Sr.No. Model Price Economy Version 1. (Accord) 2.4 AT AT Elegance AT Inspire 2.4 MT MT Elegance MT Inspire 3.5 V6 3.5 V6 Inspire 2. (City) S MT S AT 3. (Civic) City H.W. Overall Diesel Petrol Civik 1.8V AT Civik 1.8V MT (CRV) CRV 2.0 CRV 2.4 CRV 2.4 AT (Jazz) 81

19 Jazz Jazz Active Jazz Mode HYUNDAI Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Accent) Executive Executive LPG (Getz) GLE 1.1 GVS 1.1 GVS 1.1 Opt. GLS 1.3 GLX GVS (i10) DLite Era Magna Kappa Magna MT Kappa Sportz MT Kappa Magna AT Kappa Sportz AT Kappa Asta MT Kappa Asta MT(Sunroof) Kappa Asta AT(Sunroof) 4. (i20) 1.2 Asta 1.2 Asta Option 1.2 Asta Option with Sunroof 1.2 Magna 1.4 Magna Diesel with ABS 1.4 Asta Diesel

20 1.4 Asta (O) with Sunroof Diesel 1.4 Asta AT Asta AT(O) with Sunroof 5. (Santro) Non A/c (solid) Non A/c (metallic) GL (solid) GL (metallic) GLS (solid) GLS (metallic) GL LPG (solid) GL LPG (metallic) GLS LPG (solid) GLS LPG (metallic) 6. (Sonata) Transform 2.0 CRDi A/T Transform 2.4 VTVT Transform 2.0 CRDi M/T (Tucson) Tucson (Verna) 1.6 VTVT 1.6 SX VTVT 1.5 CRDi VGT 1.5 SXI CRDi VGT 1.5 SX CRDi VGT AT ICML Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Rhino) RX Standard 1 RX Standard 2 RX Deluxe

21 JAGUAR Sr.No. Model 1. (XF) XF XFR Pric e City (XJ) XJ (XKR) Coupe Convertibl e Economy H.W Overal l 6.11 Version Diesel Petrol LAMBORGINI Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Gallardo) LP LP Spyder (Murcielago) LP Sr.No. LAND ROVER Model Price Economy Version City H.W. Overal l Diesel Petrol 1. (Discovery 4) 6 Diesel Automatic 2. (Freelande r 2) Freelander S

22 Freelander SE Freelander HSE 3. (Range Rover) 3.6 TSV8 V8 Petrol 4. (RR Sport) TSV 8 V8 Petrol MAHINDRA & MAHINDRA Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Bolero) SLX 2WD SLX 4WD VLX CRDe WD SLE 2WD Diz 2WD DI 2WD PLUS 2WD (Getaway) 2 WD 4 WD 3. (Scorpio) LX SLE VLX VLX AT 4. (Xylo) E2 E4 E6 E8 E8 with ABS With Airbags & ABS

23 MAHINDRA RENAULT Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Logan) 1.4 GL 1.4 GLE 1.4 GLX 1.5 DCi DLE 1.5 DCi DLS 1.5 DCi DLX 1.6 GLS 1.6 GLX MARUTI SUZUKI Sr.No. Model 1. (800) STD LPG LPG A/C MPI (Limited Edition) MPI STD MPI A/C 2. (Alto) STD (BS3) LX (BS3) LXi (BS3) Xcite 3. (Astar) LXi VXi ZXi 4. (Eeco) Pric e Economy City H.W. Overal l Version Diesel Petrol 86

24 5 Seater 5 Seater with A/C 7 Seater (Grand Vitara) AT Grand Vitara MT 6. (Gypsy) Soft Top Hard Top Ambulanc e (Hard Top) 7. (Omni) MPI STD 8 seater MPI STD 5 seater MPI Ambulanc e MPI Cargo BSIII LPG STD 5 seater LPG Cargo BSIII 8. (Ritz) Lxi Vxi Vxi(ABS) Zxi Ldi Vdi Vdi(ABS) 8. (Swift Dzire) Lxi Vxi

