Pre Owned Cars and Bikes

68

EXECUTIVE SUMMARY

The aim of marketing is to meet and satisfy the needs and wants of the customers. India has long-term potential to become a significant vehicle market. It has huge population of nearly one billion people (of which 150-250 million are middle class), and a current vehicle population of 3.5 million (equivalent to only 3.4 cars per 1000 people).

Prior to the early 90s there were only four car companies manufacturing and selling cars in India. Foreign investment was effectively banned and foreign technology transfers were subject to government approvals. By 1993 the Indian government delicensed the Indian car industry, which eased other foreign auto manufactures entry into the market first under joint partnerships, then wholly owned subsidiaries. Currently, India is in the midst of an economic-recovery where vehicle sales rose 47 percent to 73,000 units in March 2000, up from 49,410 units in March 1999.

Indian auto market is booming the auto manufacturers from all over the world are attracted by indian market for both,manufacturing and sell cars to indian and export market.

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2. INTRODUCTION TO THE TOPIC

Title of the project

"Analysis of the Pre-owned car market in Mumbai Maruti True Value"

ANALYSIS OF THE CAR MARKET IN INDIA

The automotive industry is one of the largest industries worldwide and in India as well. The automotive sector drives upstream industries like steel, iron, aluminum, rubber, plastics, glass and electronics, and downstream industries like advertising & marketing, transport and insurance.

The automotive industry can be divided into five sectors:

Passenger CarsMulti-Utility Vehicles (MUVs)Two-WheelersThree-WheelersCommercial Vehicles-Light Commercial Vehicles (LCVs) / Medium & Heavy Commercial Vehicles (M&HCVs) Tractors

Despite a head start since its beginning in the 1940s, the Indian automotive industry has been moving at a slow pace mainly due to the all-pervasive regulatory atmosphere prevailing till recently. Moreover, the industry was considered low-priority as cars were thought of as unaffordable luxury for the masses.

In the post-liberalization period the passenger car sector witnessed a boom, owing to economic vibrancy, changes in government policies, increase in purchasing power, improvement in lifestyles, and availability of car finance. The industry was deregulated in 1993, and many companies, both Indian and foreign (Daewoo, Ford, General Motors, and DaimlerChrysler), entered the market. However, the smooth sailing was disrupted in the last quarter of 1996. The automotive industry, which contributed substantially to the industrial growth in FY1996 failed to maintain the same momentum between FY1997 and FY1999. The overall slowdown in the economy and the resultant slowdown in industrial production, political uncertainty and inadequate infrastructure development were some of the factors responsible for the slowdown in the automotive industry.

While the passenger car segment, with the launch of many new models, posted positive growth rates in FY 2000 and FY 2001, the upturn was rather brief. In FY2002, the automotive sector especially the passenger car segment continued to reel under the pressure of over-capacity with low demand. FY2003 witnessed a healthy growth in the passenger car sales with the pick up in the economy. The passenger car sales in the first half of FY2004 were also buoyant.

However, the contribution of the automobile sector to industrial output, number of cars per person, automobile sector employment as a percentage of industrial employment, number of months' income required to purchase a car, and penetration of cars are quite low. Low demand and lack of vision on the part of the OEMs and policymakers stunted the Indian automobile industry. However, major car manufacturers worldwide foresee future demand in India. The regulatory environment has been liberalized and demand has picked up. Global OEMs who enjoy scale economics both in terms of manufacturing and research and development have entered the Indian market, leading to a shift in the business operations of suppliers, assemblers and marketers.

Key Demand Drivers

Disposable income was perceived as the key factor driving passenger car demand. But over time, other factors included the need for greater mobility, non-availability of public transport services, availability of cheap finance, development of the used-car market, introduction of new technologically superior models, increasing levels of urbanization, and changing consumer profiles.

Market Characteristics

Product Penetration

The penetration of passenger cars in India stood at five per thousand persons as against 27 for two-wheelers in 2000. Significantly, the Indian figures are lower than even those for economies like Indonesia (14 and 62). The relatively high penetration of two-wheelers in India reflects the population's need for mobility and their limited affordability.

