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Dissertation. Scope of Luxury Car Brand in India

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Dissertation. Scope of Luxury Car Brand in India G. L. Bajaj Institute of Technology and Management Gr. Noida A DESSERTATION PROJECT REPORT ON SCOPE OF LUXURY CARS IN INDIA Submitted to UP TECHNICAL UNIVERSITY, LUCKNOW FOR THE PARTIAL FULFILLMENT OF THE AWARD OF MASTERS IN BUSINESS ADMINISTRATION DEGREE Under the guidance of Submitted by Mr. ABHISHEK SAXENA DEEPAK SINGH Ass. Pro. MBA DEPARTMENT MBA-IV Sem. ROLL NO. 0919270016 1 ACKNOWLEDGEMENT Some works are so typical that are impossible for a person to complete it alone. Dissertation Project is one of them. I would not be able to complete my work without the help of my respected, Faculty Guide, my college and workplace colleagues. So it is my obligation to thank all of them. I have had the honour of having been associated & working under the able & stimulating guidance of “Mr. ABHISHEK SAXENA (Ass. Pro.) MBA DEPARTMENT”, G. L. BAJAJ INSTITUTE OF TECHNOLOGY AND MANAGEMENT, Gr. NOIDA. The Project work was undertaken under his keen supervision and the Project has been prepared by me. I express sincere feeling of gratitude and respect for him inspiring help throughout the work. Without his esteemed and valuable help and guidance it would not have been possible for me to accomplish my project. I am gratefully indebted to him. 2 Executive Summary The luxury car market in India has registered a fair amount of growth in the last few years and is growing at the rate of 25% per year. A luxury car is a luxuriously styled automobile which is designed to give satisfaction and comfort to its owner. A luxury car typically has carrying capacity of 6 passengers. The luxury cars in the Indian market are very expensive, with price tags that start from Rs. 20 lakh. Hence, luxury cars can only be afforded by the people who belong to the high income group and there are a lot of such takers in the Indian automobile market. The various reasons for the growth of the luxury car market in India are: • The economy is rising in the country which has given the people more disposable income which they are spending in buying luxury cars. • Various loan schemes have been launched by the automobile manufacturers and the financial institutions. This has made it very easy for the people to buy luxury cars and this has boosted the luxury car market in India. • With the IT boom in the country many youngsters are earning high pay packages which enable them to buy luxury cars. And this have further given boost to the market of luxury car in India. • The government have formulated many polices such as the relaxation of equity regulations and the reduction of import tariffs pertaining to the automobile industry. These have helped to reduce the prices of the luxury cars, which in turn have led to the growth of the luxury car market in India The various automobile companies manufacturing luxury cars for India are: • BMW manufacturers the BMW 530i and BMW 760li models • Rolls Royce manufactures the Rolls Royce Phantom V 12 model • Porsche manufactures the 911 Carrera, 911 Carrera S, and Cayman S models • Daimler Chrysler manufactures the Mercedes Benz C and E class models • Bentley manufactures the Bentley Range and Bentley Continental models Luxury car market in India have grown over the last few years. That it continues to grow more efforts must be made by the Indian automobile industry and the government of India. And only then the luxury car market in India will be able to reach its heights 3 India set its foot in the global automotive industry in 1898, with the first car rolled out in the streets of Mumbai. Since then, India has come a long way. Taking into Scrutiny the current statistics, automotive industry is now, the most dynamic sectors in India. The car market of India boasts of attractive finance schemes, increasing purchasing power and a vast variety of Luxury car range. India being one of the lucrative hubs for the car market is attracting auto majors from all over the world. The count of people ready to buy these high sticker cars is gaining momentum. In effect to this, almost all the overseas manufacturers including Mercedes, BMW, Audi, Suzuki, and most recently Volkswagen have entered the fray. Ferrari’s announcement to roar into the India market from 2010 and Aston Martin’s aspirations to enter the Indian market soon next year also signals that the market has just picked up pace and there are great possibilities for these indulgent vehicles to thrill the Indians. With Tata’s recent acquisition of Ford’s Land Rover and Jaguar brands, The Indian companies are in the right gear to compete with other global luxury brands making a rush in the country. Recent analysis show