25 Zxi Ldi Vdi Zdi 9. (SX4) Vxi MT Zxi MT Zxi with leather MT Zxi AT Zxi with leather AT 10. (Wagon R) LX (BS3) LXi (BS3) VXi (BS3) VXi (BS3) with ABS AX (BS3) Duo LX (BS3) Duo LXi (BS3) 11. (Zen Estilo) LX LXi VXi VXi with ABS Sr.N o. MERCEDESBENZ Model Price Economy Version City H.W. Overa ll Diesel Petrol 1. (CClass) C200 K Elegance C

26 Avantgarde C220 CDi Elegance C220 CDiAvantgar de C63 AMG 2. (CL) CL500 CL600 CL63 AMG CL 65 AMG 3. (CLS) CLS 320 CDI CLS 500 CLS63 AMG 4. (EClass) E350 E 350 CDI E 250 E 250 CDi (GL) GL 350 CDI (ML Class) ML 350 ML 350 CDI 7. (S Class) S350 L S350 CDI L S500 L S600 L S63 AMG L S65 AMG L S63 AMG S Guard 8. (SLK) SLK 200 K SLK

27 SLK55 AMG (SL) SL 350 SL 500 SL 600 SL63 AMG SL65 AMG Sr.No. MITSUBISHI Model Price Economy Version City H.W. Overal l Diesel Petrol 1. (Cedia) Sports (Lancer) LXI BS2 LXI BS3 LXd BS2 LXd BS3 3. (Montero) AT MT (Outlander ) Outlander (Pajero) Pajero SFX

28 NISSAN Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (370Z) 370Z MT 370Z AT 2. (Teana) 250XL 250XV 3. (XTrail) LE SLX MT SLX AT Sr.No. 1. (911) 911 Carrera 911 Carrera S 911 Carrera Cabriolet 911 Carrera PORSCHE Model Price Economy Version City H.W. Overa ll Diesel Petrol S Cabriolet 911 Carrera Carrera 4S 911 Carrera 4 Cabriolet 911 Carrera 4S Cabriolet 911 Targa Targa 4 S

29 911 Turbo 911 Turbo Cabriolet 911 GT2 911 GT3 2. (Boxter) Boxter Boxter S 3. (Cayman) Cayman Cayman S 4. (Cayenne) Cayenne Cayenne S Cayenne S Transsyberi a Cayenne GTS Cayenne GTS PD Edition 3 Cayenne Turbo Cayenne Turbo S 5. (Panamera ) Panamera S Panamera 4S Panamera Turbo

30 PREMIER Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Rio) Dx 5.74 Ex 5.48 Lx 6.31 ROLLS ROYCE Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (Ghost) Ghost (Phantom) Phantom SKODA Sr.No. Model 1. (Fabia) 1.2 MPI Active 1.2 MPI Ambiente 1.2 MPI Classic 1.4 PD TDI Active 1.4 PD TDI Ambiente 1.4 PD TDI Classic 1.4 PD TDI Pric e City Economy H.W Overa ll Version Diesel Petrol 93

31 Elegance 2. (Laura) 1.8 TSI 1.9 Ambinete MT 1.9 Ambinete AT 1.9 Elegance MT 1.9 Elegance AT 2.0 Laura L&K AT 3. (Octavia) Ambiente 1.9 TDI Ambiente 1.8 TPI Elegance TDI L&K TDI 4. (Superb) TSI (A) 2.0 TDI PD (A) 3.6 V6 FSI 4x4 (A)

32 TATA Sr.N o. Model 1. (Indica) DLE BS II DLE BS III DLS BS II DLS BS III Xeta GL Xeta GLE(P) Xeta GLS(P) Xeta GLE LPG Xeta GLS LPG Xeta GLS Sports Pric e City Economy H.W Overa ll Version Diesel Petrol 2. (Indica Vista) Terra QUADRAJET Terra SAFIRE Terra TDI Aqua SAFIRE Aura SAFIRE Aqua TDI Aqua QUADRAJET Aura Quadrajet 3. (Indigo) GLS(P) GLX(P) LS(Dicor) LS TDI LX TDI XL Classic (DICOR) XL Grande (DICOR) Indigo CS GLE Petrol Indigo CS GLE