Automotive Penetration (vehicles in use per thousand persons)*

Passenger Cars

Two wheelers

USA

478

14

United Kingdom

373

12

Japan

395

115

Germany

508

36

China

3

8

Indonesia

14

62

South Korea

167

59

India

5

27

Market Segmentation

Considering that affordability is the most important demand driver in India, the domestic car market has been segmented on the basis of vehicle price till SIAM introduced the length-based2 classification of passenger cars since FY2003. The automobile industry in India is still concentrated around the mini and the compact segments which together account for around 81.8% of the automobile market in terms of units sold in FY2003.

Demand Projection for Passenger Cars

FY2003(Actual)

FY2004(Forecast)

FY2007(Forecast)

CAGR

Passenger car sales

611715

666248

838845

8%

Domestic Sales

Increased affluence, wider selection and the ready availability of car loans is driving the Indian car market through the roof. During the last five years (2000-05), the production of passenger cars in India increased by more than 100 per cent. India achieved the sales of 1.11 million vehicles last year (2005).

Domestic sales have been growing at a clipping pace:

Passenger car sales rose by 22.84 per cent during April-September 2006, compared to the corresponding period n 2005.

The cumulative growth of overall sales of passenger vehicles during April-September of 2006-07 was 20.73 percent.

Utility Vehicle (UVs) sales grew at 12.85 per cent during the same period.

Overall, the commercial vehicles segment grew at 36.96 per cent. Growth of Medium and Heavy Commercial Vehicles was 39.92 per cent. Light Commercial Vehicles also performed well with a growth of 32.86 percent.

Exports

India is fast emerging as a manufacturing base for car exports. According to the Society of Indian Automobile Manufacturers (SIAM), a total of 89,338 vehicles were exported in September 2006, a 58.07 per cent jump as compared to the same month last year. While passenger vehicle exports grew at 13.15 per cent, two-wheelers and commercial vehicle exports grew at 27.80 per cent.

Major Manufacturers of Automobiles in India

Maruti Udyog Ltd.General Motors IndiaFord India Ltd.Eicher MotorsBajaj AutoDaewoo Motors IndiaHero MotorsHindustan MotorsHyundai Motor India Ltd.Royal Enfield MotorsTelcoTVS MotorsDC DesignsSwaraj Mazda Ltd

Foreign players in India

Calendar 2006 has seen the entry of many high-end brands into the country. The Indian automobile market will see at least 30 new launches, spanning everything from affordable hatchbacks to mid-size models to super luxury high-end cars and SUVs.

Mercedes, BMW, Porsche, Audi, Bentley and Rolls Royce are already here. Now, the Italian marquee Lamborghini is also planning to enter the country. The Italian marquee plans to launch the Gallardo.

German luxury car maker Audi AG is preparing to drive into India a range of sporty, lifestyle cars like S8 and RS4 early next year. The year 2007 will also mark Audi's entry into merchandising in Indian car bazaar.

Car Statistics India

The Indian automotive industry is the 2nd fastest growing in the world. About 8 million vehicles are produced annually in this country toady. During 2005-2006, India has emerged as the 3 rd largest market in the Asia Pacific Region. With various car manufacturing companies setting up their units in different parts of the country, the production of the cars will increase at a very fast rate. The car statistics indicate that India will soon become one of the top 10 car manufacturing countries , leaving behind the U.K. Car statistics also show that by the end of the fiscal year 2006-2007, the car production capacity in India will exceed the mark of 2 million. Thus, the production of cars will increase by 70% from the present capacity of 1.2 million.

