Study On Luxury Car Segment In

India

Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce

Under the Faculty of Commerce

Submitted By
PALAK SANJAY JAIN
Roll Number: 18190619

Under the Guidance of

Dr. Neelam Arora

M.Com Part-2
Semester- 3

LALA LAJPATRAI COLLEGE

OF COMMERCE & ECONOMICS
Accredited ‘A’ Grade by NAAC
Lala Lajpatrai Marg, Mahalaxmi, Mumbai – 400 034

Certificate

This is to certify that Ms. Palak Sanjay Jain has worked and duly completed her
project work for the degree of Master in Commerce under the Faculty of
Commerce in the subject of Management and her project is entitled, “A Study on
the Luxury Car Segment in India” under my supervision. I further certify that the
entire work has been done by the learner under my guidance and that no part of it
has been submitted previously for any Degree or Diploma of any University.
It is her own work and facts reported by her personal findings and investigation.

Seal of the college

Signature of Guiding Teacher: Name:

Date of submission:

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 Declaration by Learner

I, the undersigned Miss Palak Sanjay Jain hereby declare that the work embodied
in this project work titled “A study on the Luxury Car Segment in India’ from
my own contribution to the research work carried out under the guidance of Dr.
Neelam Arora Mam is a result of my own research work and has not been
previously submitted to any other University for any other Degree or Diploma to
this or any other University.
Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.
I, hereby further declare that all the information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

Name and Signature of the Learner:

Certified by

Name and Signature of Guiding Teacher:

Certificate Examiner

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I hereby certify that the work which is being presented in M.Com Internal
Project Report entitled “Study On Luxury Car Segment In India”, in partial
fulfilment of the requirements for the award of the Master of Commerce in
Management and submitted to the Lala Lajpatrai College of Commerce &
Economics, Mahalaxmi, Mumbai – 400 034 is an authentic record of my own
work carried out under the supervision of Dr.Neelam Arora. The matter
presented in this Project Report has not been submitted by me for the award of
any other degree elsewhere.

Signature of External Examiner with name and Date:

Signature of Internal Examiner with name and Date:

Signature of supervisor/ Guide teacher with name and Date:

Signature of the student with name and Date:

College Stamp
Principal

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 Acknowledgment

To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance
to do this project.
I would like to thank my Principal, Dr. Neelam Arora for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator Dr.S.Lasune, for his moral
support and guidance.
I would also like to express my sincere gratitude towards my project guide Dr.
Neelam Arora mam, whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference
books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.

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 INDEX

CHAPTER NO 1 INTRODUCTION Pages 6-19

CHAPTER NO 2 RESEARCH METHODOLOGY Pages 20-24

CHAPTER NO 3 LITERATURE REVIEW Pages 25-44

CHAPTER NO 4 DATA ANALYSIS, INTERPRETATION AND

PRESENTATION Pages 45-58

CHAPTER NO 5 CONCLUSIONS AND SUGGESTIONS Pages 59-60

BIBLIOGRAPHY Pages 61-62

ANNEXURE Pages 63-69

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 CHAPTER 1: INTRODUCTION

Luxury vehicle is a marketing term for a vehicle that provides

luxury-pleasant and decent desirable features beyond strict necessity
at increased expense. The term suggests a vehicle with greater
equipment, performance, construction precision, comfort, design
ingenuity, technological innovation or features that convey brand
image, cachet, status, or prestige or any other feature or combination
of features. Automobile manufacturers market specific makes and
models that are targeted at particular socio-economic classes, and
thus "social status came to be associated more with a particular
vehicle than ownership of a car per se”. Therefore, automakers
differentiate among their product lines in “collusion” with the car
buying public.

While a high price is the most frequent factor, it is "styling,

engineering, and even public opinion which cars had the highest and
lowest status associated with them."Every era in automobile history
has had "a group of car marquees and models that have been
expensive to purchase, due to their alleged superiority of their design
and engineering”. Aimed at wealthy buyers, such automobiles might
be generically be termed luxury cars."This term is also used for
unique vehicles produced during "an era when luxury was
individualistic consideration and coachwork could be tailored to an
owner like a bespoke suit." Although there is considerable literature
about specific marquees, there is a lack of systematic and scholarly
work that analyzes the luxury car phenomenon itself.

Though widely used, the term luxury is broad and highly variable. It
is a perceptual, conditional and subjective attribute and may be
understood differently by different people: What is a luxury car to
some may be 'ordinary' to others

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 1.1 Characteristics

Luxury cars tend to offer a higher degree of comfort than their

mainstream counterparts.
The various characteristics of luxury cars are:

● The important characteristics include genuine leather upholstery and

polished wood grain look dashboards.
● The luxury cars now a day have traditionally emphasized more on
comfort and safety.
● Luxury vehicles are also a status symbol for consumption.
Contemporary luxury cars also offer higher performance and better
handling.
● New safety technologies and comfort amenities, such as anti-lock
brakes, electronic stability control and DVD entertainment systems,
before they trickle down to mass market cars. Numerous "smart car"
features are largely only found in luxury cars as of
2009.

Automobile marquees like Mercedes, BMW, and Jaguar have almost

never adopted front-wheel drive and retained a line-up mostly or
entirely made up of rear-wheel drive. They have few variants with
four wheel drive to cater to a select performance driven segment of
customers.

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1.2 Growth of the luxury automobile sector-

India, the world's second-fastest growing auto market, is in top-gear

growth. The country is a hot destination for automobile
manufacturers due to its robust economic growth, favorable
demographics, higher disposable income, changing lifestyle and
positive industrial eco- system. India is expected to become the third
biggest automaker in the world within the next decade.

The various reasons for the growth of luxury cars 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 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
has further given boost to the market of luxury car in India.

• The government has regulated many policies 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:

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• 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 has 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.

1.3 Objectives of study-

The research objective is a statement, in a precise terminology as

possible of what information is needed. The research objectives
should be framed so that obtaining the information will ensure that
the research purpose is satisfied. In India, the sky is bright for the
luxury car makers. . The Indian consumers’ inclination for owning a
luxury car shots up the demand for such cars for the past few months.
Many car companies are now introducing cars in the luxury car
segment to attract new customers.

The various objectives of the studies are as follows:

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● To determine the scope of luxury cars in India.

● Growth opportunities of luxury cars in India.

● To identify and analyze the factors influencing the purchase of cars.

● To determine the demographic variables of the customers of different

brands of cars

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PROFILE OF LUXURY CAR SEGMENT IN INDIA:
THE THREE COMPETING LUXURY CAR BRANDS
IN INDIA

Major luxury cars in India- Mercedes-Benz, BMW and Audi put together
have around 85% market share.
The German car brand Mercedes-Benz had first mover advantage as it had
started operations in India in 1995 and there was no direct competition in
this category. So, it remained ‘Numero Uno’ as a luxury car brand in India
for more than a decade. But, market dynamics have changed significantly
after the entry of BMW in 2006 followed by Audi in 2007.The overall
market share of luxury cars has been reorganized due to the new entrants.
This has resulted in new equations being forged amongst the various
players, driven primarily by a rapidly swelling millionaire-club having
diversified choices and preferences.