33 Petrol Indigo CS LS Petrol Indigo CS GLX Petrol Indigo CS LS TDI Indigo CS LE TDI Indigo CS LS Dicor Indigo CS LX Dicor Indigo CS LX TDI (Indigo Marina) GLS (Petrol) GLX Petrol GLE (Petrol) LS TDI LX (DICOR) LX TDI (Indigo Manza) Aqua Safire Aura Safire Aura Safire (ABS) Aura + Safire Aqua Quadrajet Aura Quadrajet Aura Quadrajet(A BS) Aura + Quadrajet 6. (Nano) BS II BS III CX BS II CX BS III LX BS III

34 7. (Safari) 2.1 EXI (Petrol) 2 WD 2.1 EXI (Petrol) 4 WD 2.2 Dicor LX 2WD 2.2 Dicor VX 2WD 2.2 Dicor EX 2WD 2.2 Dicor EX 4WD 2.2 Dicor VX 4WD (Sumo Victa) LX EX GX CX 9. (Sumo Grande) Sumo Grande EX Sumo Grande GX Sumo Grande LX 10. (Xenon) EX 4x4 EX 4x

35 Sr.No. 1. (Camry) W1 (MT) W2 (AT) W3 (MT) W4 (AT) TOYOTA Model Price Economy Version City H.W. Overal l Diesel Petrol (Corolla Altis) 1.8J 1.8G 1.8GL 1.8VL 1.8 Sports 3. (Fortuner ) Fortuner Manual 4. (Innova) LV (Diesel) MS 8 seater EV (Diesel) MS 7 seater 2.5 EV (Diesel) PS 8 seater 2.5 EV (Diesel) PS 7 seater 2.0 G (Petrol) 8 seater

36 2.0 G (Petrol) 8 seater 2.5 GX (Diesel) 8 seater 2.5 GX(Diesel ) 7 seater 2.0 GX (Petrol) 8 seater 2.0 VX (Petrol) 8 seater 2.0 VX (Diesel) 8 seater 2.5 VX (Diesel) 7 seater CNG 8 seater 5. (Land Cruiser) 200 VX Standard 200 VX Premium (Land Cruiser Prado) Prado (Prius) Z3 Z

37 Sr.No. VOLKSWAGEN Model Price Economy Version City H.W. Overal l Diesel Petrol 1. (Beetle) Beetle (Jetta) 1.6 Trendline 1.9 Comfortlin e DSG 1.9 Trendline 3. (Passat) Passat Highline DSG 4. (Phaeton) Phaeton (Polo) Trendline (P) Comfortlin e (P) Highline (P) Trendline (D) Comfortlin e (D) Highline (D) 6. (Touareg) V6 TDI

38 VOLVO Sr.No. Model Price Economy Version City H.W. Overall Diesel Petrol 1. (S80) 2.4L D5 3.2L Petrol 4.4L V8 2. (XC90) 2.4L D5 3.2L V6 4.4L V The above tables provide full information about all the multinational and domestic brands running worldwide. The information is well equipped with the models, their brand names, price, mileage economy and versions. India, becoming global market for automobiles, all the foreign players are rushing to sell their all most all the brands in Indian market. Every car seller tries to convince its customers that their cars are not just cheap to buy but cheap to own and run too. Foreign Players in the Emerging SmallCar Manufacturing Sector: With the free trade policy of Government of India, many foreign companies who are waiting for an opportunity to enter into the Indian market, now found it suitable to do so. The reason for making India as 101

