MARKET RESEARCH ON SMALL CAR SEGMENT

Presented By: Vivekraj Shah Chitwant Tahalynai

Abhishek Kar Vishnu Sharma Shekhar Kumar

Sanket Bhawarkar

MARKET SIZE AND PROJECTIONSIndian Auto industry is a USD $58.6 billion market as of FY 2011 and is expected to grow to USD $145 billion by FY 2016.

Of this, the Passenger Vehicle (PV) Segment account for nearly 32% of the market share.Between 2005 and 2012, the PV segment is the fastest growing segment with a CAGR of 14.5%.

CATEGORIES OF INDIAN AUTO INDUSTRY

Two Wheelers

Mopeds

Scooters

Motorcycles

Electric Two Wheelers

Passenger Vehicle (PV)

Passenger Cars

Utility Vehicles

Multi Purpose Vehicles

Commercial Vehicle

Heavy Comm Veh

Light Comm Veh

Three Wheelers

Passenger Carriers

Goods Carriers

PEST ANALYSISPOLITICAL

• 100% FDI in Auto Sector.• No minimum investment criteria.

2002 Auto Policy

• Collaboration between Govt. of India, State Government and Auto Manufacturers.

• Create a state of the art Testing, Validation and R&D infrastructure in the country.

• Set up cost: USD 388.5 million.

NATRip

• Excise duty on large premium cars increased from 22% to 27%.• 5 year extension on deduction of R&D expenditure under Income Tax

Act.

Union Budget 2013

PEST ANALYSISECONOMIC

India’s global car export volume has been increasing at a CAGR of 22.4% over FY 2005 to FY 2012.

Passenger vehicles account for a sizeable 18 per cent of overall exports.

Firms save 10-25% on operations in India compared to Europe and Latin America

PEST ANALYSISECONOMIC

Overall slowdown in the PV volume segment seen in the last 2 years. (4.3% yoy growth in 2012-13 and 4.7% yoy growth in 2011-12).

Labor Issues Inflation Fuel Prices

Interest Rates

Deep Discounting

Reasons for Slowdown

PEST ANALYSISSOCIAL

THE INDIAN GROWTH STORY IS PROJECTED TO BE VERY FAVORABLE FOR THE AUTOMOBILE SECTOR OVER THE LONG RUN.

Rising

Income

• Personal (nominal) disposable income is expected to rise annually by 8.2% over FY11-17.• Auto finance industry has grown at an average annual rate of 13 per cent during FY08-12.

Demographic

• Rising middle class is expected to touch 550 million by 2025, up from 50 million in 2010.• Rising youth population.

Alternate Ener

gy

• In FY11, the CNG market was worth more than USD330 million and is expected to grow at a CAGR of 28 per cent over FY11-FY14.

• CNG distribution network in India is expected to increase to 250 cities by 2018 from 30 cities in 2009.

PEST ANALYSISTECHNOLOGICAL

Constant R&D is being conducted by companies to improve fuel mileage, reduce cost and innovate in alternative fuel engines.

A bulk of the capacity expansion program of PV OEMs proposed over the next two years is oriented towards creation and expansion of diesel engine capacity.

Tata Nano and the upcoming Pixel have opened up the potentially large ultra-low cost car segment.

Overall product lifecycle have forced players to employ quick product launches

CASE STUDY

Plants • Jamshedpur plant Established in 1945, with an area of 822 acres.

• Pune plant Established in 1966, Pimpri and Chinchwad, with an area of 510 acres.

• Lucknow plant Established in 1991, with an area of 600 acres.

• Pantnagar plant Established in August 2007, with an area of 953 acres.

• Sanand plant Established in November 2008, with an area of 725 acres.

• Dharwad plant Established in 3rd march 2013, with an area of 400 acres.

Output Capacity • Jamshedpur Plant = 180,000 cars• Pune = 470,000 cars• Lucknow = 230,000 cars• Pantnagar = 110,000 cars • Sanand = 250,000 cars• Dharwad= 120,000 cars

Focus Product

•Passenger Vehicles • Commercial Vehicles • Utility Vehicles

Raw material

From the design stage to production and sales, they are directed towards consuming fewer resources through product innovation and process optimization. They primarily use :-• Steel sheets and plates•Castings & forgings.•Tyres, fuel injection equipment, batteries, electrical items.•Rubber and plastic parts, paints and thinners for manufacturing the vehicles. •Aggregates such as axles, engines, gear boxes and cabs are either manufactured by them or procured from their subsidiaries, affiliates or strategic suppliers. •They also require consumables such as lubricants, welding consumables etc., for their production processes.

