Impact of Nano on Two Wheeler Market in Mumbai
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IMPACT OF NANO ON TWO WHEELER MARKET IN MUMBAI SECTION I INTRODUCTION 1.1 Rationale For The Study Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax relief by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on occupancy of Indian economy. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into three broad categories: Cars, two-wheelers and heavy vehicles India has always been a lucrative market for Automobile Manufacturers. Indian economy is continuously growing and attracting more and more Foreign Automobile Manufacturers in India. The aim of this study is to discuss the impact created by TATA’s upcoming Rs.one lakh Car “NANO” on Two wheeler manufacturers and in India. One of the major driving factor for the success of Nano will be Prize Conscious mentality of Indian Customers. A car priced between a high end two wheeler and a low end four wheeler have a potential to explode the small car segment. Some 7 million two wheelers and 1.4 million passenger vehicles (including cars and utility vehicles) were sold in 2006-07. (Source: FADA). That apart, an estimated six lakh second hand cars were bought every year. While the existing car buyers, who were willing to fork out at about 2.5 lakh for a four wheeler, might not be the potential customers, but out of the six million two wheeler 1 buyers one million two wheeler individuals will be probable customers according to Mr.Ratan Tata. (Source: Indian Automotive Industry by T.P.Rajmanohar) Owning a car is status symbol for Indian consumer rather than a bike. This further creates car market in India more and more attractive. Also the government policies in India are favoring to car manufacturers. Government is charging less excise duty on car manufacturers who making car below 1200 cc. The huge untapped potential for cheap cars along with challenges to two wheelers market rationalize the need for study this topic. Besides my personal interest and inclination towards Automobile industry motivates me to choose this subject. 2 1.2Objectives of the study The purpose of the study is: 1. To understand the consumer’s attitude towards Nano car in Mumbai region. 2. To analyze two wheeler market in Mumbai. 3. To discuss impact of nano on two wheeler market. 4. To analyze the Scope for nano in Mumbai market supported by Primary Research. 3 1.3 Research Methodology to be used Taking into account the objective of the study, the nature of research shall be “Exploratory Research”. The research methodology is detailed as under. I. Literature Review All Literature on the proposed study available from library and web sites shall be examined to get acquainted with the topic of the study. Press release by SIAM (Society of India Automobile Manufacturers), FADA (Federation of Automobile Dealers Associations) Economic Survey of India- 2007 Survey of India Automobiles Industry-2007 Bike Manufacturers in India, Car Manufacturers in India. Automobile magazines such as Motoring, Autoindia, Autocar, Top Gear II. Research Design and Hypothesis The hypothesis of the study shall be as under. H0: Null Hypothesis – “Launch of Nano will affect two wheeler market in Mumbai.” III. Period of study The period of study shall cover the period 1st September 2008 to 28 February 2009. 4 1.4 SAMPLING Sampling Universe The sampling universe shall consist of individuals in Mumbai. Sampling universe is the total theoretical population. Since there are geographical limitations and covering whole of India would not be feasible covering Mumbai is the possible solution for carrying out the survey. Sample Size The size of the sample shall be 93 individuals. Sampling Technique The sampling technique to be used for the proposed study shall be Non Probability Systematic Sampling. Sampling is the use of a subset of the population to represent the whole population. Probability sampling, or random sampling, is a sampling technique in which the probability of getting any particular sample may be calculated. Non Probability systematic sampling does not meet this criterion and should be used with caution. Nonprobability systematic sampling techniques cannot be used to infer from the sample to the general population. Any generalizations obtained from a non probability systematic sample must be filtered through one's knowledge of the topic being studied. Performing non probability systematic sampling is considerably less expensive than doing probability sampling, but the results are of limited value. 5 1.5 DATA: Types of Data Primary data as well as secondary data shall be used for the proposed study. Primary data: The method used for collecting information from a number of respondents i.e. the respondents who would respond to the survey. Secondary data: The information collected through various books, Publications, Newsletters, Newspapers and Magazines on Compensation Management. Data Sources The data for the proposed study shall be sourced from, Publication and news letters of Business Today, DNA newspaper Business newspapers such as Economic Times, Mint, Business Line, Business Standard Automobile magazines such as Motoring, Autoindia, Autocar, Top Gear Websites of the magazines such as, www.autocarindia.com www.autox.in www.indiacar.com www.automobileIndia.com www.indiaon2wheels.com www.autozmag.com 6 Methods of data collection Questionnaire Method shall be used for the purpose of data collection Questionnaire is a set of questions logically arranged presented to the respondents to answer. Quantitative and Qualitative Data collection methods The Quantitative data collection methods rely on random sampling and structured data collection instruments that fit diverse experiences into predetermined response categories. They produce results that are easy to summarize, compare, and generalize. Quantitative research is concerned with testing hypotheses derived from theory and/or being able to estimate the size of a phenomenon of interest. Depending on the research question, participants may be randomly assigned to different treatments. If this is not feasible, the researcher may collect data on participant and situational characteristics in order to statistically control for their influence on the dependent, or outcome, variable. If the intent is to generalize from the research participants to a larger population, the researcher will employ probability sampling to select participants. 7 1.6 Tools and Techniques of Analysis 1. Hypothesis Testing will be carried out. 2. Statistical and graphical analysis of the data collected shall be carried out. 3. The stated comparison shall be presented using tables and graphs. The data collected from the survey of the individuals carried out during the course of the proposed study as mentioned, would be represented in a graphical form. Graphical analysis shall be used because it is easier to understand any data in a diagrammatic form, graphical pictures The comparisons made shall be represented using tables and graphs because it is always easier and effective to see graphs and tables rather than reading too much of matter about the same. Diagrams wherever essential shall be used to make the presentation of the project report effective and simple to understand. 8 1.7 The limitation of proposed study Due to time constraint number of individual interviews conducted will be limited. There is 60% of Indian population being middle class the out come of study will deviate to some extent. 9 1.8 Expected Contribution From the Study The expected contributions from the proposed study are as under, 1. Possible out come the study will give us clear idea as to how & to what extent the launch of Nano(People’s car) which is about to be launched by TATA Motors will affect the Two Wheeler Market scenario in Mumbai. 2. It will also excepted put a light on how the price sensitive middle class behave (Attitude) towards launch of Nano. 10 1.9 Direction for future Research In future the performance of Nano will be considering the main parameter for growth in automobile sector. There can be a future study conducted on FUEL CRISIS that will be arising on account of success of Nano. There can be also future study conducted on TRAFFIC & SPACE MANAGEMENT that will be arising on account of success of Nano. There can be also future study conducted on CUSTOMER SATISFACTION regarding Nano. 11 SECTION II FUNDAMENTAL CONCEPTS RELATED TO THE TOPIC 2.1 INTRODUCTION TO AUTOMOBILE INDUSTRY The origin of automobile is not certain. In this section of automobile history, we will only discuss about the phases of automobile in the development and modernization process since the first car was shipped to India. We will start automotive history from this point of time. The automobile industry has changed the way people live and work. The earliest of modern cars was manufactured in the year 1895. Shortly the first appearance of the car followed in India. As the century turned, three cars were imported in Mumbai (India). Within decade there were total of 1025 cars in the city. The dawn of automobile actually goes back to 4000 years when the first wheel was used for transportation in India.