Market Study-Luxury Car Market in India

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4ps analysis of luxury car makers in India

Transcript of Market Study-Luxury Car Market in India

8/1/2012

MARKET STUDY OF LUXURY CARS IN INDIA

Marketing Assignment |

Index1. Introduction 2. History 1

Luxury car segment in India

Introduction:India has always been a small car market. But in past few years Indian Auto Industry is growing at an alarming pace. The demand for luxury cars has risen. Now every major luxury car maker is trying to make its base in India. Few of them like BMW, Audi, Mercedes Benz, Jaguar, and Rolls Royce have already set up their base in India. For the past few years BMW has been the leader in sales among these car makers. Mercedes Benz was the first company in luxury car segment to target India. But slowly other major car makers started functioning in India. Now BMW has become the number one in luxury car segment, in terms of sales. Rise of BMW is attributed to its India specific strategies, like having price range starting from 23 lakhs, youthful design. The customer profile has changed in this segment. Be it real-estate boom or increase number of high profile executives or increase in number of entrepreneurs, purchase of luxury cars has always been treated as symbols of status, independence, power, and recognition. The recent growth in this segment is a reflection of changing lifestyle of affluent class in India. Luxury car market accounts for only 3-4% in India, but the segment has been growing at compounded annual growth rate (CAGR) of around 30% for last 3-4 years. Due to high CAGR companies are getting attracted towards India. F1 racing coming to India also symbolizes the increase in attraction towards luxury/premium cars. Companies are gearing up to flaunt the ever increasing Indian Market where the demand for luxury and premium cars has increased over the years. The fact is highlighted by the introduction of ultra-luxury brands like Audi A8, Mercedes Benz SL-class, BMW 7 series, Jaguar XJ, Aston Martin DB9, and many more.

AudiAudi is a German car manufacturer company. Audi is known worldwide for high-quality and innovative luxury cars. It is amongst the most admired premium automobile brands. The success of Audi is attributed to its pioneering concepts in domain of advanced technology and design.

History:The Birth of Audi: The credit of Audi AG goes to August Horch- a pioneering figure in automobile engineering. In 1899 he started a company in Cologne, with name Horch & Cie Motorwagen Werke. In 1909, due to indifference with Board of Management and Supervisory Board he left the company and started a second company in Zwickau named- Audi Automobilwerke. The Audi brand made its name due to its victorious involvement in sporting events worldwide. In 1932, Audi merged with Horchwerke, Wanderer and Dampf-Kraft-Wagen (DKW) to form Auto Union AG. It was headquartered in Chemnitz. The emblem consisted of four interlocking rings symbolizing the inseparable unity of the four companies. All the companies retained their brand names. Each company was assigned a specific market segment: DKW- motorcycles and small cars; Wanderer- midsize cars; Audi- deluxe midsize segment cars; and Horch- luxury car segment. After the end of World War II, Auto Union AG was encroached by Soviet forces. Many senior executives departed to Bavaria, where a new company-Auto Union GmbH- was founded in 1949. The emblem of four rings was retained. In 1965, a new era began with production of four-stroke engine vehicles under brand name Audi. The same year Auto Union was acquired by Volkswagen Group. Audi 100 was the first car launched under the Audi brand name.

Audi India: Audi entered Indian market in 2004. In March07, Audi established its own sales company in India. Audi has established a production unit in Aurangabad, Maharashtra. Audi is assembling Audi A4, Audi A6 and Audi Q5 in Aurangabad. Apart from these cars, Audi is importing Audi A8, Audi A8L, Audi Q7 and Audi R8 to Indian market.

Identity of Audi- Slogan and LogoAudis logo consists of four interlocking rings. Each ring represents one of the founder companies- Horch, Audi, DKW and Wanderer. Audis Ad slogan- Vorsprung durch Technik was given by Sir John Hegarty. The slogan means advancement through technology. Audi had to fight a legal battle to extend slogans trademark protection.

USP:Luxury and style: Sporty design, durability of car body. Technology: Quattro four-wheel drive system, e-tron concept.