Material Units FY 2010-11 FY 2011-12 FY 2012-13consumedSteel Tonnes 220,133 258,980 135,873Steel Tubes Tonnes 82 43 19Non-Ferrous Alloys Tonnes 5,040 5,181 3,577Ferrous Alloys Tonnes 1,716 3,097 733Steel Melting Scrap 62,195 95,993 68,422Paints, Oils & Lubricants 12,151 14,457 10,840Kilo Liters 13,349 16,717 12,455Tyres, tubes & flaps 7,243,420 8,497,702 5,282,763Engines Numbers 135,181 152,785 100,737Sand Tonnes 75,036 78,522 52,634

Finances• Total Operating profit for March= 1,717.98 Cr Rupees•The Company has taken loans aggregating 11.52 Cr from 6 parties covered in the Register maintained under Section 301 of the Companies Act, 1956. •November sales at 40,863 units•Total share capital = 638.04 Cr Rupees•Major investments in current assets = 53024.34 Cr Rupees•The Company does not have any accumulated losses at the end of the financial year.

Merchandise• Tata Nano launched the 'Nano merchandise online store' on Ebay.

• The merchandise ranges from a wide variety of caps, mouse pads, pencil case, pencil box, pen drives, teddy bear, water bottle, T-shirts and even a mobile phone.

• Tata has come back with assured Tata merchandise for those who complete all 25 levels of “Beat The Traffic” game.

Process

Planning Designing Body Painting Resin moulding

Process

Component manufacture

Sub assembly Assembly Retailing and

DistributionEnd

customer

SUPPLY CHAIN OF TATA MOTORSSUPPLIERS

PROCUREMENTS

MANUFACTURING

CUSTOMERS

DISTRIBUTION

1200 Vendors Fuel injection pump

from Bosch, Bangalore

Jamshedpur, Pune, Lucknow, Pantnagar, Sanand & Dharwad.

Prime distributer, Area distributer, Local distributer & Installer.

Wholesales OF TATA Motors• Global wholesales of all passenger vehicles in December 2013 were 49,721 nos

• Global wholesales of Tata Motors' passenger vehicles in December 2013 were 9,477 nos

• Global wholesales for Jaguar Land Rover for the month were 40,244 vehicles

• Tata Motors Group global wholesales at 79,220 in December 2013

• Global wholesales commercial vehicles and Tata Daewoo range -- were 29,499 nos.

SUPPLIERS Major Suppliers-

• Walia Auto Ancillaries PVT.LTD for all types of Steering Nuts, Gear Box housing & Ladder Frame, Front Wheel Hubs etc.

• Knorr Bremse CV Systems for Commercial vehicles air brakes

• Tata Yazaki Auto comp Ltd for wiring Harness

• Tata Toyoo Radiators Ltd for Radiator assemblies

DEALERS OF TATA MOTORS

TATA MOTORS SELLS CARS THROUGH 131 DEALERSHIPS IN 57 CITIES ACROSS INDIA

DELHI- RAMA MOTORS, HIM MOTORS

MUMBAI-CONCORDE CARS , FORTUNE CARS

KOLKATA-LEXUS MOTORS , GOSH MOTORS

Consumer Preference

Major Suppliers-• Walia Auto Ancillaries PVT.LTD for all types of Steering Nuts, Gear Box housing & Ladder Frame, Front Wheel Hubs etc• Knorr Bremse CV Systems for Commercial vehicles air brakes• Tata Yazaki Auto comp Ltd for wiring Harness• Tata Toyoo Radiators Ltd for Radiator assemblies

Market Share of TATA Motors

Major Suppliers-• Walia Auto Ancillaries PVT.LTD for all types of Steering Nuts, Gear Box housing & Ladder Frame, Front Wheel Hubs etc• Knorr Bremse CV Systems for Commercial vehicles air brakes• Tata Yazaki Auto comp Ltd for wiring Harness• Tata Toyoo Radiators Ltd for Radiator assemblies

STRENGTHS: • Globally cost competitive.

• Adheres to strict quality controls. • Adoption or Access to latest technology.

WEAKNESS: • Low research and development.• Most component companies are

dependent on global majors for technology.

OPPORTUNITIES: • Sourcing hub for global automobile

majors. • Export opportunities may be

realized .

THREATS: • Imports from FTA Regime Countries.

• Smaller players, who do not upgrade to global standards, would get extinct.

SWOT

PROBLEM FORMULATION

EVALUATE THE CUSTOMER BUYING PREFERENCE AND TARGET MARKET OF SMALL CAR SEGMENT IN KARJAT CITY.

OBJECTIVES

1• To identify the main factors that influence

consumers in selecting a car in the Karjat area.

2• To identify the target demographic of the car

segment in Karjat.

3• To analyze the influence of various car

advertisements on consumer buying preference.

HYPOTHESIS 1

To identify the main factors that influence consumers in selecting a car in the Karjat area

Price is the most important factor in selecting a car.

Consumers prefer petrol cars over diesel cars.

Females prefer safety over price for a car.