In 2006, BMW had 9% market share which has now grown to 42%,
catapulting BMW as the number one luxury brand in terms of sales. Audi
which started its operations in 2007 has had the fastest growth-rate
amongst the three and has now captured 20% of the luxury car market. So,
the Indian Luxury Car market is favourable for new entrants who are
capable of grabbing the untapped opportunities by following the
customer-oriented approach and having the ability to induce demand by
innovation at each level of marketing mix. To get a deeper understanding
of the scenario we need to develop into the competitive strategies of these
three brands.

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A) BMW and Mercedes-Benz-

Mercedes-Benz India Limited was established in November 1994 as a joint

venture between Daimler-Benz AG and erstwhile Telco (presently, Tata
Motors). It has traversed a long journey starting with the launch of one
of the most successful models worldwide –the Mercedes-Benz E Class
(W124) in March 1995.Mercedes India, now known as DaimlerChrysler
India Private Ltd. has a state-of-the-art fully equipped manufacturing unit
in Pune. Mercedes-Benz is known for providing the Indian customers,
latest models and technology following strict quality standards. The
company considers India as one of its most promising markets. The
Mercedes- Benz C Class and Mercedes-Benz E Class cars are locally
manufactured while the Mercedes-Benz SL-Class cars are imported as
completely built units (CBUs). The company offers S-Class, E-Class, C-
Class, M Class, CLS-Class, SLK-Class, CL-Class and the Maybach.

German Major BMW entered in India in 2006. The company with

headquarters in Gurgaon and production unit in Chennai had initial
investment of 1.1 billion rupees. It has swiftly developed both
infrastructure and dealership network. The production plant at Chennai,
established in 2007, has an annual capacity of 3000 units in a single shift
and it produces BMW 3 series and BMW 5 series sedans. The rest of
models- BMW 7 series, X3 and X5 are imported as CBUs. BMW 3 and 5
series account for 80% of the total sales of company in India, of which
BMW 5 series has the highest sales. BMW India, with its aggressive
marketing, fast expansion of product profiles, strategic dealership location
selection and supplementary financial service offering, has managed to
wrest biggest market share from Mercedes-Benz. BMW and Audi, both
focus on sportier features and new launches to encourage young buyers.
Decrease in the average age of luxury car buyers is a favourable condition
for this kind of selling strategy.

In the Indian scenario, where 75% of passenger cars and 60% of luxury
cars are purchased through financing, financial supplementary support is
critical to the success of the car makers. Taking this into account, BMW

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Group is planning to introduce BMW Financial Services India, which will
provide services to BMW customers, providing financing facilities to fleet-
owners and commercial-financing to their dealers. Discounting older
models is another successful strategy applied by the company. It is also
planning to launch ‘Pre-Owned Car Sales Program’ in 2010. BMW’s 5-
year coverage (after sales) is another attractive factor compared to the 2-
year warranty provided by Mercedes-Benz.

In the Indian scenario, the luxury cars are generally chauffeur-driven. This
trend has been well-imbibed by BMW as it has focused more on back-
seat facilities during designing and marketing. The company
has been focusing on some other technologies like Integral Active-
Steering, Park Distance Control (PDC) and Head-up Display (X5) for
providing enhanced features for comfort in the Indian driving conditions.
BMW has been acting very swiftly in identifying its dealership locations
so as to achieve maximum sales volume aligned. BMW with 15 dealership
locations (two locations in Delhi and Mumbai) competes with Mercedes-
Benz having 32 dealership locations because it has strategically expanded
its dealership network to higher demand luxury car markets. In next phase
BMW is planning to target emerging tier 1 and 2 cities like Jaipur and
Lucknow to compete with Mercedes whose 25-30% sales revenue comes
from tier 2 cities.

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B) Latest and Fastest- Audi AG

Audi India started operating in 2007 by establishing its own sales company
in Mumbai. The company started production of Audi A4 in November
2007, followed by Audi A6 in 2008 in its Aurangabad plant. Rest of the
models- Audi A8, Audi Q5 and Q7, Audi TT and super speed racing car
Audi R8 are imported as CBUs. Audi invested significant lying and
building, marketing the product qualities and improving after sales
services in India. Audi offers technology with composure and agility to
current techno affluent Indian youth. Known for its technology, luxury and
style, this German car maker has received five different awards by Indian
auto media. Audi’s commitment to innovative and sophisticated design is
widely endorsed by car buyers. One of the reasons of Audi’s global
success is its ability to identify potential markets for expansion. The
company selected India as its second production site after China.

The local production provides Audi, ability to cater customer needs in a

cost effective manner. Audi is always a first choice of techno-geeks who
want to get more involved during the drive. Besides being the fastest
growing luxury brand in India, Audi regularly brings new models and
variants of existing models to surprise the car lovers. Audi Q5 is the most
endorsed imported sports utility vehicle (SUV) in India. The company
followed the same dealership location strategy as BMW by selecting
similar sales regions of high demand (four dealership locations in northern
and central regions Delhi, Gurgaon, Chandigarh and Ludhiana) at 13
locations country-wide.
Due to these efforts, Audi has rapidly captured market in India and has
exerted considerable pressure on the other dominant players. The company
noticed a 65% jump in sales (200 cars) in May 2010 compared to May
2009 (121 cars). Both Audi and BMW have focused in the world class
music system facility and ultra-luxury looks in their models. Luxury car

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 segment is going to change as there are many new cars lined-up for launch
during the period 2010-2012 with approximately 50 to 60 new models
from major global brands. The market futures will not only be driven by
product itself but also services associated with it. So it would be a war of
biggies, competing on diverse parameters. Automobile market will be
noticing a great shift but as the previous pattern of market shows, the only
mantra of success will be a holistic approach aligned to the company’s
brand image and customer oriented vision.

HISTORY OF THE 3 LUXURY CAR BRANDS (BMW,

MERCEDES BENZ, AND AUDI)

A) BMW- Bayerische Motoren Werke AG

Although BMWs current fame and reputation as one of the greatest

automobile manufacturers can be mostly linked to models produced in the
last two decades, the history of the marquee stretches back almost 90 years
and contains numerous achievements that have established it as a
benchmark.
BMW stands for Bayerische Motoren Werke AG or Bavarian Motor
Company. The company was established in 1913 and based in Munich,
Germany. It started out as an aero engine manufacturer, hence the
company logo. The logo is comprised of four quadrants of alternating
white and blue color. It is a stylized representation of an airplane propeller
spinning against the clear blue sky. The logo represents a white propeller
blade against a blue sky. It reflects the origins of BMW as a maker of
military aircraft engines during WWI. Also, white and blue are the
traditional colors of Bavaria.

