11 A PROJECT ON: Analysis of the Indian Automobile Industry with respect to the Small Car/Hatchback Segment. A Project Report submitted as partial fulfillment of the requirement for the degree of Bachelor of Business Administration. GGuuiiddee:: SSuubbmmiitttteedbbyy:: MMrrss.PP oooojjaPP uunnjjaabbii PPrriiyyaamJJ hhaa Exam Seat No: 95 Bachelor of Business Administration Faculty of Commerce The Maharaja Sayajirao University Vadodara 2009-10 22 Acknowledgement In preparing this project, I have received assistance and contribution from various quarters. Firstly, I express my extreme gratitude to my mentor, Mrs. Pooja Punjabi who despite of having several other commitments and pre-occupations provided me with superb guidance and valuable insight about the development and finishing of my project. I would also like to thank the Assistant Programme Directors Mr. Kalpesh Shah and Dr. Pragnesh Shah for providing us with such a unique learning experience. It would be an understatement to say that without their guidance, this project would not have seen the light of day. I would like to emphasize on the fact that this project has been an enriching and learning experience as I gained invaluable and exceptional knowledge about the subject matter in pursuing this exercise. For this opportunity, I am extremely grateful. 33 Introduction Acknowledgement In preparing this project, I have received assistance and contribution from various quarters. Firstly, I express my extreme gratitude to my mentor, Mrs. Pooja Punjabi who despite of having several other commitments and pre-occupations provided me with superb guidance and valuable insight about the development and finishing of my project. I would also like to thank the Assistant Programme Directors Mr. Kalpesh Shah and Dr. Pragnesh Shah for providing us with such a unique learning experience. It would be an understatement to say that without their guidance, this project would not have seen the light of day. I would like to emphasize on the fact that this project has been an enriching and learning experience as I gained invaluable and exceptional knowledge about the subject matter in pursuing this exercise. For this opportunity, I am extremely grateful. 33 Introduction The following report examines the Automobile Industry in India with respect to the Small Car segment, where various offerings of the leading car makers out on the market today are analyzed, interpreted and compared. The study has been based entirely on Secondary Data because primary data would have required a very large sample size to adequately cover all the aspects of the project, which would have caused a serious problem of insufficient time and resources. Also, information about cars is made available via different secondary sources, which are a matter of public knowledge and can be obtained easily from various electronic and non-electronic sources without the chance of getting incorrect or erroneous data. All the data found in this report has been obtained from reliable publications like Top Gear publications and Overdrive Inc. which get their data from the manufacturer-released specification sheets. Thus, the accuracy of the facts and figures provided in the report is quite stellar. There are several reasons why Small Cars have such a big advantage over their larger and mid-sized compatriots in this day and age with: Rising Fuel Prices Traffic Manouvering Aiding These points determine the advantages of owning and driving a small car: Advantages of Small Cars It's time to buy a car, and you're weighing options like make, model, size and year. One of the things you may want to seriously consider is the size of the vehicle. So before you commit to a large vehicle--like a truck, SUV, or full-size sedan--consider the many advantages of buying a smaller car. BETTER FUEL ECONOMY: As a general rule, smaller vehicles get better gas mileage in the city and on highways. And with today's high gas prices, this fuel savings can add up significantly over time, especially if you’re daily commute is a long one. In fact, many small cars get 20 miles per gallon more than the average large truck or SUV, so the savings could be hundreds--or even thousands--of rupees over the life of your car. BETTER MANOUVERABILITY: Ever been stuck in a tight spot and needed to make a quick turn-around? Ever wanted to parallel park on the street in a super small space? Whether you're driving down a skinny one-way street, or simply zipping in and out of highway traffic, a smaller vehicle makes maneuvering much easier. That means fewer hassles in crowded parking lots or on busy streets. 