Amninder Singh Mahal

8/6/2019 Amninder Singh Mahal

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Final Project Report

On

A study of Consumer perception

of foreign and Indian automobiles

in India.

Submitted to Punjab Technical University in partial

fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION(Specialization: Mark eting)

By

Amninder Singh Mahal

Roll no. - 7065222363

2007-09

Gian Jyoti Institute of Management andTechnology

MOHALI


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CERTIFICATE

This is to certify that Amninder Singh Mahal of MBA (IVth

Semester), student of Gian Jyoti Institute of Management and

Technology, Mohali has successfully completed his project titled A

study of consumer perception of foreign and Indian automobiles in

India under my supervision. This project is an original piece of

work and has not been copied from any other source. It further

certifies that this project has not been submitted to any other

Company/ University for any other purpose.

Dated: Mrs. ParamjeetKaur(Project Guide)


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ACKNOWLEDGEMENT

This humble endeavor bears the imprint of many persons who were

in one way or the other helpful in the completion of my final

research project. I would like to take this opportunity to present my

vote of thanks to my guide who acted as lighting pillars to enlighten

my way through out this project. This project would not have been

possible without the kind assistance and guidance of many peoplewho indeed were helpful, cooperative and kind during the entire

course of my project.

The acknowledgment would not be complete without expressing my

indebtedness to my Honble Chairman Sh. J.S Bedi and I express

my sincere thanks to Mrs. Paramjeet Kaur who guided me in this

project and was the constant source of reference for me and

showed full interest at each and every step of my project.

Amninder Singh Mahal


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TABLE OF CONTENTS

CHAPTER

NO. PA RTICULARS P AGE

NO.

1. IN TRODUCTION 1-46

2. REVIEW OF LI TERATURE 47-49

3. RESEARCH METH ODOLOGY 50-52

4. ANA LY SIS 53- 62

5. CONCLUSION & RECOMM ENDATI ONS 63 -65

BIBLIOGRAPHY 66

ANNEXURE 67 -68


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Chapter 1

INTRODUCTION

Economic growth over the past decade has transferred India into an

important commercial centre with a vibrant lucrative consumer

market. In recent years, India has become an attractive competitive

and fast growing market for companies around the world. The

liberalization policy followed by India after 1991 economic reforms

has given rise to the same condition for local and foreign

businesses. These developments have significantly enhanced and

affected Indias relationship with the international business

community.

With a young and rapidly growing large population base over 40%

larger than total population of many countries, India possesses a

small, very wealthy, western- oriented upper class and a sizable

and growing middle-class of salaried workers and small businessowners who are becoming major consumers of products. Therefore

this market has attracted significant attention from multinational

companies North America, Europe and Asia. To tap this potential

market, global marketers will require a comprehensive

understanding of Indian consumers.

As per capita income continues to grow, both disposable anddomestic consumption levels will fuel demand for more imports.

After the smokes of cold war between Western world and China,

Indian Market is the lenient policies followed by his democratic

country as against restricted policies of communist country like

China. The country of origin (COO) concept has come up with age.

With the spread of globalization, the need of has come with age.

With the spread of globalization, in the need of studying the impact


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of country of origin of product on its sales has increased

tremendously. The same type of product of different countries finds

different rating by different people.

In this project, an effort has been made to find the (COO) impact on

buying behavior of people. Here the respondents are students of

various colleges (PUNJABI UNIVERSITY, PATIALA) as more and

more countries are moving to other countries, it has become

extremely important for the manufacturing companies and the

marketers to find how the inhabitants of that particular country,

perceive their product. I this way they may be able to forecast thesales of their product to greater extant. Many studies have already

been undertaken on this concept but this particular study aims to

find out the forth-coming trend of car through the youth, because

ultimately they will be the future buyers. This project will not show

interest of educated students as in the near future they will

represent the major chunk of car owners.

This future car owners have different conceptions, expectations for

different countries i.e. India, Japan, Untied States that is surely

going to effect their sales in future.

Emerging markets in Asia and Latin America led advancers.

Venezuela, Russia and India led with a gain of 44%, 26% and 20%

respectively. Firm prices in commodities such as oil, iron ore and

metals supported the advances in Brazil, Mexico and Venezuela as

well. Rising corporate profits and consumers spending supported

index in India. Taiwan and South Korea delivered negative returns

for the quarter. Chief Economist at CLSA Jim Walker believes that

going ahead 2007 is likely to be tough year for global liquidity.

However, he adds that Indias economic growth could move to 9-

10%, and that Indias current account deficit is not a worry for now.


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Following India's growing openness, the arrival of new and existing

models, easy availability of finance at relatively low rate of interest

and price discounts offered by the dealers and manufacturers all

have stirred the demand for vehicles and a strong growth of theIndian automobile industry.

The data obtained from ministry of commerce and industry, shows

high growth obtained since 2003- 04 in automobile production

continuing in the first three quarters of the 2006-07. Annual growth

was 16.0 per cent in April-December, 2006; the growth rate in

2004-05 was 15.1 per cent. The automobile industry grew at acompound annual growth rate (CAGR) of 22 per cent between 1992

and 1997.

With investment exceeding Rs. 50,000 crore, the turnover of the

automobile industry exceeded Rs. 59,518 crore in 2005-06.

Including turnover of the auto-component sector, the automotive

industry's turnover, which was above Rs. 84,000 crore in 2005-06,

is estimated to have exceeded Rs.1,00,000 crore (USD 22. 74

billion) in 2005-06.

Rush of mid sized cars:

As part of its efforts to redefine the mid sized car segment, General

Motors India has rolled out Chevrolet Aveo, the first of three new

models of this class planned in the first six months of 2006.

This new sedan to be built at the GMs manufacturing facility at

Halol, Gujarat is designed with attractive styling incorporating

modern technology for extended comfort of the passengers. Having

notched up 17-18 percent growth last year, GM India would raisethe bar of performance and exceed the exceptions of customers


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with a series of launches, besides increasing the point of sales to

emerge as a big volume player in the market, said P Balendran, vice

president, Corporate Affairs, GM India.

Addressing a press conference on the eve of Aveo launch yesterday,

he said India ranked as privileged market as only few months after

this car was introduced in Shanghai it was now made available for

Indian customers. Available in 1.4 litre and 1.6 litre engines, the

Chevrolet Aveo was a global product that incorporated latest

technology to meet he highest standards of quality, he said, It has

been re-engineered based on extensive testing across the countryto meet the specific needs of our customers as well as local driving

conditions and regulations.

A crisp and modern exterior, wide stance, long wheelbase, power-

assisted steering and a performance enhanced by the companys

Variable Geometry Induction System (VGIS), which maximized

power and fuel efficiency of the car, have been the notable features

of Aveo.

Aveo is a key driver of the global expansion of Chevrolet. Following

its introduction, it is being rolled out in more than 140 countries

around the world, including several European markets and the US,

said Balendran.

Chervolet Aveo has the concept of a small car, with big design and

its enlarged wheelbase and body height increased the space of its

interior. The company would expand dealership network form the

present 77 to 110 sales points by the end of this year, and two

spare parts distribution centres would be set up in Maharashtra and

Delhi to supplement existing two such units in Gujrat and


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Tamilnadu. We also continue with extensive localization of our

product in order to reduce the price key of components.

In the last calendar year, GM India sold 30,000 units across brandsand this year the company has targeted to sell 50,000 units? Tavera

20,000, Optra 10,000, Aveo 20,000. We will also raising our

capacity at Halol Plant form the present 65,000 units per annum to

85,000 units by the end of 2006 that would need an investment of

around Rs.100 crore. The cumulative investments in GM India till

now stood at Rs. 1,380 crore.