39 a target market is saturation of domestic market for small cars. There are large numbers of multinational companies who are trying their luck in Indian Market either by settingup their manufacturing units or by the way of Joint venture/assembly plants with local manufacturers. As the Government policy is favorable for foreign direct investment and the multinational companies are being offered several benefits; such as tax exemption, providing necessary infrastructural facilities at a very low cost, it has become a center of attraction for MNC s. There are some examples quoted below to get insight in the domain of the study: Nissan of Japan is now in India who ventured into the small car market by setting up a car manufacturing plant for the 1000 cc car and total production of 2 lakhs units a year is projected. Out of the total production, 30% is to be sold within the country while the rest is to be exported to Europe and other markets. Gradually Nissan would add more models in future and also expand its annual capacity up to 4,00,000 units. Two or three port cities in the West and the South have been short listed for the manufacturing sites. 8 Toyota Motor Corporation, which is set to become the world s biggest automaker, is also looking to develop a low cost passenger vehicle to boost its limited presence in India and challenge the dominance of Maruti Udyog Ltd. a unit of Suzuki. Toyota has expanded its production capacity from the existing 60,000 vehicles per year at its factory at Bidadi in Karnataka, in the wake of rising demand. Toyota has 430 acres of land at 102

40 Bidadi, only onethird of which is being utilized at present 9. Following the impressive success of Innova, the company is in the process of expanding its dealership network especially in the West and set a sales target of 4000 units per month for its multipurpose brand Innova. Automaker General Motors do not have a serious compact car in its portfolio and the open sale notwithstanding, is ready with two of them in coming days. Hyundai which has been successful with the brand Santro Xing, will complement it with another model, which will be positioned between the Santro Xing and the bigger Getz. It will also give the Getz a facelift, like the international version and add a CRDi motor too. Maruti Udyog, the biggest small car player of all, is not going to let go off its market share so easily. By closing down the previous model of Zen they added the Zen Estilo model between the Alto and the Wagan R and arerunning well in the market. It also now plans to introduce the Swift JTD with a 1300 cc diesel motor.the all new Indica of the Tata s with a commonrail diesel motor is also giving its best performance on the Indian roads. Fiat has also launched the new revised Palio in 2007 followed by Punto and Linea. Skoda Auto brought its fabulous Fabia on Indian roads. But considering the beat and competition halting up in the small car segment, every player is very keen about publicity and advertisement. Their approach and marketing strategies are very aggressive. The Mahindra Renault 103

41 combine have introduced the Logan which is affordable and have a fuel efficient diesel motor. The oldest car manufacturer Ford has introduced its Figo in the small car segment and entered into the competition. The Figocar is made available in petrol and diesel version and is showing good sales performance. Due to the debate on increasing oil prices, Industry players would also launch a fresh bunch of diesel cars and not just in the compact and the entrylevel three box segments but in the midsized segments too. Chevrolet has launched the Optra diesel version in May 2007 and the MahindraScorpio has introduced a fuel efficient more powerful 2200 cc diesel motor. Tata s are always ready to provide something new to the market and introduced its all new Safari with an improved commonrail motor. The makers of the ultimate driving machine have launched the BMW 3 and 5 series in the country, with both diesel and petrol motors and automatic gearboxes. The Audi is following the same strategy. German automobile giants, Daimler and Chrysler, now independently performing their operations and introduced the all new C Class cars in the Indian market. There are other major brands like Porsches, Rolls Royce, Bentleys, Lombordinis and Ferraris too that have stepped on to the Indian soil generally catering to the rich class of car lovers. 104