The domestic sales of passenger cars have increased significantly over the years. A graphical representation of the domestic sale of cars will give you an insight about the present market situation prevailing in the country: In the recent years, India has emerged as one of the major bases for manufacturing small passenger cars. At present the Indian automotive industry boasts of being the 3 rd largest manufacturer of small cars. According to the car statistics almost 70 % of the cars sold in this country come under the segment of small cars. A number of car manufacturers like: Maruti Udyog, Tata Motors, Hyundai, Honda, Ford, Hindustan Motors, Fiat, General Motors etc offer various new model of cars now and then. It is expected that the various automobile manufacturers will be investing about $ 5 billion in India, between 2005-2010.

As per the car statistics, export of passenger cars from India has also grown considerably over the last decade. A graphical representation of car export trend will help you to make an in-depth analysis of the present status of the Indian automotive industry: With new strategies being implemented and more investments being made in Indian automotive industry the production as well as the domestic sale and exports will increase substantially.

India definitely is shining; with a GDP that is sparkling at over 8 per annum the country certainly is on the right course. The automobile exports are at an all time high as was indicated by Society of Indian automobile Manufacturers in a report released in 2006. According to the report, the passenger car segment saw a rise of 9% in January 2006.

Analysis of Indian Exports:

Strengths

Cost competitiveness in terms of labor and raw material.Established manufacturing base. Economics of scale due to domestic market.Potential to harness global brand image of the parent company.Global hub policy for small car like Hyundai, Suzuki, etc.

Weakness

Perception about quality.Infrastructure bottlenecks.

Opportunities

Huge export markets such as Europe, America, Africa, and others for Indian cars.

Threats

China, Malaysia, Thailand, etc.Many other countries also have strategies for export promotion.

Export Imperatives:Internal Factors:

Attaining high quality for global standards.Continuous cost reduction for global competitiveness.Supply chain management (logistics).Attaining economies of scale & scope.

External Factors:

Improve infrastructure (ports, roads, etc).Improve EXIM regulations.

The Indian passenger car segment

The Indian car industry an be classified, based on the price of the car, into the small car or the economy segment (up to Rs.0.25mm), mid-size segment (Rs.0.25 0.45mn), luxury car segment ( Rs 0.45 -1mn) and super luxury car segment (above Rs1 mn).

The models in the car market can be fitted to different segment as given below:-

Category

Models

Economy segment (up to 0.25mn)

Maruti Omni, 800, Padmini

Mid-size segment (Rs0.25-0.45mn)

Swift, Wagen-R Premier 118NE,Ambassador,Nova, Fait Uno,Zen, Huundai Santro, Daewoo Matiz, Tata Indica, Contessa, Aulto.

Luxury Car Segment

Tata Indica, Maruti esteem,Ford Ikon, Opel Astra, Fait Siena, Opel Corsa, Hyundai Accent, Tata Estate, Ford Feasts, Honda City,Lancer.

Super luxury segment ( Above Rs 1mn)

Merceds Benz, BMW, Nissan, Audi, Luxus, Skoda and other imported Models.

The demand for passenger cars can be segmented on the basis of the user segment as those bought by taxi operators, government/non government institutions individual buyers etc. A major portion of the demand in India accrues mainly from personal vehicle owners.

Industry analysis using porters five force:

Porters five force of competition model views the profitability of an industry as determined by the five source of competition pressure. Theses five force of competition include three source of Horizontal competition competition from substitute, the threat of competition from entrants, and competition from established producers and two source of vertical competition the bargaining power of suppliers and buyers. The following write-up is a view of the Indian passenger car industry from these five angles leading to the expected changes in the coming years in the underlying structure of the Indian passenger car industry.

Competition from substitute

Inadequate Public Transportation System: In developed nations city planners have tried to relieve congestion and pollution by creating an efficient public transportation system. However, they have been remarkably ineffective in encouraging motorists to forsake their cars for buses or subway. The public transportation system in India is not only extremely inadequate, it is notably poor in quality. This scenario is not expected to change drastically in the next ten years.Electric cars: All the major car manufacturers in the world are currently developing electric cars or hybrid cars to reduce pollution in the coming years. However, these technologies wll requires considerable length of time to become commercially feasible in developing nations.

The lack of inadequate public transportation system coupled with the fact that the electric or hybrid cars are still in the developmental stage means that the Indian car industry faces minimal competition from substitutes.