The consumer’s personal car’s service station is in the city vicinity.

HYPOTHESIS 2

To identify the target demographic of the car segment in Karjat.

A household income of over INR 10,000 either has a car or desires a car

Car owners finance their cars.

A joint family will have at least one car.

A car owner will also have a two wheeler in the household

HYPOTHESIS 3To analyze the influence of various car advertisements on

consumer buying preference.

The purchased car decision is being influenced by Friends and Family.

Price is the key feature that the consumer recalls in car advertisements.

RESEARCH DESIGN

What is study about? Evaluate the customer buying preference and target market of small car segment in Karjat city. Where it was done? Karjat

For what period of time will it be done? January 2014

Method of? Descriptive

RESEARCH DESIGN

DATA COLLECTION METHODS

Need Of Data Collection

To get information for analysis To get idea about real time situation For comparison between two situations.

Primary Data

Primary data – data collected for the first time. It is the real time data collected by the researcher

himself.

Surveys Focus groups Questionnaires Personal interviews Experiments and observational study

Primary Data - Examples

Secondary data – data someone else has collected. These are usually in journals, periodicals, dailies,

publications etc

Secondary Data

Secondary Data - Examples

Commercial research Internet Government publication International publication Books and newspaper

SAMPLE DESIGN

All items under consideration any field of inquiry

constitutes a “universe” or “population”

and

Selected items are known as sample and selection

procedure is known as sample design

STEPS IN SAMPLE DESIGN

•Types of universe•Sampling unit•Source unit•Sample size

•Sampling procedure

TYPES OF SAMPLE DESIGN

• Probability sampling technique1. Simple random2. Systematic3. Stratified4. cluster• Non-probability sampling technique1. Snowball2. Judgemental3. Quota

ANALYSIS

FAMILY INCOME

Valid 100

Missing 0

4.84

5.00

N

Mean

Median

Statistics

Family income

Frequency PercentValid

Percent

Cumulativ

e Percent

Upto

100000

3 3.0 3.0 3.0

Rs.10000

1-200000

3 3.0 3.0 6.0

Rs.

200001-300000

13 13.0 13.0 19.0

Rs.

300001-500000

25 25.0 25.0 44.0

Rs.

500001-700000

23 23.0 23.0 67.0

Rs.

700001-1000000

10 10.0 10.0 77.0

Rs.