42 Foreign Automotive Companies in IndiaVehicles Manufactured/ Assembled in India: India is not only a home for domestic manufactured cars, but it has attracted many foreign manufacturers. The detail list of the manufactures and their brands that have started manufacturing, assembling and marketing their different brands in India is highlighted in the following table: Table No. 2.3 Foreign Automotive Companies and their brands Sr No Companies Brands 1 BMW India 3 Series, 5 Series, X1 2 Fiat India (In collaboration with Tata Motors)Grande, Punto, Linea 3 Ford India Figo, Ikon, Fiesta, Endeavour 4 General Motor India 5 Honda Siel Chevrolet : Spark, Beat, Avea UVA,Avea, Opta, Cruze, Tavera Jazz, City, Civic, Accord 6 Hyundai Motor India: Santro, i10, i20, Accent, Verna Transorm,Sonata Transform 7 Land Rover Freelander 2 8 Maruti Suzuki 800, Alto, Wagon R, Estilo, AStar, Ritz,Swift, Swift Dzire, SX4, Omni, Versa, Ecco,Gypsy 9 Mercedes Benz India C Class, E Class (In collaboration with Hindustan Motors)Lancer, Lancer Cedia, 10 Mitsubishi Pajero 11 Nissan Motors India Micra 12 Renaut India Fluence 13 Toyota Kirloskar Etios, Corolla, Innova 14 Volkswagen India 15 Audi India 16 Skoda Auto India Polo, Vento, Jetta, Passat A4, A6, Q5 Fabia, Laura, Superb, Veti (Source: 105

43 From the table no. 2.3, it is clear that many MNC s have started manufacturing their popular brands in own plants and some of them have started only assembly units in India. Some other cars can be imported to India at a steep 110% import duty. Car makers such as Alfa Rumeo, A McLaren, Pagani, Cadillac, Chrysler, SSL, Zenuo, MINI, Smart, Daihatsu, Lexus, Infiniti, Acura, Saah, Spyller, Lotur, PeugeotCitroen, Mazda, are in varying stages of official introduction to the Indian Automobile Market. Auto Industry: The Small Segment Car: The Indian Automotive Industry is poised for a major boom with the government presenting the Automotive Mission Plan , to make India a Global Auto hub in the years to come. The big race for the small car segment has created tremendous interest amongst the local and global players. They are planning to make such cheap cost effective models in India, so that affordability is taken care to cater to the huge Indian masses and export marketing opportunities. There are four to five major Indian players wanting to make cars in the One Lac Indian Rupees price tag category, besides other global auto players too are eyeing India, to manufacture cars in the cheaper as well as other categories. The car manufactures of India who want to grab this opportunity is shown in the table below: 106

44 Table No. 2.4 Rs One plus lac Car Manufacturers Sr. Company Brand Status No 1 Tata Nano On road 2 Bajaj Awaited 3 Maruti 660 Awaited 4 Mahindra Reva On road (Source: AUTO INDIA, APRIL 2010) Tata has taken prestigious credit to launch a small segment car on India roads. It is NANO which is trying to prove its metal in Indian Market. Other Global Auto players are concentrating on Indian market to launch the small cars on cheaper prices. With the growing young population and increasing purchasing power of the middle class, along with India s GDP almost about to cross the double digit mark, the small car segment will see a huge potential in the coming years. If this dream comes true, it will make India a Global Auto hub for Automobile and Auto ancillary products. The reason for the tremendous potential in the small car segment is due to a huge volume market projected by industry in The Tata have projected that they will be in the capacity to manufacture 1 million small cars by Industry also expects that there will be tendency in 107

45 consumers to shift to small cars from the motorbikes and other two wheelers. Researchers feel that the Indian customers are getting increasingly conscious of status and brands and will make a perfect shift from two wheelers to the small car segment. While some two wheeler manufacturers like Hero Honda argue that the price of the car can be cheap but the fuel consumption and maintenance costs can nowhere be comparable with the twowheelers and since it is altogether a different market. It would not affect the twowheeler manufacturers at all. All said and done, if we keenly observe the psychology of the Indian middle class customers, we will come to know that they are willing to purchase small cars instead of going for two wheelers. While survey, the respondents claimed that it is always an intelligent decision to purchase a small car for Rs 1 lack, instead of purchasing a two wheeler of Rs. 70 to 80 thousands. More over the car can carry five passengers and is safer than that of two wheeler and therefore it may be an economic deal. Maruti and Tata to be major competitors in the small car segment in India: Anticipating the prospects in small car segment Maruti Suzuki too plans to compete against the Tata s small car launch in the years to come. Suzuki Motor Corporation, 54 % owner of the India s largest car maker Maruti Udyog, is developing a 660 cc engine and a new low cost small car platform from scratch, which is currently being developed under a blanket of secrecy and its headquarters in Hamamatsu in Japan. It was expected to launch by 108