that India is now among the principal driving markets for the Asian automotive industry. The reasons for these unprecedented changes being in favour of India are quite a few. The growing population of well heeled citizens in India emerges to be the primary cause. With the overall population being 1 billion, the 1% people who constitute the affluent society or the new ’Global Indians’ are estimated to be over 10 million, mainly because of the growing disposable income of India. Secondly, Change in attitude of the customer accounts for the sudden acceleration in the Luxury car Market in India, as the emphasis has been shifted from price consideration and affordability to design, quality and pleasure. The Indians who believed in traditional savings now follow an extravagant approach. Stepping down to the third possible reason, exposure and passion for speed, power and elegance run on to take their seats. With more and more Car rallies, exhibition, televising of Formula 1 and international motor shows happening in the country, these luxurious coupés have created an urge in drivers to experience comfort and control at the very same time. Also, lower interest rates and good conditioned roads are some of the steps taken by the Indian government which fuelled the demand for ultra-luxury cars in Indian market. Now, penetrating into the future, we can adamantly say that, with the real GDP growth of India (8.8% in 2006) being outstanding, there are definite prospects of increasing count of Luxury car buyers. Growth in the luxury segment has been helped by an economy expanding at nearly 9 percent on average in the last four years, and the entry of new players and launches from the likes of BMW, Mercedes-Benz, Porsche and Audi. Audi, a German manufacturer of first-rate luxury cars and one of the world’s leading premium brands established Audi India under Volkswagen Group Sales India Pvt. Ltd. in Mumbai in March 2007 and is all set to stay put in the country for an enduring tenure through their valuable investments in brand management, marketing and customer services. 4 Mercedes-Benz India has had a long standing tie up in India in the luxury car segment with its inception way back in 1995. Being the only luxury car maker in India to have such a wide range of cars, (S-class, E-class, M-class, CL-class and many more), it also provides an authentic choice for the customers with each model in petrol and diesel variants. BMW, another world’s leading brand in the premium car segment, set its foot in India, just few years back. As its global record says, BMW in India, strives to achieve the same goal by presenting customers with Quality in conjunction with luxurious driving comfort. Rolls-Royce, favored by Indian royalty during the imperial British rule returned in 2005 after a gap of 50 years with the Phantom super luxury sedan. Ford’s Volvo launched of two of its most successful models, the S80 sedan and the XC90 SUV in both petrol and diesel variants, each promising to offer luxury with comfort. Consequently, the picture seems to be apparently flaunting that the ’Global Indians’ are all ready to take the Luxury Car market to an all-new high and it has been well said – “For a luxury car to remain one, its features have to stay ahead of the innovative curve”. 5 TABLE OF CONTENTS Page no. 1. INTRODUCTION 7-22 a) Big three automobile manufacturing countries 7-11 b) Automobile industry in India 12 c) Supply chain of automobile industry 13-14 d) Production statistics 15 e) Exports 16-17 f) History of brands 18-19 g) Car brands in India 20 2. REVIEW OF LITERATUE 23-77 a) Brand personality 23 b) The creation of brand personality 26-27 c) Why use brand personality 29 d) Brand personality of cars 30-32 e) Luxury vehicles 33 f) Luxury market segment 34--37 g) Luxury cars in India- Audi, BMW, Chevrolet, Fiat, Ford, Honda, Hyundai, Mercedes, Mitsubishi, Volkswagen, Volvo 39-77 3. OBJECTIVE OF THE RESEARCH 78 6 4. SCOPE OF THE RESEARCH 78 5. RESEARCH METHODOLOGY 79 6. RESEARCH FINDINGS 80-102 7. CONCLUSION 103 8. QUESTIONNARE 104-106 9. BIBLIOGRAPHY 107 INTRODUCTION BIG THREE AUTOMOBILE MANUFACTURING COUNTRIES 1. United States of America and Canada General Motors, Ford and Chrysler are often referred to as the "Big Three" or, more recently the "Detroit Three", being the largest automakers in the United States and Canada. They were for a while the largest in the world and two of them are still a mainstay in the top five. Ford has held the position of second-ranked automaker for the past 56 years, being relegated to third in North American sales, after being overtaken by Toyota in 2007. That year, Toyota produced more vehicles than GM, though GM still outsold Toyota that year, giving GM 77 consecutive calendar years of top sales.
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