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B) MERCEDES –BENZ

The Mercedes-Benz logo is one of the most famous brand logos in the
world. The Benz logo is a simplistic three-pointed star that represents its
domination of the land, the sea and the air. The famous three-pointed star
was designed by Gottlieb Daimler to show the ability of his motors for
land, air and sea-usage. It was first seen on a Daimler in 1909, and was
combined with the Benz laurel wreath in 1926 to signify the union of the
two firms. Mercedes- Benz is the world’s oldest automobile manufacturer.

The company’s founders, Gottlieb Daimler and Carl Benz, continued to

make automotive history following their invention of the automobile in
1886. As an automotive pioneer, Daimler and its employees are committed
to excellence and act responsibly towards society and the environment, to
shape the future of safe and sustainable mobility with groundbreaking
technologies and high-quality products.

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C) AUDI AG

Audi AG is a German Automobile Manufacturer that designs, engineers,

produces, markets and distributes luxury vehicles. Audi is a member of the
Volkswagen Group and has its roots at Ingolstadt, Bavaria, Germany.
Audi-branded vehicles are produced in nine production facilities
worldwide.
The origins of the company are complex, going back to the early 20th
century and the initial enterprises (Horch and the Audiwerke) founded by
engineer August Horch; and two other manufacturers (DKW and
Wanderer), leading to the foundation of Auto Union in 1932. The modern
era of Audi essentially began in the 1960s when Auto Union was acquired
by Volkswagen from Daimler-Benz. After relaunching the Audi brand with
the 1965 introduction of the Audi F103 series, Volkswagen merged Auto
Union with NSU Motorenwerke in 1969, thus creating the present day
form of the company.
The company name is based on the Latin translation of the surname of the
founder, August Horch. "Horch", meaning "listen" in German, becomes
"audi" in Latin. The four rings of the Audi logo each represent one of four
car companies that banded together to create Audi's predecessor company,
Auto Union. Audi's slogan is Vorsprung durch Technik, meaning "Being
Ahead through Technology". However, Audi USA had used the slogan
"Truth in Engineering" from 2007 to 2016, and have not used the slogan
since 2016.[11] Audi, along with fellow German marques BMW and
Mercedes-Benz, is among the best-selling luxury automobile brands in the
world.

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EXECUTIVE SUMMARY

The luxury car market in India has registered a fair amount of growth in
the last few years and is growing at a 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 takers in the Indian automobile market. Almost every sector is
eyeing India as a potential investing hub, and automobile sector is no
exception. Besides being still a developing country, it shouldn’t be a
surprising fact that Indian ranks world number 3 in terms of the number of
millionaires. This era of development in India has been at its best, despite
recession, strong fundamentals of Indian economy have managed to post a
decent GDP growth last year.

Increase in disposable income of the people has led to a different lifestyle.

Now, the mindset of Indian consumer is a lot different. Previously, Indian
consumers used to check the prices of everything they bought. Now, the
consumer looks at the experience of the company during the buying
process. More than price, Quality matters. This paradigm shift has also
changed the way companies look at India. Slowly and steadily the luxury
car market which was in a very nascent condition in India, is now counting
on big revenues from the country’s customers.

Of late, there had been a steep increase in the luxury car market. Year 2009
recorded a whopping 25% growth in the luxury car market. It would be
news for many of us that India ranks number 1 in exporting automobile
components. The German machines which have fame all over the world
use components which are imported from India.New entrants like
Volkswagen are going to heat up the competition even more. Currently the
fight is in between BMW and Mercedes. Despite being a late entrant in the
Market, BMW has been successful in capturing a considerable amount of
market share. But, this fight between just two companies is not going to
stay for long as new players are entering the Indian market.

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This increased demand for luxury cars, is not something that spurt all of a
sudden. Gradual development of the Indian economy and the increased
disposable income has influenced people to make a status symbol with
respect to their cars. Luxury sedans are available from the price range of
Rs. 20 lakhs – 30 lakhs which are mostly preferred by the first time buyers
in this segment. The achievers, who adapt to the latest happening and like
to be dominant, are always quick in buying the heavy priced sedans.

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 CHAPTER 2: RESEARCH METHODOLOGY

2.1 SCOPE OF STUDY

Defining the scope of the research or research boundaries ensures the

desired precision or accuracy of the result .It is aimed to study the luxury
car market and its scope in India. The main focus of the project is to study
the growth of cars like BMW, MERCEDES BENZ and AUDI. It also leads
to identify and understand the scope and growth opportunities of luxury
car brands in India.

Nowadays, car has become a necessity and forms a part of life. Therefore,
there is a significant scope to examine the perception and purchase
behavior of the consumers of cars. Knowledge of the buying behavior of
the different market segments helps a seller to select their target segment
and evolve marketing strategies to increase the sales. The scope of this
research has a very good future in India.

2.2 RESEARCH METHODOLOGY

A research process consists of stages or steps that guide the project from
its conception through the final analysis, recommendations and ultimate
actions. The research process provides a systematic planned approach to
the research projects and ensures that all aspects of the research projects is
consistent with each other. This chapter aims to understand the research
methodology establishing a framework of evaluation and revaluation of
primary and secondary research. The techniques and concepts used during
primary and secondary research. The techniques and concepts used during
primary research in order to arrive at findings which are also dealt with
and lead to a logical deduction towered the analysis and results.

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 The research process has 4 distinct yet interested steps for research
analysis:
1. Formulation of problem
2. Collection of data
3. Making sampling plan
4. Research limitation

2.2.1 Formulation of problem

I propose to first conduct intensive primary research and secondary
research to understand the full impact and implication of the luxury car
industry, to review and critique the industry norms and reports on which
certain issues shall be selected which I feel remain unanswered or liable to
change this shall be further taken up in the next stage of exploratory
research.
Each step is viewed as a separate process that includes a combination of
task, step, and specific procedure. The steps undertaken are logical,
objective, systematic, reliable, valid, impersonal and ongoing.

2.2.2 Collection of data

The collection of data is done by exploratory research.

Exploratory research

The methods I used for exploratory research are as follows:

1) Primary data-The primary data was collected by getting some
questionnaires filled by the customers.
New data gathered to help solve the problem at hand. As compared to

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 secondary data which is previously gathered data. An example is
information gathered by a questionnaire.
Qualitative and quantitative data are newly collected in the course of
research. Consist of original information that comes from people and
includes information gathered from surveys, focus groups, independent
observation and test results. Data collection took place with the help of
filing questionnaires. The questionnaire method has come to the more
widely used and economical means of data collection. The common factor
in all varieties of the questionnaire method is the reliance on verbal
responses to questions, written or oral. I found it essential to make sure the
questionnaire was easy to read and understand to all spectrums of people
in the sample. The questionnaire administration would not take more than
4-5 minutes. The data was collected by interacting with 40 respondents
who filled the questionnaires and gave me the required necessary
information. The respondents consisted of housewives, students,
businessmen, young executives, professionals etc. The required
information was collected by directly interacting with these respondents.

2) Secondary data- Secondary data is being collected by through internet,

various websites.
Some articles on the research topic were also taken into consideration.
There are two types of secondary data: internal and external secondary
data. A secondary source of data used consists of books and websites.