46 the end of But at the same time Tata s NANO turned out to be a little higher than one lakh due to increasing raw material costs. Maruti officials also say that though their small car price won t be Rs. 1 lakh, it would be competitively priced. Bajaj Auto is concentrating their efforts on making a low cost car based on motorcycle engine. But lack of underlying engineering skills makes it tough to build reliable and durable cars. This is not the only case with Bajaj Auto but many aspirants are in queue to grab the opportunity. Indian Automotive Companies and Brands: In India there are several companies who are involved in manufacturing cars and these companies are capable to compete the multinational companies. Some of them have enjoyed a market monopoly situation, but in the age of globalization they have to compete with the MNC s. The Indian companies with their brand are depicted in the following table: 109

47 Sr No Table No. 2.5 Indian Automotive Companies and their Brands Companies 1 Hindustan Motors Ambassador Brands 2 ICML : Rhino RX 3 Mahindra & Mahindra Major, Xylo, Scorpio, Bolero, Thav, Verito, Genio 4 Premier Automobiles Ltd Sigma, Rio 5 San Motors Storm 6 Tata Motors Nano, Indica, Indica Vista, Indigo, Indigo Manza, Indigo CS, Sumo,Venture, Safari, Xenon, Avia (Source: 110

48 Table No. 2.6 Recent Car Launches in India Company Model Segment VM Q5 SUV NewA6 LowerPremium Audi New3Series Compact X6 7Series SUV Premium Fiat GrandePunto Supermini Linea Supermini Honda Jazz Supermini Mahindra Xylo MPV MarutiSuzuki AStar City Ritz City Mitsubishi Outlander SUV Skoda NewLaura Compact NewSuperb FamiySaloon TataMotors Nano City (Source: DATAMONITOR) A car buyer seeks many values from a single car. His/her purchasing decision process takes into account various current factors and as well as he /she think of the future also. Buying a car is considered as one time investment by many car buyers and for some it is for a specific period, as he will change his car in due course of time. In general maximum car buyers think of the recurring expenses that will be required for running his car. As far as the Indian customers are concern majority of them are price minded while purchasing a car and think that the car which they are using should be more fuel efficient and therefore; taking these customers into consideration the car manufacturers have introduced cars having more millage. The table no. 2.7 depicts the car manufacturers, the model of cars and the versions with brands, the millage of the cars: 111

49 Table No. 2.7 Top Ten most Fuel efficient Vehicles PETROL CARS FUEL EFFICIENCY KMPL (ARAI CLAIMED) Tata Nano Maruti Suzuki Astar 19.6 Chevrolet Beat Chevrolet Spark Chevrolet Cruze MT Maruti Suzuki Zen Estilo BS Maruti Suzuki Alto 18.1 Hyundai i Hyundai i Maruti Suzuki Ritz BS DIESEL CARS FUEL EFFICIENCY KMPL (ARAI CLAIMED) Indigo 1.4 Dicor/CS 1.4 Dicor Fiat Hyundai Verna Skoda Octavia 1.9MT Maruti Suzuki Ritz BS Mahindra Renault Logan DSL Indigo ManzaQuadrajet Swift Dzire/ Swift 21 Tata Indica Vista Quadrajet Ford Ikon 20.6 (SourceMagazine AUTOCAR INDIA Volume 11, April 2010) 112