Expressing optimism over the growth of entry-level sedan in the

Indian market, this segment posted 17 percent growth with sales of

161,000 units and was poised to record 24 percent growth this year

with sales expected at around 2 lakh units. Out of this growth, we

have targeted to net a market share of 10 percent. In the first two

months of this calendar, the entry-level sedan had been seen 25

per cent growth, as against overall industry growth of 6 per cent

only.

As the first of three new model of Chevrolet, Aveo is the forerunner

to other two cars, namely Aveo U-VA and Optra SRV, which would

be rolled out in the next few months. Having four variants in 1.4 lire

and 1.6 litre engine options, the ex-showroom

(Chennai) price ranges from Rs.5.67 Lakh to Rs.6.98 Lakh.

P layers Pro liferate:

The most visible aspect is the number of new manufacturers and

the spread of new products available in each sub-segment.

Importantly, apart from the once ubiquitous Ambassador from

Hindustan Motors, we now have top-selling models and home-


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grown brands such as the Tata Indica and Mahindra Scorpio. The

stellar performance of these products has also, in equal measure,

contributed to the expansion of the market. These `desi' companies

are now attempting to leave their footprints in markets abroad.

From sales of less than a lakh vehicles about a decade ago to

estimate sales of 7.2 lakh cars and utility vehicles this fiscal, the

industry has made a long haul. And these numbers have not just

come from small cars, but from the whole range of cars in the mid-

size, premium mid-size and super-luxury car segments.

It is a reflection of the attractiveness of the Indian car industry that

in addition to the presence of some of the biggest names in small

car technology such as Suzuki, Hyundai and Fiat, many of the high-

profile luxury brands such as Mercedes Benz, Bentley, BMW and

now Maybach and Audi are steering into India.

Diversity and Choice:

The renaissance, so to say, in the automobile industry happened

with the throwing open of the sector to overseas manufacturers

through the wholly owned subsidiary route. The credit for expanding

the car industry and discovering the market for small cars must go

to Maruti Udyog (MUL), which launched its Maruti 800 almost 20

years ago. With the entry of multinational car manufacturers,

particularly in the premium small car and mid-size sub-segments,

the industry has acquired greater diversity and choice. It also

enabled the building up of a strong manufacturing base, which

companies are now able to leverage for developing new products.

Small Car to Domin ate:

Interestingly, the still ubiquitous Maruti 800, the small car thatrevolutionised personal four-wheeled transportation in India,


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continues to be MUL's best seller. And yet, it is being debated if it

will be able to face the future. The segment will see more entrants

and a lot more technological inputs in future. As a result, the small

car segment will also continue to witness an expansion in terms of price spreads and in terms of varied trim-level positioning.

Expansio n in Mid-Size Cars:

There is the possibility of a similar market expansion in the mid-size

car segment. Near rock bottom interest rates for car financing and

competitive market forces have ensured that the affordability factor

for mid-size cars has dramatically increased.

For the first time, since the opening up of the car industry, sales of

mid-size passenger cars have crossed the one lakh mark this fiscal

and are set to close the year at an all time high.

Contemporary Features:

The combined attractiveness of the small car and mid-size

segments of the Indian car industry and the integration of Indian

emission standards with globally accepted emission norms are also

leading to the infusion of new technologies. The initial spate of cars,

especially in the small car segment, made radial tyres, air-

conditioning, power steering and side-impact protection standard

features today.

The car industry is foreseeing the possibility of emission and safety

related features such as anti-lock braking systems, common rail

injection, airbags and tiptronic transmission becoming standard

fitment in most mid-size cars, and even some premium small cars,

of the future. The new, highly aware Indian car buyer is also likely

to drive demand for new technologies.


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Strength in P arts:

The entry of new technology and the increased focus on costs

during the last few years amongst the existing manufacturers, who

have developed a strong vendor base in India, has ensured that the

component manufacturers have also had to retool their production

capacities to match global quality standards.

A number of multinational component manufacturers such as

Delphi, Visteon and Johnson Controls did set up base in India, but

the need for global quality standards amongst the local vendors

(then Tier II and Tier III suppliers) has enabled a number of Indian

companies to become Tier I suppliers. Some of them such as Bharat

Forge and Sundram Fasteners are also aspiring to become global

players through acquisitions abroad.

Beneficial Fragmentation:

With the entry of new manufacturers, the market is likely to becomeeven more fragmented. The car industry is, however, likely to

benefit from this in the form of greater depth, diversity and

increased market discovery. After all, not many of us knew that

there was such a large latent demand for small cars, until

manufacturers such as Hyundai, Fiat and Daewoo came to India in

the late 1990s.

And, as car sales near the magical one million mark, for all those

wondering where the roads are to accommodate the explosion in

car sales, you may take solace in the fact that the US too faced a

similar scenario, a few decades ago

As part of its efforts to redefine the mid sized car segment,General Motors India has rolled out Chevrolet Aveo, the first of


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three new models of this class planned in the first six months of

2006.

This new sedan to be built at the GMs manufacturing facility atHalol, Gujarat is designed with attractive styling incorporating

modern technology for extended comfort of the passengers. Having

notched up 17-18 percent growth last year, GM India would raise

the bar of performance and exceed the exceptions of customers

with a series of launches, besides increasing the point of sales to

emerge as a big volume player in the market, said P Balendran, vice

president, Corporate Affairs, GM India.

Addressing a press conference on the eve of Aveo launch yesterday,

he said India ranked as privileged market as only few months after

this car was introduced in Shanghai it was now made available for

Indian customers. Available in 1.4 litre and 1.6 litre engines, the

Chevrolet Aveo was a global product that incorporated latest

technology to meet he highest standards of quality, he said, It has

been re-engineered based on extensive testing across the country

to meet the specific needs of our customers as well as local driving

conditions and regulations.

A crisp and modern exterior, wide stance, long wheelbase, power-

assisted steering and a performance enhanced by the companys

Variable Geometry Induction System (VGIS), which maximized

power and fuel efficiency of the car, have been the notable features

of Aveo.

Aveo is a key driver of the global expansion of Chevrolet. Following

its introduction, it is being rolled out in more than 140 countries

around the world, including several European markets and the US,

said Balendran.


14/72

Chervolet Aveo has the concept of a small car, with big design and

its enlarged wheelbase and body height increased the space of its

interior. The company would expand dealership network form the

present 77 to 110 sales points by the end of this year, and twospare parts distribution centres would be set up in Maharashtra and

Delhi to supplement existing two such units in Gujrat and

Tamilnadu. We also continue with extensive localization of our

product in order to reduce the price key of components.

In the last calendar year, GM India sold 30,000 units across brands

and this year the company has targeted to sell 50,000 units? Tavera20,000, Optra 10,000, Aveo 20,000. We will also raising our

capacity at Halol Plant form the present 65,000 units per annum to

85,000 units by the end of 2006 that would need an investment of

around Rs.100 crore. The cumulative investments in GM India till

now stood at Rs. 1,380 crore.

Expressing optimism over the growth of entry-level sedan in the

Indian market, this segment posted 17 percent growth with sales of

161,000 units and was poised to record 24 percent growth this year

with sales expected at around 2 lakh units. Out of this growth, we

have targeted to net a market share of 10 percent. In the first two

months of this calendar, the entry-level sedan had been seen 25

per cent growth, as against overall industry growth of 6 per cent

only.

As the first of three new model of Chevrolet, Aveo is the forerunner

to other two cars, namely Aveo U-VA and Optra SRV which would

be rolled out in the next few months. Having four variants in 1.4 lire

and 1.6 litre engine options, the ex-showroom (Chennai) price

ranges from Rs.5.67 Lakh to Rs.6.98 Lakh.