2.2.3 Making sampling plan

It is a description of the characteristics of that group of people from whom

a course is intended. It attempts to describe them as they are rather than as
the describer would like them to be. Also called the audience the audience
to be served by our projects includes key demographic information (i.e.
age, sex, etc.). The target population is the population I want to make
conclusions about.

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 2.2.3.a Sample size
This involves figuring out how many samples one needs. The sample size
in this research is 50.

2.2.3.b Area of sampling

The area of sampling of this research was Mumbai, India.

2.2.3.c Sampling technique

A Simple random sample is a group of subjects (a sample) chosen from a

large group (a population). Each subject from the population is chosen
randomly and entirely by chance, such that each subject has the same
probability of being chosen at any stage during the sampling process. This
process and technique is known as simple random sampling and should not
be confused with random sampling.

2.4 Research limitations-

This study conducted has the following limitations:

● The scope of the research study is Mumbai.
● So the population considered may not be the actual representative of the
population of the nation.
● The information given by the respondents can be biased.
● Frequency of usage, in the question that asks for highly consumed brand.

2.5 Tabulation of Data

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The data has been presented in the form of pie charts and diagrams in
chapter no 4 based on a Questionnaire which is attached at the end of the
project.

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 CHAPTER 3: LITERATURE REVIEW

3.1 Brand Personality-

A brand is “a set of expectation and association evoked from a company or

product. A brand is how your key constituents- customers, employees,
shareholders etc. experience what you do.” Some brands are of such great
importance to people, that we speak of them as a part of one’s life and
identity, being used to express one. Some would say that these brands have
their own personality, the brand personality, which can be defined as “the
set of human characteristics associated with a given brand”. Thus, it
includes such characteristics as gender, age and socioeconomic class, as
well as such classic human personality is both distinctive and enduring.
Brand personality refers to the set of human characteristics we associated
with the brand. A common way of determining this is to reply on the
metaphor: “If the brand was a person, what would he/she be like?” we then
list and group the traits to describe the brand as, for example: caring,
approachable and trustworthy.

3.2 Creation of brand personality-

Brand personality traits are formed and influenced by any direct or indirect
contact that the consumer has with a brand. A brand, unlike a person,
cannot think, feel or act. A brand has no objective existence at all, it's
simply a collection of perception on the minds of the consumer.
Consumers accept the marketing actions to humanize brands. Indirectly,
the brand personality is created by all the elements of the marketing mix.

Betra, Lehman and Singh suggest that the personality of a brand is created
over time, by the entire marketing mix of the brand- its price (high or low,
odd or even), retail store location (imaginary association), and product
form (solid/liquid.etc) benefits, packaging details (color, size, material,
shape), symbol used in all phases of the brand communication, sales
promotion, and media advertising”

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 One of the advantages of the brand personality is that based on their
distinctive personalities, consumers are able to differentiate between
brands. Another advantage is that the consumer can interpret the brands
image in such a way that it is personally more meaningful. Thus the
consumer put more efforts in creating and using the brand personality. A
further advantage of brand personality is that life is given to a brand.

By vitalizing a brand, another perspective of brand personality can be

examined, namely the role of a brand as a relationship partner in a
consumer brand relationship. Next we will concentrate on these consumer
brand relationships, whether the brand is a product or a company, the
company has to decide what personality traits the brand is to have. There
are various ways of creating brand personality. One way is to match the
brand personality as closely as possible to that of consumers or to the
personality that they like.

The process will be:

a) Define the target audience
b) Find out what they need, want and like
c) Build a consumer personality profile
d) Create the product personality to match that profile

3.3 Brand personality of cars-

Are you what you drive? That is what are companies seem to be asking
and in the same breath trying to convince you about. In other words, are
you the Hyundai accent owner who commands immediate respect
wherever she goes (including from the potential father-in- law) or are you
the suave executive from the Chevrolet advertisement who is ever ready to
share a moment with loved one?

With a plethora of new models in the market, and generic benefits (such as
space or fuel efficiency) of a particular car segment hardly a distinguishing
factor between car models, marketers are increasingly differentiating on
the emotional pay-off a particular car model/brand provides to the

26
customer. This, of course, varies from segment to segment and also on
how long a particular model has been in the market. For instance, while
advertising for entry level or smaller cars tends to focus more on the
rational or functional benefits of the vehicles, the differentiations is
increasingly on the emotional benefits when it comes to high end cars.

Generally, it has been seen as one moves up the value chain, the
differentiation is more on the emotional pay-off. People buy cars as an
extension of their personality rather than just features. A car, in India, helps
build up social esteem value. The advertising would also vary according to
the segment which one is targeting. For instance, the Chevrolet Optra
advertisement (which depicts a young husband driving his wife to see the
moon on the occasion of Karva Chauth) shows an Optra consumer as
someone who believes in family values and indulging loved ones. We find
that typically profile of an Optra consumer is someone who is in the age
group of 35-45years and has a chauffeur. He buys a car not only for
himself but also for the family and tries to make up for not being able to
spend enough time, by indulging loved one.
The positioning goes well with the companies catchline of- “for a special
journey called life”. High end car maker Skoda Auto too, through its
advertising, attempts to connect with its consumers on an emotional level.
“A car is an extension of the personality and our advertising shows the
consumer to be youthful, image-conscious and even bit a macho. The
campaign jointly made by Skoda’s marketing department and Ad agency
IB & W not only communicate the quality of the brand but an appreciation
for the finer things in life. The target Skoda consumer is a SEC A1,
primarily male, businessman or someone in the senior management, “says
Shashank Vaid, manager (marketing), Skoda Auto India. Surely, image
building does come higher in the consumer’s scheme of priorities when
buying a new car than ever before.
The importance of brand image has risen sharply in the last few years. At
the segment level, the increase in importance is greater for the mid-size
cars, indicating the relevance of brand among the more expensive market
segments. The manufacturer needs to focus more on how consumers
perceive them as offering exciting cars and being committed towards them.
Contemporariness of models has a big impact on purchase decision. The
perception of the car in terms of its performance and design, quality, sales,
after sales, cost of ownership, apart from brand image, all impact upon the
purchase decision.”

27
Brand image is not driven by good advertising alone but is significantly
impacted upon by the cars performance and design, quality, and the cost of
ownership. Among the three, product quality has the highest correlation
with brand image. Small car buyer seeks capability in advertising, and fuel
efficiency is relatively more important to them.
Technology, innovation, and good performance influence premium mid-
size buyers. One reality for us in India is that the market is extremely
price/value conscious. While making purchases based on above, there is
rationalised, which does have an impact on the decision on a particular
make and model of car. Be it rational or an emotional decision, consumers
would have to think as a bevy of new models flood the Indian market.

28
 A STUDY ON THE LUXURY CARS CHOSEN BY ME

(Citation- Overdrive- October 2019 edition pg no, 98-100.

Auto car- September 2019 edition pg no 138-141)

A) BMW

BMW, the manufacturer of world-famous Rolls-Royce cars, has officially

entered the Indian car market.