50 Automotive Dealers in Aurangabad Aurangabad, though it is known as historical city but during the decade of 1990, it was known as fastest developing city in Asia. Along with the industrial development; education, business, construction, service sectors are also emerging as the growing opportunities for Automobile marketers. At present 16 numbers of Automobile companies have appointed their dealers along with service facilities. It includes Maruti Suzuki, Hyundai, Chevrolet, Nissan, Ford, Tata, Skoda, etc. Recently; the young entrepreneurs of Aurangabad city have proved their potentiality by purchasing 150 Mercedes cars at one stretch. Aurangabad is emerging as global market; there are great opportunities for all the global and prestigious brands in this area. The following is the list of dealers operating in the city: 1. Automotive Manufacturers, Jalna Road. (Maruti) 2. Sanya Motors, API Compound, Jalna Road. (Tata) 3. Sarra Motors, API Compound, Jalna Road. (Skoda) 4. Soham Motors, Mukundwadi, Jalna Road. (Chevrolet) 5. Shirin Nissan, Opp. Milk Dairy, Jalna Road. (Nissan) 6. Dhoot Motors, Adalat Road. (Hyundai) 7. Y.Z. Ford, Cannaught Place. (Ford) 8. Pagariya Auto, Adalat Road, Aurangabad. (Maruti) 9. Satish Motors, Adalat Road. (Tata Commercial) 10. Wasan Toyota, Aurangabad Pune Road. (Toyota) 11. Ratnaprabha Motors, MIDC Chikalthana. (Mahindra) 113

51 12. Divekar Auto, Railway Station Road. (Mitsubishi) 13. Deccan Hond, Waluj. (Honda) 14. DhootMotors, ABC Complex, Adalat Road, Aurangabad. Volkswagen. 15. A.M. Hyundai, Opp. Raj Petrol Pump, Jalna Road. (Hyundai) 16. Sharayu Motor, Aurangabad Pune Road, Waluj. (Toyota) Automobile Dealers in Pune Compared to Aurangabad, Pune city has a wider scope for all the global brands of the cars. All most all the Automobile companies have appointed their dealers in the different areas of the city. It includes all the Indian brands. The multinational companies like BMW, Mercedes, Audi, Toyota, etc. have opened their showrooms at the prime locations of the city. The Automobile market of the city is boosted by I.T., education, construction, hotel industry as well as service sector. Most of the companies have appointed 3 to 4 dealers with wellequipped service centers to meet the requirements of the car buyers. The names of the Automobile dealers along with their locations are listed below: Tata 1. Pandit Automotive Pimpari, Pune Mumbai Road. 2. Millenium Mobility Pvt. Ltd. Saffire Park, Galleria4, Wakdewadi. 3. National Auto Wheels, Suresh Complex, Hadapsar Mundhva Bypass. 114

52 Maruti 1. Ace KudalePvt. Ltd. ManjiriBudruk, Pune Solapur Highway, Haveli. 2. Chowgule Industries Pvt. Ltd. Taware Colony, Off. PuneSatara Road. 3. My Car Pune Pvt. Ltd. Near Wakad Police Chowky Wakad. 4. Sai Service Statiz Ltd. Fuqewadi, PuneMumbai Road. 5. The Kothari Wheels Viman Nagar Chowk, Ahmednagar Road. 6. Wonder Cars (P) Ltd. MIDC, Chinchwad. Ford 1. Talera Ford Gunjan Cinema Complex, Yerwada. 2. Planet Ford ShardaArcademBibwewadi Corner, Pune Satara Road. 3. Talera Ford, Talera Estate, Gut No. 2326, Pune Nagar Road. 4. Plannet Ford, 47, Royal Chambers, Plot No. 7B, Paul Road. 1. Audi Pune Audi Business Centre, SenapatiBapat Road, Shivaji Nagar. 115

53 Volkswagon 1. B.U. Bhandari Automotive Pvt. Ltd. Abhimanshree Society, Pashan Road, Pashan. 2. Vidyut Motors Pvt. Ltd. Opp. PMC Building, Shivaji Nagar. Skoda 1. Asset Auto Pvt. Ltd. Pune Nagar Highway, Wagholi. 2. Asset Auto Pvt. Ltd. Bhandarkar Road. 3. Europa Auto (Pashankar Automotive Pvt. Ltd.) Dehu Road, Bypass, Wakad. Nissan 1. Oxford Nissan Near SUS Over Bridge, Mumbai BangloreExpresss Highway, Baner. Mahindra 1. Silver Jubilee Motors Ltd. Moledina Road. 2. Sahyadri Motors Pvt. Ltd. Near Garware Bridge, Deccan Jimkhana. 3. Bora Auto Opp. Sandvik Asia Company, Old Mumbai Pune Road. 4. Vidyut Motors Pvt. Ltd. Opp. P.M.C. Building, Shivaji Nagar. 5. B.U. Bhandari Automobile Pvt. Ltd. A3, Abhiman Shree Society, Pashan Road. 116