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Classification of Cars:

Car classification is subjective since many vehicles fall into multiple

categories. Not all car types are sold in all countries and names for

the same vehicle can differ by region. The following are commonly

used classifications

CAR CLASSIFICATI ON

AMERICAN

ENGLISH

BRITISH

ENGLISH

SEGMENT EURONCAP EXAMPLE

Microcar Microcar ,

Bubble car

- - Smart Fortwo

- City car A class Fiat Panda

Subcompact

car

Supermini B class

Supermini

Hyundai

Accent

Compact car Small

family car

C class Small

family car

Ford Focus

Mid-size car Large

family car

Volkswagen

Passat

Entry-level

luxury car

Compact

executive

car

D class Large

family car

Audi A4
http://en.wikipedia.org/wiki/American_Englishhttp://en.wikipedia.org/wiki/American_Englishhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/EuroNCAPhttp://en.wikipedia.org/wiki/Microcarhttp://en.wikipedia.org/wiki/Bubble_carhttp://en.wikipedia.org/wiki/Smart_Fortwohttp://en.wikipedia.org/wiki/City_carhttp://en.wikipedia.org/w/index.php?title=A-segment&action=edithttp://en.wikipedia.org/wiki/Fiat_Pandahttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Supermini_carhttp://en.wikipedia.org/wiki/B-segmenthttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/Compact_carhttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/C-segmenthttp://en.wikipedia.org/wiki/Ford_Focushttp://en.wikipedia.org/wiki/Mid-size_carhttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/w/index.php?title=D-segment&action=edithttp://en.wikipedia.org/wiki/Audi_A4http://en.wikipedia.org/wiki/Audi_A4http://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/w/index.php?title=D-segment&action=edithttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Mid-size_carhttp://en.wikipedia.org/wiki/Ford_Focushttp://en.wikipedia.org/wiki/C-segmenthttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/Compact_carhttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/B-segmenthttp://en.wikipedia.org/wiki/Supermini_carhttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Fiat_Pandahttp://en.wikipedia.org/w/index.php?title=A-segment&action=edithttp://en.wikipedia.org/wiki/City_carhttp://en.wikipedia.org/wiki/Smart_Fortwohttp://en.wikipedia.org/wiki/Bubble_carhttp://en.wikipedia.org/wiki/Microcarhttp://en.wikipedia.org/wiki/Microcarhttp://en.wikipedia.org/wiki/EuroNCAPhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/American_Englishhttp://en.wikipedia.org/wiki/American_English


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Full-size car Chrysler 300

Mid-size

luxury car

Executive

car

E class Executive

car

BMW 5

Series

Full-size

luxury car

Luxury car F class - Mercedes-

Benz S-Class

Sports car Sports car - - Porsche 911

Grand tourer Grand

tourer

- - Jaguar XK

Supercar Supercar - - Ferrari F50

Convertible Cabriolet - - BMW 3

Series

Roadster Roadster - Roadster BMW Z4

- Leisure

activity

vehicle

B class Peugeot

Partner

- Mini MPV B class Opel Meriva

Compact

minivan

Compact

MPV

C class

Small MPV

Mazda5
http://en.wikipedia.org/wiki/Full-size_carhttp://en.wikipedia.org/wiki/Chrysler_300http://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/w/index.php?title=E-segment&action=edithttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/w/index.php?title=F-segment&action=edithttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/wiki/Sports_carhttp://en.wikipedia.org/wiki/Porsche_911http://en.wikipedia.org/wiki/Grand_tourerhttp://en.wikipedia.org/wiki/Jaguar_XKhttp://en.wikipedia.org/wiki/Supercarhttp://en.wikipedia.org/wiki/Ferrari_F50http://en.wikipedia.org/wiki/Convertiblehttp://en.wikipedia.org/wiki/Cabriolethttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/Roadsterhttp://en.wikipedia.org/wiki/BMW_Z4http://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Mini_MPVhttp://en.wikipedia.org/wiki/Opel_Merivahttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Mazda_Premacyhttp://en.wikipedia.org/wiki/Mazda_Premacyhttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Opel_Merivahttp://en.wikipedia.org/wiki/Mini_MPVhttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/BMW_Z4http://en.wikipedia.org/wiki/Roadsterhttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/Cabriolethttp://en.wikipedia.org/wiki/Convertiblehttp://en.wikipedia.org/wiki/Ferrari_F50http://en.wikipedia.org/wiki/Supercarhttp://en.wikipedia.org/wiki/Jaguar_XKhttp://en.wikipedia.org/wiki/Grand_tourerhttp://en.wikipedia.org/wiki/Porsche_911http://en.wikipedia.org/wiki/Sports_carhttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/w/index.php?title=F-segment&action=edithttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/Chrysler_300http://en.wikipedia.org/w/index.php?title=E-segment&action=edithttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/wiki/Full-size_car


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Minivan Large MPV D class MPV Toyota

Previa

Mini SUV Mini 4x4 B class Suzuki SX4

Compact SUV Compact

4x4

C/D class

Small Off-

Roader

Honda CR-V

Mid-size

crossoverSUV

Large 4x4 E class BMW X5

Mid-size SUV E class Jeep Grand

Cherokee

Full-size SUV

Off-roader

-

Large Off-

Roader

Cadillac

Escalade

About SUV:

A sport utility vehicle , or SUV is a passenger vehicle which

combines the towing capacity of a pickup truck with the passenger-

carrying space of a minivan or station wagon . Most SUVs are

designed with a roughly square cross-section , an engine

compartment, a combined passenger and cargo compartment, and

no dedicated trunk. Most mid-size and full-size SUVs have three

rows of seats with a cargo area directly behind the last row of seats.

Compact SUVs and mini SUVs , such as the Toyota RAV4 and Suzuki

Vitara , may have five or fewer seats.
http://en.wikipedia.org/wiki/Minivanhttp://en.wikipedia.org/wiki/Large_MPVhttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Suzuki_SX4http://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Honda_CR-Vhttp://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/BMW_X5http://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Passenger_vehiclehttp://en.wikipedia.org/wiki/Towing_capacityhttp://en.wikipedia.org/wiki/Pickup_truckhttp://en.wikipedia.org/wiki/Minivanhttp://en.wikipedia.org/wiki/Station_wagonhttp://en.wikipedia.org/wiki/Cross_section_%28geometry%29http://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Toyota_RAV4http://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Toyota_RAV4http://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Cross_section_%28geometry%29http://en.wikipedia.org/wiki/Station_wagonhttp://en.wikipedia.org/wiki/Minivanhttp://en.wikipedia.org/wiki/Pickup_truckhttp://en.wikipedia.org/wiki/Towing_capacityhttp://en.wikipedia.org/wiki/Passenger_vehiclehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/BMW_X5http://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/Honda_CR-Vhttp://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Suzuki_SX4http://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Large_MPVhttp://en.wikipedia.org/wiki/Minivan


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It is known in some countries as an off-road vehicle or four-

wheel drive , often abbreviated to 4WD or 4x4 , and pronounced

"four-by-four". However, not all SUVs have four-wheel drive

capabilities (see Mazda Tribute , for example). Conversely, not all4WD passenger vehicles are SUVs (see, for example, Subaru

Impreza ).

More recently, manufacturers have responded to buyer's complaints

that SUVs "drive like trucks" and demands for "carlike ride" with a

new type of SUV. A new category, the crossover SUV uses car

design and components for lighter weight and better fuel efficiency ,but is no longer designed or recommended by the manufacturer for

off-road usage or towing.