BMW India was set up as a sales subsidiary in Gurgaon in 2006 to

spearhead the formation of its dealer network, and followed it closely by
setting up a state-of-the-art assembly plant in Chennai in January
2007.BMW AG, or Bayerische Motoren Werke AG, was initially a
German aircraft engine manufacturing company. In 1919, they turned to
land vehicle engines, and in 1927 built their first BMW car
christened BMW 3/15. For the greater part of the past century. BMW
Cars hassled the world in creating cars for the rich. Exceptional
design concept and elegance has always been a part of the BMW
cars.BMW Cars in India put innovation, intelligence and technology to
ensure the safety and driving comfort of its proud owners. BMW India
competes with its rivals by exhibiting powerfully performing vehicles and
having a slight edge over the others.

BMW CARS FALLING IN THE LUXURY CAR SEGMENT

A.1 BMW 3 SERIES

29
 The smallest of the BMWs in India, the 3 series is a highly competent
entry-level luxury sedan. As is the case with all cars from the Bavarian
Marquee, the 3 series is a car that packs in superb performance with high
end features. With a unique BMW design, the 3 series comes with 4 engine
options- the inline 4 320i, inline 6 325i, inline 6 330i and the inline 4 320d.
Equipped with iDrive multimedia technology, perfect handling steering
precision and power packed performance, the 3 series is to be experienced
to be believed. The 3 series is an exquisite sports sedan available in both
Petrol and Diesel Variants It falls in the Luxury Segment. The exterior
exudes confidence and a powerful flow of expression.The individual
exterior details display elegance that reveals themselves subtly to the eyes.
The 3 series with its petrol and diesel variants targets the upper middle
class and the rich indian consumer with BMW cars having a price range
from Rupees Forty One Lakhs.

Prices of BMW 3 series

BMW 3 Series Car Price List – luxury car from BMW

MODEL VARIANT EX-

SHOWROO
M PRICE
EFFECTIVE
7 OCT, 2019

The all-new 320d Sport Rs 41,40,000

BMW 3
Series

The all-new 320d Luxury Rs 46,90,000

BMW 3 Line
Series

The all-new 330i M Sport Rs 47,90,000

BMW 3

30
Series

31
B) Mercedes Benz

Mercedes-Benz officially came to India in 1994 in collaboration with Telco .

Traditionally, Mercedes-Benz cars have consistently catered to wealthy,
rich,and super-rich consumers. The manufacturer's name keeps on changing,
but Mercedes-Benz cars remain Mercedes-Benz, for the Mercedes-Benz
name has a greater brand relationship with world consumers than their
manufacturer’s current corporate name - Daimler-Benz, Daimler-Chrysler, or
Daimler AG. Popular Mercedes Benz sedan car prices range between around
rupees twenty-nine lakhs to Mercedes-Benzes at a bit above one crore thirty
lakhs rupees.

Mercedes Benz presence in India

Mercedes-Benz has been associated with India for more than 50 years.
Presently, Mercedes-Benz India’s engagement in India covers several
domains:
a) Local production of Mercedes-Benz cars
b) Making available imported Mercedes-Benz cars
c) Commercial Vehicle operations
d) Global sourcing of auto components

Social Involvement of Mercedes-Benz

Mercedes-Benz is also involved with social-oriented programs across India
like:
a) Biofuel from Jatropha’
b) Road safety project for children

32
c) Automotive education, etc.
d) Captive automotive technology research and development

Mercedes-Benz India has been delighting customers with strong brands and
a wide range of products equipped with the latest in automotive technology.
The company has been the pioneer of the luxury car segment in India with its
inception way back in 1995. It is the only luxury car maker in India to have
such a wide range of cars.

The different ranges available today are-

● C-Class,
● CL-Class
● CLS-Class
● E-Class Saloon
● E-Class Coupe
● E-Class Cabriolet
● GL-Class
● M-Class
● R-Class
● S-Class
● SL-Class
● SLK-Class
● Maybach.

B.1 Mercedes-Benz C-Class

Mercedes Benz (Sedan) The C Class Sedan is the entry level sedan in the
luxury segment. The C class is a signature statement of the refined and the

33
upwardly mobile. The Mercedes Benz C-Class with its petrol and diesel
variants targets the upper middle class consumer with Mercedes-Benz car
prices beginning from Rupees Forty Lakhs

The Mercedes-Benz C-Class is an entry level luxury car in the Indian

market. Direct competition to the BMW 3 Series and Audi A4, the C-Class
has remained as the elegant choice amongst the cars. Solid built, classic good
looks and well appointed interiors are synonymous with the brand and this is
what drives customers to this car. Available in a choice of trim levels and
petrol and diesel engine options, the C-Class is a definite way to announce
that you have indeed arrived in life. Adding to this, The C-Class now comes
in with a panoramic sunroof, Attention Assist and a host of other features.

34
Pricing of Mercedes Benz C Class

Variants Ex-
show
room
Price
C 200 Prime Rs.
40,10
,000
C 200d Prime Rs.
40,4
0,10
0
C 200 Rs.
Progressive 45,1
2,45
0
C 200d Rs.
46,7
Progressive
3,25
0
C 300d AMG Rs.
Line 49,7
4,75
0
Merc-AMG Rs.
C43 4Matic 75,0
Coupe 0,00
0
Merc-AMG C Rs.
63 S 1,38,
78,1
29

35
C) Audi-

The famous 'Four Rings' of Audi are symbolized on its badge. It has ruled
German roads since 1932, though Audi began manufacturing in 1899. The
four rings of the Audi badge symbolize four pioneer car manufacturers of
Germany: Audi, DKW, Horch and Wanderer. Audi AG came from
amalgamating these companies in 1932. Audi cars symbolize status and
prestige for Audi consumers worldwide, and for Audi consumers Audi Cars
are more work-of-art than simple super efficient machines.

An Audi car is a statement of who-you-are. Audi is regarded as a symbol of

class, elegance and luxury. Audi India began operations in 2007 as a
division of Volkswagen Group Sales India Pvt. Ltd. based in Mumbai. Audi
cars in India are fully imported or assembled at the Aurangabad plant of
Skoda Auto. Audi India is projecting its cars to the Indian elite as the best
luxury cars to match their status. Audi cars are starting to fire the fancy of
the rich Indian consumer and the upper middle class with their current
range of Audi A4, Audi A6, Audi A8, and Audi Q7 cars . Audi India is
expanding the network of Audi dealerships across Indian metros. Popular
Audi models begin from Rupees Thirty Lakhs onwards.

36
C.1 Audi A4-

The 2012 Audi A4 ranks 3 out of 21 Upscale Midsize Cars. This ranking is
based on our analysis of 29 published reviews and test drives of the Audi
A4. With its sharp interior and exterior styling, available all-wheel drive
and good fuel economy, the 2012 Audi A4 is a viable alternative to more
costly rivals. Frequent comparisons are drawn to rivals such as the BMW 3-
Series, which test drivers often consider to be the benchmark for
performance within the class. Many say that the Audi A4 may ultimately
suit drivers better in the real world. “The A4 may be best in class, period,”
writes Automobile Magazine. “Purists and weekend racers will rightfully
stand behind the better-balanced BMW 3-series, but for the majority of
buyers looking for German driving dynamics, great design, and good fuel
economy, this may be the best bet.