54 Honda 1. Kothari Auto Link Pvt. Ltd. Giga Space Viman Nagar. 2. Bafna Auto Cars (I) Pvt. Ltd. Opp. Shankar Maharaj Road, Satara Road, Dhenkawadi. 3. Bafna Auto Cars (I) Pvt. Ltd. Millenium Star Building, Bund Garden Road. 4. Kothari Auto Link Survey No. 268, KatrajDehu Road Bypass, Near ChandaniChowk. BMW 1. Bavaria Motors Wellesley Road, Beside LalDeval, Comp. 1. B.U. Bhandari Motors Mercedes Baner, Mumbai Banglore Highway. Fiat 1. Pandit Automotive Pvt. Ltd. Ashok House, Tilak Road. 2. B.U. Bhandari Auto, Wakewadi, Mumbai Pune Road. 3. Pandit Automotive, Jewel of Pimpari, Opp. PCMC Building. 4. Pratham Motors (Fiat) Survey No. 104/3, Banner. Toyota 1. DSK Toyota Model Colony, Shivaji Nagar 2. Sharayu Toyota BalajiChowk, Bhosari Industrial Estate. 3. DSK Toyota, 3 S Facility, 326/2, Bawdhan (Budruk) Mumbai Bangalore Highway. 117

55 4. DSK Toyota Plot No. D & E, Survey No. 173/B, Hadapsar. Hyundai 1. Kothari Hyundai SadashivPeth, Tilak Road. 2. Garve Hyundai Mumbai Pune Highway, Wakad. 3. Kundan Hyundai ThermexChowk, Chinchwad. 4. Sanjay Hyundai Near Bajaj Garden, Mumbai Pune Road, Wakdewadi. 5. Kothari Hyundai, Show Room No.1, LilaliQuantam, Bawdhan. 6. Kothari Hyundai, Mohit Paradise, Lullanagar, Bidvewadi Road. Car Insurance: The concept of insurance was introduced in India by the British in the beginning of 19 th century. In 1818, a British firm called The Oriental Life Insurance Company was formed in Calcutta 10. The Life Insurance business was nationalized in 1956 and the General Insurance in 1973.The insurance business in India is governed by the Insurance Regulatory and Development Authority. (IRDA) It is mandatory for the vehicle owner to get his vehicle insured. 118

56 Definitions of Insurance: 1] Functional Definition: Insurance is a cooperative device to spread the loss caused by a particular risk over a number of persons, who are exposed to it and who agree to insure themselves against the risk. Thus, the insurance is (a) a cooperative device to spread the risk; (b) the system to spread the risk over a number of persons who are insured against the risk; (c) the principle to share the loss of each member of the society on the basis of probability of loss to their risk; and (d) the method to provide security against losses to be insured 11. 2] Contractual Definition: Insurance has been defined to be that in which a sum of money as a premium is paid in consideration of the insurer s incurring the risk of paying a large some upon a given contingency. The insurance, thus, is a contract whereby (a) certain sum, called premium, is charged in consideration, (b) against the said consideration, a large sum is guaranteed to be paid by the insurer who received the premium, (c) the payment will be made in a certain definite sum, i.e., the loss of the policy amount whichever may be, and (d) the payment is made only upon a contingency. More specific definition can be given as follows Insurance may be defined as a consisting one party (the insurer) agrees to pay to the other party (insurer) or his beneficiary, a certain sum upon a given contingency (the risk) against which insurance is sought