Common Features Include:

High ride height and seating position

Utilitarian/High drag body configuration

High capacity engine

Long-travel suspension (for off road/rough road use)

High load and tow capacity

Large interior cabin space

5-7 Seats

4WD , or the ability to be equipped with 4WD

Due to consumer trends, several companies now also produce

crossover SUV models, based on a unibody architecture e.g. Toyota

RAV4. Typically, these models are lighter and more fuel efficient

than traditional SUVs. Crossover models sacrifice off road features

and load capacity for a performance/ride experience more closely
http://en.wikipedia.org/wiki/Off-road_vehiclehttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/4x4http://en.wikipedia.org/wiki/Mazda_Tributehttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Crossover_SUVhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Fuel_efficiencyhttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Unibodyhttp://en.wikipedia.org/wiki/Unibodyhttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Fuel_efficiencyhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Crossover_SUVhttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Mazda_Tributehttp://en.wikipedia.org/wiki/4x4http://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Off-road_vehicle


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matching that of a large model family car, while maintaining much

of the appearance of a traditional SUV, these crossovers are not

SUVs in the literal sense.

The I nnovator's P rescription: The Relevance of

Brand R elevance:

New P roduct Categories can Subvert Incumb ent

Brands or Give Them a New

Lease on Life.

Business revolutions once had a bit of

continuity to them. The Industrial

Revolution lasted for decades, the

postindustrial revolution had a solid 20-

year run, and even the dot-com revolution

persevered for a good five years. But

business and consumer marketers in 2004

dont seem to have even that much luxury.From beverages and snack foods to

computers and consulting, the marketplace

for nearly every product or service today is undergoing continuous

change. Consumers and corporate buyers, more mobile and better

informed than ever before, are increasingly able to get precisely

what they want when they want it, at the price theyre willing to

pay. To meet these exacting desires, new and different productsand services appear unceasingly. Entirely new categories and

subcategories come into existence almost overnight, as existing

ones change or fade.

Illustration Dan Page,

2004

To succeed in this fast-moving environment, management must pay

attention to a new and, for most, unfamiliar attribute of the

companys products, services, and brands: their relevance.


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Relevance is fundamentally different from the characteristics

conventionally associated with a brands potency. All too often, a

brand seems strong because tracking studies show that it retains a

high level of trust, esteem, perceived quality, and maybe evenperceived innovativeness. Customers remain satisfied and loyal.

However, its market share may be slipping perhaps significantly

and fewer customers, particularly new customers, are considering

it. Conventional marketing theory and practice have difficulty

explaining this paradox.

Experience and research are now showing that a brand in declineoften is in trouble not because of an intrinsic problem, but because

the product category or subcategory with which it is associated is

fading undermined, augmented, replaced, or subsumed by a

new, faster-growing category. Older brands may actually be

inappropriate for the new category.

Brand management in the past focused on achieving preference on

the basis of differentiation, benefits, and customer satisfaction

within a set of brands under consideration for a given application.

But in todays environment, unless a brand can maintain its

relevance as categories emerge, change, and fade, narrow

application preference may not be sufficient. AOL faces a relevance

challenge with seasoned Internet users in the broadband category

because of its legacy as a friendly interface for new users in thedialup category. Hardware, paint, and flooring stores have struggled

to remain relevant as The Home Depot and Lowes, with their broad

selection of products and services, have subsumed existing

categories and, in effect, created a new kind of brand.

The relevance problem is apparent in categories as soft as fashion

and as hard as manufacturing. Imagine you were an automaker

15 years ago with a leading brand in the minivan category. As the


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category of sport utility vehicles (SUVs) emerged, it attracted a

segment of buyers who previously might have considered buying a

minivan. These potential SUV buyers still respected your minivan

and believed it offered the best quality and value on the market;they may even have loved it and recommended it to friends

interested in a minivan. But because this segments changing needs

prompted its interest in an SUV, your brand, so identified with

minivans, was irrelevant to it. This may have been true even if your

company also made SUVs or had an SUV sub-brand, because

customers interested in the new category will not consider brands

that have not developed interest and credibility within thatcategory.

The challenge of brand relevance is akin to the challenge of

innovation articulated by Clayton M. Christensen in The Innovators

Dilemma : When New Technologies Cause Great Firms to fail

(Harvard Business School Press, 1997). Professor Christensen

showed how industry leaders often are caught unawares bydisruptive innovations precisely because they focus too closely on

their most profitable customers and businesses, ignoring niche

offerings for low-value subordinate segments that have the ability

to grow in strength and value. Brand managers, likewise, are often

blindsided by changing product categories precisely because they

focus too closely on the traditional attributes of brands within their

old categories. Their ultimate tragedy is to achieve brilliance increating preference and differentiation, only to have that effort

wasted because of a relevance problem.

Brand relevance is an oft-used phrase, but it generally has not

been well defined or explained. Fortunately, there is a simple model

that executives can use to assess their brands relevance, and to

evaluate emerging product categories and subcategories. After


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A distinction should be made between categories associated with a

brand and brands associated with a category. Knowing which

categories are associated with the brand is actually not very

important. The key is determining which brands are associated withthe product category or subcategory. Those are the brands that

pass the relevance test. To be relevant, a brand should at least be

recalled without aid. Simple recognition when a customer

identifies from a provided list brands associated with a particular

product category or subcategory is generally too weak a

measure. (In fact, brands with high recognition and low recall are

often termed graveyard brands.)

However prominent a brand might be, though, visibility is not

enough to keep it relevant. Thanks to the rapid pace of global

technology transfer, capital flows, and communications streams,

product categories and subcategories can come into existence and

disappear with startling speed. Because new categories can

represent strategically important threats or opportunities,marketers have to be very attentive to the forces that drive their

emergence. There are seven such dynamics.

A new product or service dimension expands the

boundaries of an existing category:

By personalizing and improving service, the Saturn and Lexusautomotive brands changed the way customers interacted with car

dealers, creating a new product subcategory that made other

brands less relevant to a segment of consumers.

In both cases, GM (Saturns owner) and Toyota (creator of Lexus)

felt that new brand names were needed to support the novel dealer

experience that in part defined the subcategory. In the yogurt

business, the eat-on-the-go trend led Yoplait to develop Go-Gurt,


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delivered in a colorful nine-inch tube designed to enhance

portability and to appeal to kids. Go-Gurt helped Yoplait forge ahead

of Danones Dannon, a brand it had trailed for decades. A new

subcategory had been created in which Dannon was not relevant.

A new product or set of products carves out a fresh

niche in an existing category:

The energy-bar market created by PowerBar ultimately fragmented

into a variety of subcategories, including those directed at specific

segments (e.g., Luna bars for women) and some possessing specific

attributes (such as the protein-associated Balance and the calorie-

control bar Pria). Each represented a subcategory for which the

original PowerBar was not relevant. New subcategories can also be

defined by new and distinct applications. Bayer Aspirin, for

example, recognized a new application heart-attack prevention

and created a subcategory with its Aspirin Regimen Bayer Adult Low

Strength 81mg, which has an enteric safety coating to preventstomach upset.

A new competitor devises a way to bundle existing

categories into a super category.

In the late 1990s, Siebel created Internet-based customer

relationship management software by pulling together a host of applications, including customer loyalty programs, customer

acquisition, call centers, customer service, customer contact, and

sales force automation. In doing so, Siebel rendered irrelevant, for

some customers, the more specialized programs of competitors.


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A new competitor repositions existing products or

services to create an original category:

Starbucks reshaped the coffee retail experience by positioning itsoutlets as the third place (after home and office) to define a

persons day. The use experience involved aroma, a break from

routine, an affordable luxury, social interaction, and some self-

expressive benefit from the appreciation of great coffee. In the

U.K., Ford positioned its Galaxy minivan in relation to first-class air

travel comfortable enough to be suitable for busy executives. By

highlighting attributes far different from those that would appeal toa buyer looking for a family vehicle, the automaker created a new

minivan subcategory.

Customer needs propel a new product category or

subcategory:

Dual trends wellness and the use of herbs and naturalsupplements have supported a huge new beverage category,

healthy refreshment beverages. It now contains a host of

subcategories, including enhanced teas, fruit drinks, soy-based

drinks, and specialty waters. The pioneer and category leader is

SoBe, which started in 1996 with SoBe Black Tea 3G with ginseng,

ginkgo, and guarna, and now has an extensive line of teas, juices,

and energy drinks.