Mercedes Benz

History:The history of Mercedes Benz is linked to two people- Gottlieb Daimler and Carl Benz. The inventions of high-speed engines and automobiles enabled them to lay down foundations of two enterprises. In October 1883 Carl Benz founded Benz & Cie in Mannheim and in November 1890 Gottlieb Daimler founded Daimler-Motoren-Gesellschaft (DMG) in Cannstatt. Soon the names Benz and Daimler became trademark for origin and quality of engines and vehicles. The trademarks of Benz remain unchanged; except in 1909, the logo of

Mercedes changed from cog wheel to a laurel wreath surrounding the name Benz. The brand name of Daimler-Motoren-Gesellschaft was changed to Mercedes and the trade name got registered on 26th September1902. Mercedes was the name of Emil Jellinecks 10 year daughter. DMG opted to use the Mercedes to honour the contribution of Emil in sales of cars and engines. During the inflation period after World War I, merger of DMG and Benz & Cie took place in 1924. The purpose of the merger was to standardize design, production, sales, and advertising. During this period both the companies worked as individual entities but marketed jointly. In June 1926, the two companies merged to form Daimler-Benz AG. The products were trademarked as Mercedes-Benz. Mercedes Benz India: Mercedes Benzs association with India is more than 50 years old. Various engagements involve local production of cars, making available imported MercedesBenz cars, research and development centre, and global sourcing of auto-components.

Identity of Mercedes-Benz: Slogan and LogoMercedes Benz logo is a three pointed star surrounded by a circle. The concept of star came from a symbol Gottlieb Daimler used above his own house. The three-pointed star symbolizes universal motorizationthe ambition of Daimler. Driven by Innovation. Designed for life is the slogan of Mercedes-Benz.

BMW

History:The origin of BMW is attributed to Gustav Flugmaschinefabrik and Karl Friedrich Rapp. Gustav owned a company to build small aircrafts. In 1913 Karl founded Rapp Motoren Werke in the suburbans of Munich. The company used to produce airplane engines. But these engines suffered from excessive vibrations. Later they secured a contract with Austro-

Daimler and produced engines under license. In 1916, Rapp left the company due to financial troubles. Two Scotsman- Franz Josef Popp and Max Friz- took over the company. Later they merged Rapp Motoren Werke with Gustavs company to form Bayersiche Flugzeunwerke. It was later renamed as Bayersiche Motoren Werke (Bavarian Motor Works). The company manufactured aircraft engines during the period 1917-19. After the Treaty of Versailles, the company started producing airbrakes for railway cars. In 1923, the company started the production of motorcycles. It was branded as R32. In 1928, they started the production of cars at Eisenbach factory under license. From 1932 onwards they started producing real cars- cars designed by their engineers and not based on some other car.

BMW India: It is a subsidiary of BMW group. It is headquartered in Gurgaon. In Chennai, BMW has established a manufacturing facility. Models of BMW 3 series, 5 series and 7 series along with BMW X1 are assembled in Chennai facility.

Identity of BMW: Slogan and LogoThe logo of BMW was trademarked in the year 1920. The logo is based on the circular design of aircraft propeller. BMW chose Bavarian national colours as the logo which resembles rotating aircraft propeller. Slogan- The ultimate driving machine.

Products:Audi:Audi is one of the leading manufacturers of cars in the premium and supercar segments. The company operates through nine production plants located in eight countries, those being Germany, Belgium, Slovakia, China, Spain, Italy, Hungary, and India. The company manufactures cars under six brands: Audi, Skoda, Lamborghini, Seat, Bentley, and Volkswagen. The company is also engaged in manufacturing of engines for Audi brand, for other Volkswagen companies, and for third-party customers.

Sedans

Coupes

Audi CarsMINI

Compacts Sports Cars

ConvertiblesStation WagonsDifferent models available in India: A4, A6, A7, A8, R8, RS 5, Q3, Q5, Q7, and TT. BMW: BMW has production plants in 25 sites in 14 countries. BMW manufactures cars and bikes.

Rolls-Royce

BMW Brands under BMW Group

Husquvarna

Cars are manufactured under three different brand names- BMW, MINI and Rolls-Royce. Rolls-Royce, and BMW 7 series and Z4 series are considered as super-luxury cars. Various Models available in India: 3 series, 5 series, 7 series, X1, X3, X5, Z4.

Mercedes-Benz: Daimler AG produces cars, trucks, buses, and coaches under the brand name Mercedes-Benz. It has manufacturing/assembling sites in 22 countries. Cars are divided in different categories:

Roadster

AutomobilesRoadster: SL class, SLK class. SLK class.

SUVs Coupe Hatch-back Sedan

SUV: G class, GL class, GLK class, AND M class. Coupe: C class, CLS class, E class, S class. Various models available in India: B class, C class, CLS class, E class, GL class, S class, and

Price:Audi: The prices of various Audi models are as following: Model Audi Q3 Audi Q7 Audi RS5 Audi A8 Audi A4 Audi A7 Audi A6 Audi Q5 Audi R8 Price 2621000 5679060 7459000 7653000 2733000 8853000 4117221 4507000 13249000

Mercedes-Benz: The prices of various Mercedes-Benz models are as following: Mod