Treat of new entrants

Economies of scale: in the automobile industry, economies of scale act as a significant entry barrier since it is a capital-intensive industry. Globally, it has been witnessed that car manufacturers with low volumes find it extremely difficult to survive given the high per unit cost. The acquisition of Rolls Royce, Jagur, Rover, and AMC/jeep are a testament to this. On the other hand by entering on a large scale, one runs the risk of drastic under-utilization of capacity as observed by Daewoos experience in India. Since the economy segment cars are expected to drive volume growth in India in the coming years, it is extremely important for a manufacturer to have a model in this segment to reduce his per unit cost.Government policy: the license-raj of the Indian government toll 1991 acted as a significant barrier for any new entrants in the passenger car industry. Moreover, the governments perception of the car being a luxury rather than a modern necessity resulted in this sector being labeled as low priority. However, the liberalization of the Indian economy has removed this hindrance. huge capital Costs: Huge capital Cost act as significant entry barrier and only established companies with deep pockets possess the resources to enter the automobile industry. Significant costs are involved in the development of a new car as can be seen by Telcos Indica car which has incurred an expenditure of Rs.17 bn.Absolute cost Advantages: Marutis presence in the car industry since 1984 gives it considerable cost advantage over the new entrants. Not only are its plants highly depreciated and its cars highly indigenized as compared to its competitors, it has a wide distribution and service network which will require mammoth resource to replicate.

Absolute Cost Advantage: Marutis presence in the car industry since 1984 gives it considerable cost advantage over the new entrants. Not only are its plants highly depreciated and its cars highly indigenized as compared to its competitors, it has a wide distribution and service network which will require mammoth resource to replicate.

Although liberalization of the Indian economy has reduced the impact of government policy as an entry barrier, the car industry still enjoy high entry barriers due to huge capital costs involved in setting up efficient plants and numerous cost advantages enjoyed by Maruti. The recent pull-out of Peugeot is an example that even a global automobile company could find it extremely difficult to operate in India if it faces labor trouble and Rivalry between Established competitors.

Highly Concentrated Industry : The Indian car industry is highly concentrated with Maruti itself accounting for about 80% of all sales. The lack of competition in the economy segment to Maruti 800 has given the company considerable power. Its dominance in this segment gives it the power to cross subsidize its models in the other segment. However, this scenario is expected to change drastically over the next three years with a number of new models being launched to challenge maruti 800s dominance the scenario in the economy segment could be similar to that in the premium segment currently with intense price competition. The slashing of cielo`s price by 25%has led to ford and opel introducing cheaper modelsDiversity of competitors: 1984 and 1993 have been land mark years for the Indian car industry. The entry of Maruti in 1984 changed the complexion of the industry as for the first time Indian had opportunity a buy a car which was comparable to the Japanese automobile. 1993 was a historic year as the industry was deregulated an India become the latest battlefield for global auto majors. The last few years have seen the industry integrate with global automobile industry and evolve into being extremely competitive. For the first time, Marutis position as the leader of the car industry will be severally challenged especially if three new cars (Tata Indica, Daewoo, DArt, and Hyundai Santro) in the economy segment can deliver the promised performance.Product differentiation: One of the key trends observed in the car industry during the last decade is that the products of different companies have become increasingly similar especially in the economy and mid-size segment. There is a perceptible shift towards car being treated as a commodity rather than as a consumer good. In the premium car segment in India, differentiation between different models is declining as companies strive to increase volumes by cutting prices. Even Opel Astra has decided to introduced a new model without any frills to reduced its prices by Rs.10 million.Increase in Working Capital Needs: The intense rivalry between the automobile companies will mean that the companies would have to give longer credit periods to its dealers. The substantial over-capacity in the industry will lead to increased inventory holding. These two factors point towards an increase in working capital needs of car companies.The competition between firms in the car industry is expected the intensify considerable as never companies will start reducing Marutis dominance of the market the expected significant over-capacity in the industry, increasing working capital needs, and high exit barriers coupled with low differentiation between models especially in the economy segment will put downward pressure on price and profitability of companies.