A new technology leads the development of a

product category or su bcategory.

Asahi reshaped the Japanese beer market by introducing an

innovative brewing process that reduced body and bitterness

while increasing alcohol content. Its new product, Asahi Super Dry,had a very different taste from that of other Japanese lagers, and


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generated a new category, dry beer. As a result, Kirin, for decades

the leading brand, with a dominant 60 percent share of market,

suddenly was not relevant for the many customers attracted to the

new category. Asahis market share 8 percent when Super Drywas launched in 1986 rose continually until it took share

leadership in 1998.

A com pany exploits changing technologies to invent

a new category:

EBAY Inc. created the online auction category by envisioning a

service impossible until the advent of the World Wide Web a

national (and subsequently global) real-time auction market for

myriad types of goods, from used guitars to new houses. Although

imitators have cropped up, they have had difficulty positioning

themselves as acceptable alternatives because of eBays operational

performance, its critical mass of users, and its authenticity as the

original category leader. TiVo Inc. created a new category for hometelevision viewing by combining the personal video player, a

computer hard drive, and an electronic program guide, changing the

way people watch television. Any new entrant has to define itself

with respect to TiVo.

The Relevance Challenge:

Becoming a trend responder is within the range of most companies

abilities. L.L. Bean has evolved its brand from its original base of

hunters, fishermen, and campers to become relevant for hikers,

mountain bikers, cross-country skiers, and water-sports

enthusiasts. Fuji Film was quick to becoming a leading digital-

imaging brand with its Super CCD high-quality sensor for digital

cameras. AOL may face challenges adapting its brand to thebroadband era, but its even older corporate sibling, Time Warner,


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has managed to become a top broad brand with its Road Runner

high-speed Internet access service.

But trend responsiveness carries its own set of risks. The drive to

maintain relevance can prompt a company to chase too many

subcategories, both real and imagined, resulting in a diffused,

ineffective, and expensive strategy. Response must be guided by

serious analyses. Is the opportunity large enough to justify? Is it

defensively necessary? Is the trend real, or is it a fad is it MP3, or

merely eight-track? Does the firm have the ability to develop the

skills needed to compete? Does it have the brand assets needed?

Companies need capabilities beyond the detection and evaluation of

emerging subcategories. They require creative, powerful new

offerings; entering an emerging category without them is more

likely to waste resources than to create relevance. A brand strategy

may require developing a new brand, an endorsed brand, or a sub-

brand to carry the flag. If the necessary brand assets are not

available, they need to be built or acquired. Finally, staying relevant

in dynamic environments can require an organization to become

more outward looking, customer focused, flexible, and nimble

perhaps the toughest challenge of all.

Small Cars by Toyota:

Chennai, March 29: Toyota-Kirloskar Motor Pvt. Ltd. may enter the

small car segment around 2010, a top official of the company has

said. Talking to new men after inaugurating Toyotas 55 th dealer

show room here, ToyokikoIno, Director, Marketing Group, said here

last evening that as the companys market share in India was

increasing, it planned to increase its dealership network to 60 by

the middle of this year.


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Cities including Rajkot, Madurai, Amritsar and Bhopal would be

added to dealership network shortly. The company maintained 20

per cent share in the country in premium and luxury segment.

The response for Innova in the utility vehicle segment was

encouraging and it has captured 32 percent market share. The

executive car, Toyota Corolla has achieved a market share of 35

percent.

Dismissing reports for that the company planned to expand its

percent manufacturing facility, he said: We neither plan to expandour facility at Bangalore nor start a new facility elsewhere in the

country. He also said the company had no plans to export cars

also, though an agent had sold six units in Nepal.

Trends expected in upper class:

Chennai: Daimler Chrysler India feels that the growing number of

younger generation buyers of its cars, especially the C Class, will

help it maintain its growth this year too. The company believes that

sales in the southern region not just in Banglore, Chennai and

Hyderabad, but also in the secondary cities- will grow faster given

the dynamism in the regions economy.

Luxu ry Car Segment:Unveiling the new S-Class and the new M-class vehicles at a

Mercedes-Benz Brand Showcase when other models like the SLK,

the CLS and the Maybach were displayed.

This segment now lagged behind Thailand, where the size was

between 4,000 and 6,000 units a year, and China, where it was

almost 15,000 a year, mainly because India was slow in liberalizing.


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However, he was confident that the Indian Luxury car market too

would catch up.

BMW s entry:

On what the entry of BMW into the Indian car market meant for the

company and the luxury car segment, Dr. Aulbur expected the

market to grow. Daimler Chryslers market share, now 99 percent,

would be Slightly affected but the numbers would continue.

South Indian Annexation by Different Car

Manufacturers:

On what the entry of BMW into the India, the German based

luxury car maker, unveiled the latest edition of the Mercedes Benz

S-class and M-Class vehicles here yesterday.

The company is keen towards developing its share in the South

Indian market. Since the southern market is responsible for twenty

five percent of the sales and the two tier cities are growing fast in

this region the South Indian market is becoming important.

D.M. is committed to offer our customers to the latest products in

the least possible time. The new S-class unveiled today is parallel tothe US market launch and clearly demonstrates Daimler Chryslers

seriousness about the Indian market.

The company was growing at CAGR of 17 percent in India and has

sold 15,000 cars in the Indian market after starting its operations in

the country ten years ago.


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Daimler Chrysler has sold about 137 units this year till February and

about 2019 cars in 2005. While 35 percent of the total sales for the

company came from the North, 30 percent was from West, 25 from

South and 10 percent from the East.

Cars In I ndia:

Maruti alto is said to be the most preferred car, as it has secured

about 50% sales of maruti alone.

Coming in at No.2 is the Maruti 800, which is known as the bread

and butter of the company. Maruti 800 is still a favorite small car

of many customers and has secured around 25 percent share in the

total sales and booking, said Parag Ohol, Sales Manger of

Chowgule Industries Ltd., an authorized dealer of Maruti cars.

Zen, the production of which has been discontinued by Maruti, is

still popular with buyers, though the corporate purchases of this

model have suffered to some extent, Somu Sen, Sales Manager,

Kothari Whales, said, some Zen aspirants have started considering

other option such as the Wagon R or the Swift LXI, Sen added

Hyundais small car Santro prices dropped by over Rs 20, 000 after

the Budget. Growth projections for the financial year of santro are

also on the upside as the production of Santro increases with an

additional shift and the company targets a 28 percent market share

against the current 21 percent. He said, We are targeting 40

percent growth rate this year.

W hy India:

INTEREST RATE NEW DELHI: Finance Minister P.C. Chidambaram on

Friday said that the Reserve Bank of India (RBI) addressing the


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liquidity issue, the rates of interest would remain attractive for both

depositors and borrowers.

In an interaction with newspersons on the sidelines of PunjabNational Bank (PNB) function here, Mr. Chidambaram said: These

[hardening and softening of interest rates] will remain attractive to

both depositors and borrowers.

Pointing out the higher rates of interest reflected the rising demand

for credit in the economy, Mr. Chidambaram said, No one in the

Government can say rising credit demand is bad or too much, asthe demand for credit was reflection of the increasing fund

requirements of various sectors of the economy. In effect, the issue

that to be addressed was the supply side of credit, he said.

As far the problem of liquidity of making more funds available in

the system [the] RBI is seized of the issue. I am totally confident

that [the] RBI will address the issue of supply side of the credit,

the Finance Minister said, RBI, Mr. Chidambaram said, had already

taken the initial step towards tackling the liquidity issue by way of

permitting banks to raise NRI (Non-Resident Indian) deposit rates

while nothing that the central bank Governor was competent person

to handle the problem of credit shortage.