37
 Pricing of Audi

MODEL VARIANT EX-SH

SHOWROO
M PRICE

Audi A4 30 Premium Plus Rs 4,149,000

TFSI

Audi A4 30 Technology Rs 4,507,000

TFSI

Audi A4 Premium Plus Rs 4,339,000

35TDI

Audi A4 Technology Rs 4,696,000

35TDI

38
 CONSUMER BEHAVIOUR TRENDS

(Citation -Consumer Behavior- Leon G. Schiffman and Leslie Lazar Kanuk, Ninth
Edition, Pearson Education)

In the past, prestige was due to real financial distance. At heart, luxury is
about exclusivity. Today, given the rise in purchasing power, luxury
consumption is no longer reserved for the few. This is a time in history when
the affluent masses are no longer at a financial distance from luxury. But
prestige and exclusivity has to be driven by distance – except this distance is
no longer financial, but intellectual and cultural. A better way to look at the
trends that exist in this market is to segregate them into categories, namely
the marketing mix trends (product, price, place, promotion) and consumer
behaviour trends.

1. Cognition to emotion-

The Indian consumer today, is influenced more by the affective components

than by the cognitive elements. In the case of Mercedes Benz, the company
communicates the strong relationship of the car with status, snob value and
image. In the case of Audi, the company communicates sleek design and so
on. However, it is no longer necessarily true that customers will take the
cognitive route while purchasing a luxury car. Customers may view
Mercedes Benz, Audi and BMW as parity cars (equivalents) based on
cognition, and make the final choice based on the effective route.This is
where the trend takes us. The luxury brands have taken this affective route
and try to evoke emotion through style and design. A report says that
Mercedes Benz sold 3000 cars in India in 2007, but is expecting a drop in

39
 sales this year because Audi and BMW have entered the Indian market with
more stylish cars and the consumers’ feelings towards these cars are
extremely positive.

1.1 Splurge for ‘special’-

The most important day for an Indian is his/her marriage, a ceremony which
has for long seen people spending for the special day without hesitation.
Given that the day belongs to the bride and the groom, people are
increasingly demanding the most splurge-able items that there can be; a
term now synonymous with luxury cars. That is why increasingly rental
companies are purchasing Mercedes and its likes because there is an
increasing demand for the same from the “marriage market”. This trend shall
continue with enhanced demand, as the demand for the demand for these
cars for ‘special occasions’ will penetrate the middle income categories in
the country.

2. “Its mine” concept-

For a consumer who chooses his house and his workplace, the car (which is
probably his most prized possession) will not remain something he can’t
choose for long. The future trends would witness customized luxury cars
entering the Indian market.

4P Trends-

2.1.1 Product

Each of the companies started off in India with only 1-2 cars. Audi started
with A4, BMW with BMW 3 series and Mercedes with C220 and D250.
Mercedes started its operation in India in 1996 and then slowly BMW and
Audi came in. The cars were imported as completely built units. And the

40
indigenisation was initially very less to the tune of 2.5 to 3%. At present; the
range of cars which a company provides in India is almost equal to its full
global portfolio. Also, companies started their production units in the
country. Audi started its production in Aurangabad and Mercedes has started
it long ago in Pune. The company brings in the cars as knocked down units
and assemble them in India, thus saving substantially on the cost of the
125% import duty of import of luxury cars. Also the indigenization of the
cars has increased from 2-3 % to more than 60-70 %.

2.1.2 Price

The cars launched by Mercedes, BMW and Audi were in the range of Rs 20-
30 lakhs in the mid 90s, a price range which was synonymous with extreme
luxury. Today, not only has the range expanded to approximate the global
portfolios, there has been a massive play with the floor and ceiling prices of
luxury cars which is now Rs 40 lakhs to almost a crore. The ultra luxury
segment hasn’t made an inroad in India, but there have been a few sales per
year.This has prompted companies like Rolls Royce, Bentley and Maybach
to enter India.

2.1.3 Place

In the past, the luxury car companies only had 1-2 dealers in the metros,
majorly Mumbai and Delhi. Now with the demand coming in, not only from
the metros but also the smaller Tier 2 cities, the numbers of dealerships have
gone up substantially and the companies are trying to expand as fast as
possible. Also, since the cars were imported, the spare parts delivery wasn’t
so good. The lead time required to get a spare part was quite high. Today
companies understand that the luxury consumer is a very demanding
customer and is very particular about taking care of the car. With the

41
 expansion of the dealership network in the country, the problem of the spare
part delivery gets better. Now the companies have a chance to build customer
loyalty through total customer satisfaction.

2.1.4 Promotion

From what used to be a minimal level of presence in Indian Auto Expos,

luxury automobile companies are increasingly moving towards melding with
the suave consumers:

a) Studio BMW in the corporate heart of National Capital Region with a

purpose of capturing share of heart

b) Participation in fashion weeks and photo exhibits e.g. -Audi, Porsche and
Volkswagen actively participate in various fashion Events across the country.

c) Product placement in Bollywood movies, with the recent Audi R8 placement

in the movie “War”

d) Association with lifestyle sports e.g.– Audi organizing the Audi Quattro cup
in India, associating with golf and motorsports as well as Mercedes being a
dominating team in F1 which goes to show its efficiency in making powerful
cars.

42
 2.1.5 Moving forward-

Although the growth in the luxury automobile segment is compared to the

recent Chinese markets, the forces shaping the development are quite
different in India and China. If China’s starting point was a slate wiped clean
by Mao, India’s is a chalkboard covered with myriad traditions, religious
beliefs, colourful festivals, a there-but not-there caste system – all sewn
together into a vocal democracy.

If the task in China was to fill a near vacuum, in India luxury brand have to
find a way to blend in with the milieu of local traditions. For the same, we
develop a 7-point framework for seamlessly capturing India’s growing
fascination with luxury consumption:

a) Respect: Connect with luxury consumers as a selective target. Luxury

brands need to respect this point of difference in all interactions between the
brand and the consumer.

b) Segment: Acknowledge luxury consumer subsets. Luxury brands need to

identify, differentiate and prioritize the most profitable subsets for targeted
strategies.

c) Insight: Identify what is important to the defined target. Motivations could

be based on personal and non-personal factors.

d) Connect: Assess which brand interactions really matter. For example, friends
and family are an important influence on luxury consumption in India.

e) Experience: Establish emotional connectivity. Deep and meaningful

relationships need to be developed in order to win the ‘soul’ of the luxury

43
 consumer.

f) Indianness: Embrace and celebrate the ‘Indianness’ brand. India has a very
powerful and unique identity, and this needs to be leveraged within a luxury
brand context.

g) Consistency: Adopt a truly holistic approach, to ensure that all brand

interactions, whether advertising or customer service, are consistent with the
brand positioning.