Bargaining power of Buyers

Buyers price Sensitive: Car buyers in India are extremely price-sensitive especially in the economy segment. Although it is too early to judge the three new small cars and Maruti response to it, we can expect the price competition to intensify since buyers would e more willing to switch while intense competition among the companies would require them to generate volumes.Relative bargaining power : Gone are the days when the India car buyer had to buy one of the 30,000 Ambassadors or Fiate, which were produced. The penetration of satellite television has globalized the Indian customer. Car companies have seen forced to revamp their dealer network. From a small shed for a dealership, the shift is towards huge dealership who not only offer complete range of services for the car but also make sure that the customer has a replacement vehicle so that they may not become immobile.Availability of Easy financing: the entry of numerous car companies has brought along with it a massive increase in the availability of cheap finance for the Indian consumer. This hassled to fierce competition among the car companies and has even led to free gifts being doled out to buyers to lure them to purchase a particular car.

Bargaining Power of Suppliers

Diminishing Supplier Power : one of the key trends observed in the global auto industry is the significant increase in outsourcing of car parts. In India, the development of the auto ancillary industry has also brought in this phenomenon. However, the large number of competitors for supplying each part implies that in the coming years, supplier power will diminish to a large extent except for suppliers who have almost monopolistic power like Mico-Bosch. Also, there is a increasing shift towards reduction in vendor base for a company which means that the chosen suppliers also have to make substantial financial investments to enhance the quality of their products.

Supplier power in the automobile industry will diminish greatly in the coming years due to the large number of competing supplier, threat of cheaper and better-quality imports, and an increasing trend towards reduction of a car companys vendor base.

spot gaps in the market and cater to particular niche markets like sports utility vehicles and minivans. The diminishing power of the supplier industry will help the industry in improving the quality of car components and getting longer payment periods. The key to success in the Indian car market will be offering good quality cars that offer value for money, run innovative marketing campaigns to attract potential buyers, and offer excellent after sales service. Companies, which have a range of vehicles in all the segments of the market like Maruti, will be at a significant advantage due to their ability to cross-subsidize model

Manufacturing process

The body panel and engine constitute a major portion of the total cost of car manufacture. A typical cost structure for car is as given below.

Parts/assembly

% of total cost

Glass

5

Brakes/wheels/tyres

6

Interiors

7

Transmission system

8

Ignition/exhaust system

8

Steering/suspension

9

Comfort fittings

11

Engine

16

Body

18

Others

13

Car manufacturing is basically assembly of components procured from ancillaries or auto component manufacturers. Nearly 80% of auto components are outsourced by the car manufacturers. This helps in reducing the capital cost needed to setup a car manufacturing plantf 5 years in suitable installments. 3. SECTOR INFORMATION

Automobiles Industry

The automobiles sector is compartmentalized in four different sectors which are as follows:

Two-wheelerswhich comprise of mopeds, scooters, motorcycles and electric two-wheelersPassenger Vehicleswhich include passenger cars, utility vehicles and multi-purpose vehiclesCommercial Vehiclesthat are light andmedium-heavy vehiclesThree Wheelersthat are passenger carriers and goods carriers.

The automobile industry is one of the key drivers that boosts the economic growth of the country. Since the de-licensing of the sector in 1991 and the subsequent opening up of100percent FDI through automatic route,Indianautomobile sector has come a long way. Today, almost every global auto major has set up facilities in the country.

Austria based motorcycle manufacturer KTM, the established makers of Harley Davidson from the US and Mahindra & Mahindra have set up manufacturing bases in India. Furthermore, according to internal projections by Mercedes Benz Cars,India is set to become Mercedes Benzs fastest-growing market worldwide ahead of China, the US and Europe.