In fact, the Government and the RBI were already seized of the

matter and a few steps had already been taken to partly tide over

the problem prior to the quarterly monetary review by the central

bank on April 18, A meeting between bankers and RBI Governor

Y.V.Reddy to discuss the liquidity issue was followed up with

another meeting with Mr. Chidambaram and the chiefs of public

sector banks.


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While the already-effected hike in NRI deposit rates was one of the

suggestions put forward by the Indian Banks Association (IBA),

some of the other proposals to tackle the problem were a reduction

in the cash reserve ratio (CRR) along with utilization of the excessStatutory Liquidity Ratio (SLR).

Speaking at the PNB function, Mr. Chidambaram said there was a

need to strike a balance between the demand of depositors and

borrowers. In particular, to sustain the high economic growth rate

being witnessed since the third quarter of 2004-05, the supply of

credit had to be increased to raise the investment rate, he said

Mr. Chidambaram conceded that there was a wide mismatch

between the demand and supply of credit in the while the growth in

lending thus far in the current fiscal has been 30 percent, deposits

had gone up by a mere 16 percent. To bridge this gap , he said,

ways and means had to be devised to maintain the investment rate.

Mr. Chidambaram also exhorted banks to improve the quality of

credit and hoped that they would raise more funds from the market

following the recent RBI guidelines on hybrid loans. The function

was organized by PNB to mark the launch of its 2000 th centralized

banking branch. In a years time, the bank linked 1,000 branches to

the centralized network.

Major Pow er

US + China + India > 50% economic grow th

By 2020, the combined forces of the United States, China and India

will account for more than 50 percent of all new economic growth,

according to a just issued Economist Intelligence Unit (EIU) report.


34/72

Among EI Us predictions

Globalization of companies will increase, and there will

be sizeable growth in global economic output, but only

15 percent increase in the work force. Chinas economy will be on par with the United States

by 2020, and will have the second largest consumer

market and the largest tech sector. Asias over all share of the global economy will rise to

43 percent from its current 35 percent. India will contribute 30 percent, or 142 million, of the

new workers entering the global work force. The US will contribute 12.5 million new workers, and

the overwhelming majority of new jobs will be in the

service industry. The EIU report was sponsored by Cisco

Systems.

Emerging India

In vesting in Asia: A N ew Middle Class-

That Asia can become the engine of global economic growth is a

recurring concept in the relevant literature, a theory floated

variously throughout the centuries without yielding tangible results.

Based on a perceived inability of the region to deliver on its

potential, many people, professional, and investors included-resistthe idea that Asia can develop a sustainable, consumer-based

economic growth model. Such resistance is rooted in the regions

well documented dependence on exports to the developed

Western economies. Asia, in this construct, will remain a volatile

investment proxy to global economic growth, stuck in a perpetual

boom-and-bust cycle.


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But consider that following set of circumstances: a large population

in a demographic sweet spot, a high savings rate, an increasing

bias toward consumption, and the fact that the world needs a new

growth engine for the 21st

century. These elements portend a rise of Asian consumer that will transform the global economy. Although

this transformation is still in its early stages, marked by periods of

rapid advancement as well as periods of relative stagnation, Asia is

steadily becoming the main growth game in town.

Due to the regions internal strengths, the knowledge gained during

the boom and bust cycles, and the current state of the globaleconomy, Asias time is upon us.

The firmly entrenched belief that the world cannot grow without the

American consumer being the sole dominant force will cost

shortsighted investors the opportunity to identify and capitalize on

an emerging, gigantic trend.

Because humans are creatures of habit, it is difficult to alter our

ideas and identify change. The inability to see the transition to Latin

American and Japanese growth in the 1970s after everyone had

become extremely comfortable paying the U.S. growth stocks of the

1960s is an example of this stasis. A more recent manifestation of

this resistance to change is characterized by the fear sparked by the

1996 collapse of the Japanese consumer that the world would have

great difficulty finding a new consumption archetype.

History demonstrates that change in world economic leadership is

constant. Consider the great European powers that used to hold the

economic reigns of the world. When one city-state was at the height

of its influence, neither the citys inhabitants nor people abroad

were able to contemplate a change of the status quo.


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In the 1300s and 1400s, the Italian powerhouses of Venice, Genoa,

and Florence dominated, followed by Spain and Portugal. In the

1500s Antwerp and then Amsterdam took over as centers of world

banking and trade. In the 18th century, the power shifted toLondon, with the start of the Industrial Revolution. Eventually, the

U.S. took over the lead.

Today, those claiming things will stay the same sound even more

nave than those grew comfortable in their respective dominant

city-states. Given the already significant effects of globalization on

the worlds economy, change in the current context is a lot closer athand than many people are willing to accept.

Asias road is difficult one, perhaps more difficult than those faced

by fast-growing economic regions. Asia is coming of age during a

period of explosive globalization and technological change. Access

to technology and capital offers a lot of opportunities, but such

access is also restrictive as the region is member of an extremely

complex and interconnected world. Complicated relationship makes

decision- making especially difficult.

In the past, developing economies did not have outsiders looking

over their shoulders. As the road to prosperity is not always clearly

defined and fair, this relative solitude worked to these economies

advantage. Today, though, the rapidly emerging economies operate

under the microscope of countless worldwide organizations and

governmental agencies- all administrated by the economically

developed nations (EDNs). Developing economies must find ways to

grow and integrate into the global economic system, while

answering the questions and satisfying the demands of the great

economic powers.


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What would have happened to the Industrial Revolution in England,

or what would have been the rate of progress in the American

colonies, if they had to play by the rules that developing countries

in Asia are required to follow today?

To suggest that now is not the 18 th century and that the world has

come a long way in the civility, freedom, and the like ignores the

fact that developing Asia is today at the same position (relative to

the progress that the world has made) as the emerging economies

of more than 200 years ago. After all, 45 percent of Chinas total

workforce is still employed in the farm sector, a clear indication thatChina is still at a relatively early stage in the industrialization

process. 3

Looking Back:

Asia, especially China because of its size, has long excited the

imagination of the Western world. Marco Polo talked about the great

wonders of China, and Christopher Columbus although he never

reached China spoke of an incalculable amount of trade. In the

1800s, British merchants tried, unsuccessfully, to conquer China.

It is beyond the scope of this book to examine the details of these

failures, but some brief points are warranted. Few people appreciate

(mainly because of Britains and later, continental Europes

industrialization boom) the fact that parts of Asia, especially parts of

China, Japan, and India, were on the same economic level as

Europe until the end of the 18 th century. As Kenneth Pomeranz

noted, In sum, core regions in China and Japan circa 1750 seem

resemble the most advanced parts of Western Europe, combining

sophisticated agriculture, commerce, and non-mechanized industry

in similar, arguably even more fully realized, ways.


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This lack of appreciation, coupled with Europes spectacular

economic growth in the 19 th century, led to unshakable

misunderstandings when the West did business with China in

particular. Carl Crow put the problem into perspective in 1937. Every now and then, he write, we are visited in Shanghai by an

export manager, usually a new one, who appears to be spending his

companys money on an expensive trip around the world for the

sole purpose of discovering how many points of superiority he and

others of his nationality enjoy over the people of the country he is

visiting.

This shallow sense of superiority and a lack of sensitivity to the

regions idiosyncrasies had led to myriad mistakes by and financial

loses for Western investors.

Of course, this is a two-way street; Asias own attitudes harmed

Asia numerous times. In the 1990s, the region leaders and

businessmen accepted the theory that there was something unique

about Asia that made its economies thrive. But the work ethic of its

people notwithstanding, a careful look reveals that the regions

success was more the result of good timing than anything else. At

the time, Southeast Asia was the only part of the world not

enmeshed in crisis, and it had fairly open markets facilitating an

economic and stock market boom. With Latin America beaten own,

Africa facing its chronic problems, and Japan at the end of its run,

the tigers (for example, South Korea, Taiwan, Singapore, and so

on) were the worlds only growth investment choice.

