Automobile Industry in India Essay

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Market Segmentation Analysis

The automobile industry is the fastest growing sector in India. Growth in consumption patterns has encouraged tremendous improvement in manufacturing sector and the auto industry has been growing at a rapid pace recording "over 2.06 million four-wheelers (passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps), and over 9 million two-and-three wheelers (scooters, motorcycles, mopeds, and three wheelers) - in 2006-07." (SBH India, 2008)

But since there is no special segmentation technique, we can only segment the market on the basis of size and price of automobiles. There are yet to emerge more sophisticated techniques involving psychographics and other behavioral parameters. Following are some of the available segments in the automobile sector:

Utility cars and other off-road vehicles: examples: Maruti Gypsy, Mahindra Armada, Tata Sumo. Tata Nano

Economy segment is one where cars are priced at less than $13,000 and examples include Ambassador, Premier Padmini, Maruti 800.

3. Luxury segment is small and comprises vehicles with prices from $13,000 to $30,000 and examples include Maruti Zen, Premier 118NE, Contessa, Maruti Esteem, Tata Sierra,

4. Super-luxury segment, (not many locally manufactured cars found) high in price.

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Higher than $30,000. Mostly foreign brands like Mercedes-Benz, BMW, Audi.

There is also a wide gap between regions within between. We can segment the market into four main regions, i.e. North, South, East and West. North has the largest share in the auto purchase with 43% market share, west has 27%, south 22% while east is the lowest with 8% share.

India consumers are still economy driven and highly price conscious. For this reason, the largest car segment comprises the compact and mini passenger cars which accounts for 81.8% of total sales of cars. The table below was taken from GAIL research on the subject and it shows the various segments in the automobile industry in India.

The following table comes from GAIL INDIA RESEARCH

Segment-Wise Division of the Indian Car Market

Mini

Compact

Mid-Size….....

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