Consumer Behaviour consists of all human behaviour that goes in making

purchase decisions. An understanding of the consumer behaviour enables a
marketer to take marketing decisions which are compatible with its
consumer needs. There are four major classes of consumer behaviour
determinants and expectations, namely, cultural, socioeconomic, personal
and psychological. The socio-economic determinants of consumer behaviour
consist of age, marital status, occupation, education, income, family size
etc .Realizing the importance of passenger car industry in the present
economic situation, the researcher has analyzed the perceptions, and
behaviour of consumers related to this product. It is rightly said; yesterday’s
luxuries are today’s necessities. Hence in this digital world, car is no longer a
luxury. From the discussions made in the previous chapters, there are certain
product attributes which are identified in the study as influencing the
purchase decision and satisfying the consumers. The growth in the
population of India and the increasing number of middle class consumers has
attracted the attention of car manufacturers and marketers. The
manufacturers and marketers who study the behaviour of consumers and
cater to their needs will be successful. It may be concluded that consumer
behaviour has a greater role to play in the LPG era of economic activities for
which a necessary survey and research should be conducted in an efficient
manner.

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

44
 4.1 Primary data collection-
The data was collected through questionnaires from 50 customers. The collected
data are going to get analyzed here by using tables and charts like pie charts and
bar diagrams. Further, the inferences are being made from the collected data.

QUESTIONNAIRE

Q.1 GENDER

Male 36 54%
Female 26 46%

45
Q.2 AGE

18-25 56 90.3%
25-35 2 3.2%
35-45 2 3.2%
45-55 2 3.2%
55+ 0 0%

46
Q.3 OCCUPATION

Business 13 21%
Professional 4 6.5%
Entrepreneur 4 6.5%
Student 41 66.1%

47
Q.4 CHOOSE THE CAR BRANDS OF WHICH YOU OR YOUR FAMILY
OWN A CAR

QUESTION COUNT
Audi 6 10.2%
Bentley 4 6.8%
BMW 14 23.7%
Honda 35 59.3%
Hyundai 21 35.6%
Jaguar 7 11.9%
Mercedes-Benz 11 18.6%

48
Q.5 WHAT DO YOU MEAN BY LUXURY CARS?

QUESTION COUNT

Expensive cars 2 3.1%

Good looking cars 5 8.1%
Feature rich cars 12 19.4%
All of the above 43 69.4%

49
Q.6 WHY DOES ONE PURCHASE A LUXURY CAR?

Quality 10 16.1%
Exclusivity 22 35.5%
Flaunt Value 7 11.3%
Personal Interest in cars 23 37.1%

50
Q.7 WHAT IS THE MOST EFFECTIVE FACTOR WHILE PURCHASING A
LUXURY CAR?

Engine power 17 27.4%

Acceleration 4 6.5%
Looks 22 35.5%
Car brand 16 25.8%
Price 3 4.8%

51
Q.8 WHO WOULD MOST PROBABLY BUY A LUXURY CAR?

HNI (High Net Worth Individuals) 25 40.3%

Entrepreneurs 7 11.3%
Businessmen 28 45.2%
Professionals 2 3.2%

52
Q.9 WHAT ARE THE SOURCES OF INFORMATION ABOUT A LUXURY
CAR?

Television 17 27.4%
Newspapers 9 14.5%
Product Demos 13 21%
Existing Users 23 37.1%

53
Q.10 ACCORDING TO YOU, WHICH CAR BRAND IS SUPERIOR?

Mercedes-Benz 19 30.6%
BMW 7 11.3%
Audi 5 8.1%
Jaguar 31 50%

54
Q.11 DO YOU FEEL THE EXCLUSIVITY FACTOR OF BMW, MERCEDES
BENZ AND AUDI IS STILL PRESENT?

YES 39 66.1%
NO 20 33.9%

55
Q.12 IS THE LATEST ENTRANT, JAGUAR, A THREAT TO THE TOP 3?

Yes 43 72.9%
No 16 27.1%

56
4.2 SECONDARY DATA COLLECTION

Secondary data is data collected by someone other than the user. Common
sources of secondary data include censuses, surveys, organizational records
and data collected through qualitative methodologies or qualitative research.
The recent growth in the luxury car market in India is much more than mere
market dynamics in a particular car segment. It is a reflection of the
changing lifestyle of the affluent class in the country. In India, the luxury car
segment (Average Price 25-30 Lakh) has been growing at an average rate of
20% or above during recent years; it seems to be least affected by the
global financial crisis. During the worst recession period when the world was
facing low market demand trends, Indian luxury car segment grew at 23 %
t o 6 , 6 7 1 vehicles according to the Society of Indian Automobile
Manufacturers (SIAM) despite a 0.5% decline in passenger car sales, to
11.04lakh vehicles (April-December 2008 Report). But financial year ended
March 2010 has shown growth of automotive sector up by 25 % t o 1 5 . 2
6 lakh vehicles . This indicates an optimistic sign of recovery of sector.
While the Indian auto industry is expected to grow at 1 7 % t o 1 9 % o n
an average , sales of luxury and super - luxury cars are expected to grow
exponentially. Luxury car segment accounts only for 3-4% of total car sales
in India. But what lures the international majors is the fact that this segment
is growing at 25%-plus (2009sales), much higher than 15- 17% growth
registered by the small passenger car segment over the past few years. This
growth of luxury car sales is driven majorly by increased wealth-creation
within average Indian population and the desire of individuals to join the
millionaire-club by flaunting their wealth . Growth of Indian economy has
been faster than other emerging economies during recent times. Globally,
India had the highest growth-rate (22.7%) of millionaire population during
the year 2007. India added 23,000 millionaires from 2006 to2007, taking
total figure to around 123,000 millionaires; wealth as measured in US
Dollars ( Merrill Lynch CapGemini Report ) . However , during a recession
, the country faced a decline of 31.6% in number of millionaires. But post-
recession recovery was much faster compared to other economies. These

57
numbers are expected to grow up to 1,40,000 by the year 2010. This
robust growth in the number of millionaires in the country, being one of
the highest globally, paves the way for further growth of the luxury car
market. In addition, the average age of an Indian millionaire has come down
to 35-40 years from the earlier average of 50 years. An increasing number of
young entrepreneurs and professionals from various fields are buying luxury
cars and this affluent segment has been boosting sales volumes. If we look
into city wise wealth distribution, the northern region in India( comprising of
cities like Delhi, Chandigarh, Ludhiana, Shimla, Jalandhar) comprises a
higher density of millionaire population than the rest of the parts. This region
therefore has the highest luxury car sales. After this come, Greater Mumbai,
Ahmedabad, Pune, and Chennai.

These cities have luxury car sales pattern which is still higher compared to
the rest of the country. The historical regional sales data of luxury cars sold
in India, shows that 32-35% of the total are sold in Delhi region only. This is
possibly due to the psychological preference shift among the North Indian
population to show off their wealth. Delhi is followed in this list by Mumbai,
and Punjab state, where Ludhiana and Jalandhar are at the top two slots.
Delhi also happens to be the biggest market for Mercedes-Benz, Mumbai
ranks second followed by the states of Gujarat, Karnataka, Tamil Nadu and
Punjab. This geographically distributed population could be clustered into
classes on the basis of overall behavioral patterns observed in luxury brand
consumers.