The only rational explanation for this special status misconception

is the vanity of human beings and the conviction that, for whatever

reason, their situation- economic or otherwise is of a special kind


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that deserves special treatment, and above all is almost certainly

irreversible.

These above mentioned factors will make India a hot market forcars and thus this study will give the marketers a little overview

about the perception and exception from different countries by the

Indian consumers. It will help the marketers in developing a product

that will fit a according to their needs.

The Country-of Origin Concept:

In an era of global corporations and intertwined transitional network

of exchanges (e.g. ideas, R& D, product design, sourcing of raw

materials and subassemblies, manufacture, and distribution) that

results in the final product, Saeed (1994) defines the country of-

origin of a product as the country with which a firm that produces

the product is associated and, typically, this is the companys home

country. For example, many consumers would consider Ford Festiva

and Mercury.

Tracer American-made automobiles although Ford Festiva was

designed in the US, engineered by Mazda in Japan, and is being

built by Kia in Korea. Mercury Tracer has a Ford design, built on a

Mazda platform in Mexico, with a Ford engine manufactured in

Mexico and other components form Taiwan Also the Honda Accord

is built in Ohio and the Toyota Corolla in California out of parts

imported mostly from Japan. But in this project an effort is made to

find out the perception for cars made by different foreign players in

Indian consumers mind.


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Definition

Country of origin effects has been defined in many ways in the

literature. According to Wang and Lamb (1983), country of origin

effects is an intangible barrier to enter new markets in the form of negative consumer bias toward imported products. Johansson et

al.(1985) and Some other define it the country where corporate

headquarters of the company marketing the product or brand is

located . Typically, this is the home country for a company. Country

of origin is inherent in certain brands. IBM and Sony, for example ,

imply US and Japanese origins, respectively.

In general, the country of origin affects consumers product

evaluation since consumers evaluate a product on the basis of

information cues available. The country of origin is also found to be

one of these cues because consumers tend to be less familiar with

products of foreign origin. Some studies suggest a hierarchy of

effects among countries that is the relationship between the level of

economic development and perceived superiority of the products.

Other studies investigated the effects of country of origin on

consumer evaluations of uni-national and bi-national products since

the globalization of business functions has led to the proliferation of

hybrid products or products that have foreign made components but

a domestic brand name.

These authors further found various other sources of biases that

could influence consumers preference for products made in

different countries, including ethnocentric bias. Despite the general

consensus with regard to the influence of country-of-origin effects

non-product evaluation, Han (1989) explained how this influence

might take place. In his halo model, he posited that consumers

might use country image as an information cue to infer the quality


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consumers Lifestyle and ethnocentric behaviors to provide some

guidelines and suggestions to marketers and advertising agencies

that are operating not only in India but in neighboring countries

with similar level of socio-economic technological developments asIndia.

Conceptual Framewo rk:

One of the first conceptualizations of the county-of- origin

phenomenon was that of Nagashima. He defined the image that

consumers associate with a given country of-origin as the picture,

the reputation, the stereotype that businessmen and consumers

attach to products of a specific country. This image is created by

such variables as representative products, national characteristics,

economic and political background, history and traditions, Others

view this country image as reflecting consumers general

perceptions about the quality of products made in a particular

country and the nature of people from that country. Country of

origin perceptions entails cognitions, emphasizing specific product

and marketing attributes, and affect, regarding the countrys

people. More broadly, Samiee (1994) regards the country-of-origin

effect as any influence or bias that consumers may hold, resulting

from the country of origin of the associated product or service. The

source of the effect may be varies, some based on experience with

a product(s) from the country in question, others from personal

experience (e.g. study and travel), knowledge regarding the

country, political beliefs, ethnocentric tendencies, (or) fear of the

unknown.

The country of origin , reference group influence , and consumer

ethnocentrism literatures have developed independently ; however ,the three streams of research merge when addressing the role of


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national loyalty in the purchase Marketing decision process. While

the country-of-origin effect serves to convey global impressions to

users about the product or product attributes when knowledge is

lacking, it also serves as an indicator of ones group identity,Attachment to an in-country versus foreign produced product will be

stronger, the more salient the sense of national affiliation and

loyalty.

For instance, a person with a low sense of national loyalty is not as

likely to respond promotional campaigns focusing on a national

theme as are individuals possessing a strong sense of loyalty fortheir nation. Brand name, store image, specific product attributes,

or other non country specific cues to product quality may

persuade less nationalistic consumers to prefer foreign product as

opposed to their locally-made substitutes But, the aforementioned

factors are not related to national loyally. On the other hand, a

staunch nationalist may respond to the country-of-origin cue

because of close association of nation with ones own self-identity-

A true patriot should always support local versus foreign

produced goods and services represents an attitude reflective of

own country bias which is activated by exposure to the country-of-

origin cue. Thus, the country of-origin effect can be separated into

two discreet components. One component is informational and

provides cues to consumers regarding the value of product

attribute, which are difficult or impossible to access, or for which

there exists no prior information for assessment. Simply put, the

first component serves to convey impressions of quality,

dependability, specific information is not readily present A second

component of the country of origin cue relates directly to ones

group affiliation (i.e. second component of the effect which this

research focuses on. For the case of airline travel, it is expected


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that national loyalty plays a key role in the selection process and

the country of air carrier will influence the selection process.

Ethnocentrism:

About Ethnocentrism :The tendency of people to put their own group at the center: to see

things through the narrow lens of their ow n culture and to use the

standards of that culture to judge others.

Ethnocentrism (eth no sen triz em): Ten tendency toview the traits, ways, ideas, and values observed in other cultures

as invariably inferior and less natural or logical than those of ones

own group/

Ethnocentrism is a commonly used word in circles where ethnicity,

inter-ethnic relations, and similar social issues are of concern theusual definition of the term is thinking ones own groups ways are

superior to others or judging other groups as inferior to ones

own.

Ethnic refers to cultural heritage, and centrism refers to the

central refers to the central starting point. So ethnocentrism

basically refers to judging other groups from our own cultural point

of view. But even this does not address the underlying issue of why

people do this Most people, thinking of the shallow definition,

believe that they are not ethnocentric, but are rather open minded

and tolerant. However, as explained below, everyone is

ethnocentric, and there is now way not to be ethnocentric it

cannot be avoided, nor can it be willed away by a positive or well -

meaning attitude.


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To address the deeper issues involved in ethnocentrism calls for a

more explicit definition. In this sense, Ethnocentrism can be

defined as: making false assumptions about others ways based onour limited experience The key word is assumptions, because we

are even aware that we are being ethnocentric we dont

understand that we dont understand.

Ethnocentrism is often linked to a sociological theory called cultural

relativism , which means that: cultural relativists assert that

concepts are socially constructed and vary cross-culturally. Theseconcepts may include such fundamental notions as what is

considered true, morally correct, and what constitutes knowledge

are even reality itself this has major implications for the study of

non-Western societies. If importing a Western rationalist approach

is ethnocentric. An insiders view of the culture. Ethnography thus

becomes a process of uncovering the meanings by which people

construct reality and translating this knowledge into the discourse of

the fieldworkers own society. They key is erasing ethnocentrism is

first understanding that one is ethnocentric. For example, if one was

in France, and looking at any particular amount of francs, and asked

How much is this in real money? that person would be

ethnocentric. The first step is recognizing the attitudes and beliefs

that make us ethnocentric, and then work to dispel them.