1000000 and above

23 23.0 23.0 100.0

Total 100 100.0 100.0

Family income

Valid

Gender

Gender

Frequency PercentValid Percent

Cumulatve Percent

Valid F 12 12 12 12M 88 88 88 100Total 100 100 100

88%

12%

AGE

Frequency Percent

25-30

Years

25 25.0

31-35

Years

26 26.0

36-40

Years

26 26.0

41-45

Years

23 23.0

Total 100 100.0

Valid

Valid 100

Missing 0

2.47

2.00

Age

N

Mean

Median

Statistics

23%

26%

25%

26%

THE CONSUMER’S OWNED CAR’S SERVICE STATION IS

IN THE CITY VICINITY

N Y

Count 41 1 42

% within Car

owned

97.6% 2.4% 100.0%

% within

Service Station

51.3% 5.0% 42.0%

% of Total 41.0% 1.0% 42.0%

Count 39 19 58

% within Car

owned

67.2% 32.8% 100.0%

% within

Service Station

48.8% 95.0% 58.0%

% of Total 39.0% 19.0% 58.0%

Count 80 20 100

% within Car

owned

80.0% 20.0% 100.0%

% within

Service Station

100.0% 100.0% 100.0%

% of Total 80.0% 20.0% 100.0%

Total

Service Station

Total

Car

owned

N

Y

Car owned * Service Station Crosstabulation

FEMALES PREFER SAFETY OVER

PRICE FOR A CAR

SAFETY Total

Gender F 2 12

M 17 88

Total 19 100

Gender * Buying Influence Crosstabulation

PRICE IS THE MOST IMPORTANT FACTOR IN

SELECTING A CAR

Buying Influence * Gender Cross tabulation

Gender Total

F M

Buying Influence

BRAND

Count 0 16 16

% within Buying Influence 0.0% 100.0% 100.0%

% within Gender 0.0% 18.2% 16.0%

% of Total 0.0% 16.0% 16.0%

FEATURES

Count 2 8 10

% within Buying Influence 20.0% 80.0% 100.0%

% within Gender 16.7% 9.1% 10.0%

% of Total 2.0% 8.0% 10.0%

MILEAGE

Count 1 15 16

% within Buying Influence 6.2% 93.8% 100.0%

% within Gender 8.3% 17.0% 16.0%

% of Total 1.0% 15.0% 16.0%

PRICE

Count 7 31 38

% within Buying Influence 18.4% 81.6% 100.0%

% within Gender 58.3% 35.2% 38.0%

% of Total 7.0% 31.0% 38.0%

SAFETY

Count 2 17 19

% within Buying Influence 10.5% 89.5% 100.0%

% within Gender 16.7% 19.3% 19.0%

% of Total 2.0% 17.0% 19.0%

SERVICE

Count 0 1 1

% within Buying Influence 0.0% 100.0% 100.0%

% within Gender 0.0% 1.1% 1.0%

% of Total 0.0% 1.0% 1.0%

Total

Count 12 88 100

% within Buying Influence 12.0% 88.0% 100.0%

% within Gender 100.0% 100.0% 100.0%

% of Total 12.0% 88.0% 100.0%

CONSUMERS PREFER PETROL CARS OVER DIESEL CARS

Gender * Fuel Preferrence Crosstabulation

Fuel Preferrence Total

C D P

Gender

F

Count 3 6 3 12

% within Gender 25.0% 50.0% 25.0% 100.0%

% within Fuel Preferrence 18.8% 9.7% 13.6% 12.0%

% of Total 3.0% 6.0% 3.0% 12.0%

M

Count 13 56 19 88

% within Gender 14.8% 63.6% 21.6% 100.0%

% within Fuel Preferrence 81.2% 90.3% 86.4% 88.0%

% of Total 13.0% 56.0% 19.0% 88.0%

Total

Count 16 62 22 100

% within Gender 16.0% 62.0% 22.0% 100.0%

% within Fuel Preferrence 100.0% 100.0% 100.0% 100.0%

% of Total 16.0% 62.0% 22.0% 100.0%

THE PURCHASED CAR DECISION IS BEING

INFLUENCED BY FRIENDS AND FAMILY

Frequency PercentValid

Percent

Cumulativ

e Percent

Friends & family 35 35.0 35.0 35.0

TV

Advertisement

37 37.0 37.0 72.0

Radio

Advertisement

9 9.0 9.0 81.0

Newspaper

Advertis ing

13 13.0 13.0 94.0

Others 6 6.0 6.0 100.0

Total 100 100.0 100.0

Buying Influencers

Valid

A HOUSEHOLD INCOME OF OVER INR 3,00,000 EITHER HAS

A CAR OR NOT

Count 12 1 13

% within

Family income

92.3% 7.7% 100.0%

% within

Car owned

28.6% 1.7% 13.0%

% of Total 12.0% 1.0% 13.0%

Count 11 14 25

% within

Family income

44.0% 56.0% 100.0%

% within

Car owned

26.2% 24.1% 25.0%

% of Total 11.0% 14.0% 25.0%

Rs.

200001-300000

Rs.

300001-500000

Family income * Car owned Crosstabulation

CAR OWNERS FINANCE THEIR CARS

Car owned * Financing Crosstabulation

Financing Total

N Y

Car owned

N

Count 42 0 42

% within Car owned 100.0% 0.0% 100.0%

% within Financing 59.2% 0.0% 42.0%

% of Total 42.0% 0.0% 42.0%

Y

Count 29 29 58

% within Car owned 50.0% 50.0% 100.0%

% within Financing 40.8% 100.0% 58.0%

% of Total 29.0% 29.0% 58.0%

Total

Count 71 29 100

% within Car owned 71.0% 29.0% 100.0%

% within Financing 100.0% 100.0% 100.0%

% of Total 71.0% 29.0% 100.0%

A JOINT FAMILY WILL HAVE AT LEAST

ONE CAR

N Y

Count 12 20 32

% within

Family structure

37.5% 62.5% 100.0%

% within

Car owned

28.6% 34.5% 32.0%

% of Total 12.0% 20.0% 32.0%

Joint

Family

Car owned

Total

N Y

Count 17 20 37

% within Family structure

45.9% 54.1% 100.0%

% within Car owned

40.5% 34.5% 37.0%

% of Total 17.0% 20.0% 37.0%

Car owned

Total

Nuclear Family

A CAR OWNER WILL ALSO HAVE A TWO WHEELER IN THE

HOUSEHOLD

Scooter/M

otorcycle Colour TVRefrigerat

or Total

Count 11 12 10 42

% within Car owned 26.2% 28.6% 23.8% 100.0%

% within Product

ownership

47.8% 50.0% 35.7% 42.0%

% of Total 11.0% 12.0% 10.0% 42.0%

Count 12 12 18 58

% within Car owned 20.7% 20.7% 31.0% 100.0%

% within Product

ownership

52.2% 50.0% 64.3% 58.0%

% of Total 12.0% 12.0% 18.0% 58.0%

Count 23 24 28 100

% within Car owned 23.0% 24.0% 28.0% 100.0%

% within Product

ownership

100.0% 100.0% 100.0% 100.0%

% of Total 23.0% 24.0% 28.0% 100.0%

Car

owned

N

Y

Total

Thank You