58
 CHAPTER NO 5 - CONCLUSION

The advancing demand of luxury cars across the globe represents a

promising trend to the growth of the automobile industry. The rising
demand of luxury cars in India is a sign of people getting richer day by day
as well as their desires are also increasing and there is also an increase in
the spending power of the customer which shows that the economy of India
is also developing at a fast rate. There has been a 200 % growth in the
automobile industry in India, especially in the luxury segment and the sports
car segment. Due to which European luxury car makers are introducing most
of their sports cars models in India due to the rising demand and interest of
the people.

Increase in disposable income of the people has led to a different lifestyle.

Now, the mindset of Indian consumer is a lot different. Previously, Indian
consumers used to check the prices of everything they bought. Now, the
consumer looks at the experience of the company during the buying process.
More than price, Quality matters. This paradigm shift has also changed the
way companies look at India. Slowly and steadily the luxury car market
which was in a very nascent condition in India, is now counting on big
revenues from the country’s customers. Of late, there had been a steep
increase in the luxury car market. Year 2009 recorded a whopping 25%
growth in the luxury car market. It would be news for many of us that India
ranks number 1 in exporting automobile components. The German machines
which have fame all over the world use components which are imported
from India. New entrants like Volkswagen are going to heat up the
competition even more. Currently the fight is in between BMW and Merc.
Despite being a late entrant in the Market, BMW has been successful in
capturing a considerable amount of market share. But, this fight between just
two companies is not going to stay for long as new players are entering the
Indian market.

The luxury car segment in India has been growing at a CAGR of 30%, for

59
the past decade.But this year the rate would not be able to touch double
digits. Rise in excise duty, depreciation of the rupee and the rising petrol
prices, are some of the factors driving consumers away. Luxury cars, account
for less than 2% of India’s 2.2 million car market, grew by just 9% in the
first six months of 2017 with sales of around 12,000 units. In 2018, the
premium segment recorded sales of 23000 units. The industry had expected a
sales of 30000 units. This year in the month of May, this segment recorded a
negative growth, the first time in the last seven years. Analysts however
expect the Indian luxury car market to cross 50,000 units annually in the next
5 years from now. The basic attribution of this demand can be given to the
rising number of High Net Worth Individuals (HNI’S) in India. The HNI
population in India stands at 1.5 million. The HNI Index in india is growing
at around 15% to 16% per year. Though after the stock market crisis a good
chunk of HNI’s have been erased. Many experts also feel that with
increasing number of BMW, Audi, Mercedes-Benz on the indian roads,
somewhere the exclusivity factor associated with these brands has gone
down and hence, many customers who have the money between 1 CR and 5
CR- to spend and want exclusivity, are looking at brands like Aston Martin,
Ferrari and Lamborghini, to the desired exclusivity they want out of the
purchase. India being home to around 4% of the world’s billionaires the
market for super premium segment looks bullish. The Indian premium car
market (experts opinion) would take another 3-4 years to mature and in the
meanwhile the real competition would be fought in the 30 lakhs to 1 crore
segment in India.

60
 BIBLIOGRAPHY

A. Bibliography books

1. Marketing management – Philip Kotler, Tenth Edition, Prentice Hall India

2. Methodology of research in social sciences – Dr. O.R. Krishnaswami & Dr. M.

Ranganatham, First Edition, Himalaya Publishing House.

3. Consumer Behavior- Leon G. Schiffman and Leslie Lazar Kanuk, Ninth Edition,
Pearson Education.

4 Consumer Behavior- Leon G. Schiffman and Leslie Lazar Kanuk, Ninth Edition,
Pearson Education.

5. Overdrive- October 2019 edition pg no, 98-100.

6. Auto car- September 2019 edition pg no 138-141.

61
B) Websites

1. Gathered information related to the growth of luxury car segment in India from-
www.wikipedia.com.

2. www.bmw.com/india.

3. www.mercedes.com/ India.

4. www.audi.com/india.

62
 ANNEXURE

A set of questionnaire:
Name*-

Q1) Which Age group is most interested in buying Luxury cars?*

a) 18-24
b) 25-34
c) 35-44
d) Above 55

Q2) Rank the following parameters on your purchase preference?*

a) Price
b) Quality
c) Availability
d) Involvement
e) Recommendation

Q3) Does purchase of Luxury is car directly related to income level?*

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a) Yes
b) No

Q4) Why does one person purchase a Luxury Brand?*

a) Quality
b) Flaunt value
c) Interested in art
d) Exclusivity

Q5) What quality of Luxury cars is more superior to others?*

a) Strongly agree
b) Agree
c) Neutral
d) Disagree
e) Strongly disagree

Q6) What are the services provided by luxury brands is better than
others ?*
a) Strongly agree

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b) Agree
c) Neutral
d) Disagree
e) Strongly disagree

Q7) What is the factor the effect most while purchasing a car?*

a) Engine power
b) Shape
c) Acceleration time
d) Looks
e) Brand

Q8) What are the sources of information?*

a) Television
b) Newspaper
c) Personnel sources
d) Product demos
e) Sales representatives
f) Experienced users

Q9) What are the general factors influencing purchase decisions of the

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 customers?*

a) Style

b) Comfort

c) Mileage

d) Price Colour

Q10) What is the customer’s opinion on style for purchasing luxury

cars?*

a) Highly influenced
b) Influenced
c) Less influenced

Q11) What are customer’s opinions about comfort for purchasing

luxury cars?*

a) Highly influenced
b) Influenced
c) Not influenced

Q12) Choose the correct brand of which you or your family own a car?
*

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a) Audi
b) Bentley
c) Bmw
d) Honda
e) Hyundai
f) Jaguar Land Rover
g) Mercedes Benz
h) Rolls-Royce

Q13) Who would most probably buy a luxury car?*

a) HNI
b) Entrepreneurs
c) Businessmen
d) Professionals

Q14)According to you, which brand is superior?*

a) Mercedes Benz
b) BMW
c) Audi
d) Jaguar

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 Q15) Do you feel the exclusivity factor of BMW, MERC and AUDI is
still present?*

a) Yes
b) No

Q16) Is the latest entrant, Jaguar, a threat to the top 3?*

a)Yes
b) No

Q17) What is the purpose of buying decision of customers for luxury

cars?*

a) Official
b) Personal

Q18) What is the opinion of customers about after sales service for
luxury cars?*

a) Highly influenced
b) Influenced
c) Neutral

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d) Less influenced
e) Not influenced

Q19) What are customer opinions about product features for luxury
cars?*

a) Highly influenced
b) Influenced
c) Not influenced

Q20) What are customer’s opinions about technology for luxury cars?*

a) Highly influenced
b) Influenced
c) Not influenced

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