As per the data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, Government of India, the cumulative FDI inflows into the Indian automobile industry during April 2000 to October 2013 was noted to be US$ 9,079 million, which amounted to 4% of the total FDI inflows in terms of US $. The production of compact superbikes is also expected to take place in India. The country has a mass production base of 16 million two-wheelers and the several global as well as Indian bike makers are looking forward to use it as an advantage in order to roll out sports bikes in the 250 cc capacity.

The world standing for the Indian automobile sector, as per the Confederation of the Indian industry is as follows:

Largest three-wheeler marketSecond largest two-wheeler marketTenth largest passenger car marketFourth largest tractor marketFifth largest commercial vehicle marketFifth largest bus and truck segment

However, the year 2013-2014 has seen a decline in the industrys otherwise smooth-running growth. High inflation, soaring interest rates, low consumer sentiment and rising fuel prices along with economic slowdown are the major reason for the downturn of the industry.

Except for the two-wheelers, all other segments in the industry have been weakening. There is a negative impact on the automakers and dealers who offered high discounts in order to push sales.To match the decline in demand, automakers have resorted to production cuts and lay-offs, due to which capacity utilization for most automakers remains at a dismal level.

Despite the comprehensive market being under extreme burden, the luxury car market has observed a robust double-digit hike during the year 2013-2014, as a result of rewarding new launches at compelling lower price points. Further, with the measured increases in the price of diesel, the overall market continues to shift towards petrol-fuelled cars. This has lead to the growth in sales of the 'Mini' segment of the PV market by of 5.5%

Factors determining the growth of the industry

Fuel economy and demand for greater fuel efficiency is a major factor that affects consumerpurchasedecision that will bring leading companies across two-wheeler and four-wheeler segment to focus on delivering performance-oriented products.Sturdy legal and banking infrastructureIncreased affordability, heightened demand in the small car segment and the surging income of the Indian populationIndia is the third largest investor base in the worldThe Government technology modernization fund is concentrating on establishing India as an auto-manufacturing hub.Availability of inexpensive skilled workersIndustry is perusing to elevate sales by knocking on doors of women, youth, rural and luxury segmentsMarket segmentation and product innovation

Employment Opportunities

There are a wide range of jobs available in the automobile industry. With thenumberof vehicles available on the roadtoday, the need and requirement for people who can fix these machines is fast increasing. Careers like automobile technician, car or bike mechanics are a greatoption. Becoming a diesel mechanic is also a significant alternative. Diesel mechanics are responsible for repairing and servicing diesel engines. As they are also required to repair engines of trucks and buses, other than cars, they are provided with hefty wages.

If communication with people instead of repairing cars is what interests you, then you have the opportunity of becoming a salesperson or sales manager in an automobile company. Career opportunities in automobile design, paint specialists, job on the assembly line and insurance of vehicles is also available.

Employment Trends

The Automotive Mission Plan for the period of 2006-2016 aims to make India emerge as a global automative hub. The idea is to make India as the destination choice for design and manufacture of automobiles and auto components, with outputs soaring to reach US$ 145 billion which is basically accounting for more than 10% of the GDP. This would also provide further employment to over 25 million people by 2016 making the automobile the sunrise sector of the economy.

According to the Confederation of Indian Industry, the automobile sector currently employs over 80 lac people. An extension in production in the automobile industry is forecasted, it is likely to rise to Rs. 600000 crore by 2016.

Future Trends in the Automobile Industry

As the auto-shows began in January 2014, the industry promised a blend of technology and automotives. With the recession trend breaking its leashes form the past two years, 2014 is expected to get back on track with the sales of automobiles in the country.

Almost Self-governing cars are predicted to be on the streets by 2020More than half the cars on the streets are going to be powered by diesel by 2020Industry watcher Gartner indicates that 30 percent of motorists want parking info. The facility is likely to come up after glitches in the infrastructure catch up.High Performance Hybrid cars are likely to gain greater popularity among consumers.