44 LOWER PRICE: Larger vehicles tend to cost more than smaller vehicles, in part because smaller vehicles are in less demand. And, from a strictly manufacturer's point of view, smaller cars require less materials. Chances are you'll be able to get a smaller car for thousands less than its larger counterparts, which can make a big difference to your overall cost. IMPROVED HANDLING: Want to avoid accidents? A smaller car can help you do that! They tend to be more nimble and easier to handle, making it easier for you to avoid collisions. Their lower center of gravity means they're less likely to flip or roll over if an accident does occur. And they also have shorter braking distances than larger trucks or SUVS, which means you, may have a better chance at avoiding a collision. Therefore, for the above mentioned reasons, I chose to conduct a study on this segment of car market in India. 55 Classification of Small Cars From a Global Perspective 6 Hatchback Peugeot 306 hatchback, with the hatch lifted. Hatchback is a term designating an automobile design, containing a passenger cabin with an integrated cargo space, accessed from behind the vehicle by a single, top-hinged tailgate or large flip-up window. The vehicle commonly has two rows of seats, with the rear seat able to fold down to increase cargo space. Terminology: Citroën Traction Avant hatchback (1954); rear seat position is after final side window Hatchback vehicles are functionally similar to station wagons (which are intended to carry large volumes), but distinguished by a (much) smaller load area. The typical hatchback roof rakes down steeply behind the C-Pillar , resulting in very little car length behind the rear wheels and thus no room for a side window over the load area. A good example of the difference can be seen in the 1999-2007 Ford Focus, which offers both a wagon (Focus ZTW/ZXW) and hatchback (Focus ZX3 and ZX5) models. The 2002-2007 Mazda 6 also came in five-door hatchback and wagon configurations. Alternatively, cars with a longer rear end need a much more slanted rear window which is known as a liftback , in comparison to traditional hatchbacks where the tailgate is more vertical/upright. Liftbacks are sedan-size cars with a fastback profile and a hatchback- type tailgate. However, the term "liftback" did not gain the same mainstream acceptance as "hatchback" or "sedan", for instance being almost never used in the United Kingdom where liftback cars are particularly popular. There, 5-door liftbacks are in general called hatchbacks, though 3-door liftbacks are often referred to as coupés by certain automakers, such as the Mercedes-Benz CLC-Class. Typically, most compact cars offer a hatchback configuration, while midsize and larger cars have a wagon style. There are some exceptions, with compact wagons such as the BMW 3-Series (E36), Ford Focus ZTW, Toyota Corolla Fielder , and Mercedes-Benz C- Class Estate. These four lineups have or had hatchback configurations as well, such as the 3-Series hatchback , Focus ZT3 and ZT5, Corolla Matrix (or simply Matrix), and CLC- Class (formerly the C-Class Sportcoupe). The tailgate is also referred to as the hatch. Hatchbacks are often described as three-door (two entry doors and the hatch) or five-door (four entry doors and the hatch) cars. In Europe, city cars, superminis, and small family cars are usually hatchbacks. Small cars often incorporate a hatch tailgate to make the best use of available space. Especially in smaller models, hatchbacks are often truncated, with the tailgate nearly vertical, to reduce the car's footprint. This is an important consideration in countries where small streets and traffic congestion are big factors (see for instance the Japanese Kei cars). Hatchbacks frequently include fold-down rear seats, which enable a substantial portion of the interior space to be used as a cargo area. Usually, the rear seat can be folded partially (for instance 1/2, 1/3 or 2/3) or completely to expand the cargo space. Hatchbacks typically have a parcel shelf: a rigid shelf covering the cargo space that is hinged behind the rear seats and lifts with the tailgate. An alternative is a flexible roll-up tonneau cover . In many countries, where a hatchback and a conventional sedan are available for the same model, sedans are typically more popular. Generally speaking, this is not the case in Europe, where the hatchback is more popular and chances are the sedan is not marketed. Examples are France which has an old tradition of building hatchbacks and where sedan models are sometimes not even sold, like the Renault Laguna, or Great Britain where the 1997-2009 Toyota Avensis Hatchback outsold its StationWagon and Sedan models. Manufacturers have even been forced to offer a notchback version of cars that are sold only as hatchbacks elsewhere to comply with the preferences of clients, as with the Citroën C-Triomphe. Costwise, hatchbacks are priced differently than their sedan counterparts. For example, the Nissan Versa hatchback is cheaper than Versa sedan, while the Mazda3 Sport hatchback is more expensive than the Mazda3 sedan.