Yesterday I dared to struggle. Today I dare to win. Berbadete

Devlin

Automobile Dealers Network In India :

In terms of Car dealer networks and authorized service stations,

Maruti leads the pack with Dealer networks and workshops across

the country. The other leading automobile manufactures are also


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trying to cope up and are opening their service stations and dealer

workshops in all the metros and major cities of the country. Dealers

offer varying kind of discount of finances who in tern pass it on to

the customers in the form of reduced interest rates

Major Manufacturers of Automobiles in In dia:

Maruti Udyog Ltd.

General Motors India

Ford India Ltd.

Eicher Motors

Bajaj Auto

Daewoo Motors India

Hero Motors

Hindustan Motors

Hyundai Motor India Ltd.

Royal Enfield Motors

Telco

TVS Motors

DC Designs

Government has liberalized the norms for foreign investment and

import of technology and that appears to have benefited the

automobile sector. The production of total vehicles increased from

4.2 million in 1998- 99 to 7.3 million in 2003-04 . It is likely that the

production of such vehicles will exceed 10 million in the next couple

of years.


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Automobile Export Numbers:

Category 2000-01 2006-07 (Apr-Dec)

Passenger Car 25468 121478

Multi Utility Vehicles 2654 3892

Commercial Vehicles 10108 19931

Two Wheelers 100002 256765

Three Wheelers 21138 51535

Percentage Grow th -16.6 32.8

The industry has adopted the global standards and this was

manifested in the increasing exports of the sector. After a

temporary slump during 2000-01and 2001-02, such exports

registered robust growth rates of well over 50 per cent in 2002-03

and 2003-04 each to exceed two and- a-half times the export figure

for 2001-02.

Sales incentives, introduction of new models as well

as variants coupled with easy availability of low cost finance with

comfortable repayment options continued to drive demand and

sales of automobiles during the first two quarters of the current

year. The risk of an increase in the interest rates, the impact of

delayed monsoons on rural demand, and increase in the costs of inputs such as steel are the key concerns for the players in the

industry.

As the players continue to introduce new models and variants, the

competition may intensify further. The ability of the players to

contain costs and focus on exports will be critical for the

performance of their respective companies


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The auto component sector has also posted significant growth of 20

per cent in 2005-06, to achieve a sales turnover of Rs.30,640 crore

(US$ 6.7 billion). Further, there is a potential for higher growth due

to outsourcing activities by global automobiles giants. Today, thissector has emerged as another sunrise sector.

Economic growth over the past decade has transferred India into an

important commercial centre with a vibrant lucrative consumer

market. In recent years, India has become an attractive competitive

and fast growing market for companies around the world. The

liberalization policy followed by India after 1991 economic reformshas given rise to the same condition for local and foreign

businesses. These developments have significantly enhanced and

affected Indias relationship with the international business

community.

With a young and rapidly growing large population base over 40%

larger than total population of many countries, India possesses a

small, very wealthy, western- oriented upper class and a sizable

and growing middle-class of salaried workers and small business

owners who are becoming major consumers of products. Therefore

this market has attracted significant attention from multinational

companies North America, Europe and Asia. To tap this potential

market, global marketers will require a comprehensive

understanding of Indian consumers. As per capita income continues

to grow, both disposable and domestic consumption levels will fuel

demand for more imports.

After the smokes of cold war between Western world and China,

Indian Market is the lenient policies followed by his democratic

country as against restricted policies of communist country like

China. The country of origin (COO) concept has come up with age.


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With the spread of globalization, the need of has come with age.

With the spread of globalization, in the need of studying the impact

of country of origin of product on its sales has increased

tremendously. The same type of product of different countries findsdifferent rating by different people. In this project, an effort has

been made to find the (COO) impact on buying behavior of people.

Here the respondents are students of PUNJABI UNIVERSITY,

PATIALA.

As more and more countries are moving to other countries, it has

become extremely important for the manufacturing companies andthe marketers to find how the inhabitants of that particular country,

perceive their product. I this way they may be able to forecast the

sales of their product to greater extant. Many studies have already

been undertaken on this concept but this particular study aims to

find out the forth-coming trend of car through the youth. Because

ultimately they will be the future buyers. This project will not show

interest of educated students as in the near future they will

represent the major chunk of car owners.

This future car owners have different conceptions, expectations for

different countries i.e. India, Japan, Untied States that is surely

going to effect their sales in future. Emerging markets in Asia and

Latin America led advancers. Venezuela, Russia and India led with a

gain of 44%, 26% and 20% respectively. Firm prices in

commodities such as oil, iron ore and metals supported the

advances in Brazil, Mexico and Venezuela as well. Rising corporate

profits and consumers spending supported index in India. Taiwan

and South Korea delivered negative returns for the quarter. Chief

Economist at CLSA Jim Walker believes that going ahead 2007 is

likely to be tough year for global liquidity. However, he adds

that Indias economic growth could move to 9-10%, and that Indias


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current account deficit is not a worry for now. He further says that,

there is not much downside to the rupee.

Hypotheses:

Given the issues discussed so far, the following two hypotheses

relating to country-of origin of automobiles, were investigated in

this study. The first hypothesis tests for significant differences in the

evaluation of Indian consumers perceptions of where automobiles

are made and their evaluations of those automobiles.

H1: Indian consumers would evaluate automobiles, which they

perceive to be made in US, Japan differently from those they

perceive to made in India.

H2: Indian consumers of different genders, education, income and

age will evaluate automobiles of different countries differently.


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CHAPTER-2

REVIEW OF LI TERATURE

Cordell (1991) suggests that consumer preferences are more

product specific for industrialized than less developed countries.

That is, a negative COO effect is evident when the home country of

manufacture is less developed than alternative sources of goods. In

general, a specific country can rank high in one product class and

low in another.

Han (1988) concluded that the emotion of patriotism played a

significant role in consumers choice of televisions and automobiles.

However, the cognitive attitude toward products made in different

countries (country images) played a limited role. The study found

that patriotic consumers tend to be older, white, and from blue

collar occupations.

Kayank and Cavusgil (1983) studied consumers perceptions of

different classes of products made in their own country but the

same respondents could be swayed to choose foreign products if

quality and price considerations were sufficiently favorable.

Specifically, they observed that consumers may not accept inferior

quality domestic products when superior foreign products are

available. They concluded that consumers attitudes towardproducts of foreign origin vary significantly across product classes.

Knight (1999) in his research paper titled as Consumer

preferences for foreign and domestic products has compared

consumer preference for goods made abroad and in the home

country by both foreign and home country firms. These preferences

and the intervening role of price-quality attributes are assessed in


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an empirical study using conjoint analysis and a MANOVA

procedure.

Results suggest that country of manufacture and product qualitystrongly influence consumers decision making in globally available

product categories. Specifically, compared to imported goods

consumer appear to prefer domestically manufacture goods and are

often willing to pay a higher price for them. It is usually when

imported goods are significantly superior quality that consumers will

pay more to obtain them. Finally, in their purchase consumers will

pay more to obtain them. Finally, in their purchase decisionsconsumer appear not to put much weight on a products perceived

importance to the home countries manufacturing base.

Pasw an and Sharma (2004) in their research Brand country

of origin (COO) image: investigation in an emerging franchise

market has investigated the relation ship between Accuracy of

brand country of origin (COO) knowledge and image, in a

franchising context. Accuracy of brand COO knowledge is found to

be positively related to COO image. In accurate brand COO

knowledge leads to a confusing and somewhat negative image

about COO.

In addition, antecedents to the brand COO knowledge

lead to a confusing and somewhat negative image about COO. In

addition, antecedents to the brand COO knowledge are also

investigated. Factors such as social class, education and travel

abroad positively influence the brand COO knowledge is also

investigated. Factors such as social class, education and travel

abroad positively influence brand COO knowledge. This

investigation conducted in an emerging especially for multinational

franchisers.


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Sulati and Baker (1998) in

Documents

Amninder Singh Mahal