The Indian automobile industry has a prominent future in India. Apart from meeting the advancing domestic demands, it is penetrating the international market too. Favoured with various benefits such as globally competitive auto-ancillary industry; production of steel at lowest cost; inexpensive and high skill manpower; entrenched testing and R & D centres etc., the industry provide immense investment and employment opportunities. 4. Company Information

MARUTI UDYOG LIMITED

Maruti Udyog Ltd is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. 18.28% of the company is owned by the government, and 54.2% by Suzuki of Japan. The Indian government held an Initial Public Offering of 25% of the company in June of 2003.The company annually exports more than 30,000 cars and has an extremely large domestic market in India selling over five hundred thousand cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Alto tops the sales charts.

Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Till recently the term "Maruti", in popular Indian culture, was associated to the Maruti 800 model.

The largest selling car from Maruti's stable, Maruti 800

In the order they were launched:

Maruti 800: Launched 1983. Largest selling car in India, till 2004.Maruti Omni: Launched 1984.Maruti Gypsy: Launched 1985.Maruti 1000: Launched 1990Maruti Zen: Launched 1993 with a facelift in 2003.Production ended in 2006.Maruti Esteem:Launched 1994Maruti Wagon-R:Launched 1999 Modified 2006Maruti Baleno:Launched 1999Maruti Alto:Launched 2000. Currently the largest selling car in IndiaMaruti Grand Vitara:Launched 2003Maruti Grand Vitara XL-7Maruti Versa: Launched 2004Maruti Swift: Launched 2005Maruti Zen Estilo Launched in 2006Maruti Swift Diesel Launched in 2007Services offered

Authorized Service Stations- Maruti is one of the companies in India which has unparalleled service network. To ensure the vehicles sold by them are serviced properly Maruti had 1545 listed Authorized service stations and 30 Express Service Stations on 30 highways across India.Maruti Insurance- Launched in 2002 Maruti provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited.Maruti Finance- To promote its bottom line growth, Maruti launched Maruti Finance in January 2002. Prior to the start of this service Maruti had started two joint ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing loan. Maruti tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its strategic parnters in car finance. Again the company entered into a strategic partnership with SBI in March 2003. Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.Maruti TrueValue- Maruti True Value is a service offered by Maruti Udyog to its customers. It is a market place for used Maruti Vehicles. One can buy, sell or exchange used Maruti vehicles with the help of this service in IndiaN2N Fleet Management- N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporates. Its impressive list of clients who have signed up of this service include Gas Authority of India Ltd, DuPont, Reckitt Benckiser, Sona Steering, Doordarshan, Singer India, National Stock Exchange and Transworld. This fleet management service include end-to-end solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience services and Remarketing.

Accessories- Many of the auto component companies other than Maruti Udyog started to offer components and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti. Maruti started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers and other car care products. These products are sold through dealer outlets and authorized service stations throughout India.Maruti Driving SchoolExports- Maruti Exports Limited is the subsidary of Maruti Udyog Limited with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignment of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country Maruti crossed the benchmark of 3,00,000 cars. Since its inception export was one of the aspects government was keen to encourage. Every political party expected Maruti to earn foreign currency. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda, Chile, Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti ExportsKey Competitors-

Tata MotorsHyundai IndiaFord IndiaFIAT IndiaGeneral Motors India

Pride Pointers

Indias largest automobile companyMUL Rolls out one car every 43 second.Around 4 million people in India are proud to own maruti cars.The highest installed production capacityMore than 35,000 trained technicians for customer support.Largest Sales network-270 sales outlets

Largest service networks- 359 dealers workshopCities covered by sales- 172Cities covered by service- 922Spare Parts Store- 26MGP Shopee- 11True Value network- 127 outlets

Some Milestones-

1983- Launched, hence bringing the first revolution in the Indian car market in terms of

TechnologyAvailability- production CapacityFuel EfficiencyChoice of colourShape May- 1993, Zen the world car unvieled at a world premier.November- 1994, Esteem the first luxury car on Indian roads launchedDecember- 1999, Baleno, the top end of the luxury car launched.March-2000 WagonR the original tall boy launched.September-2000, Alto launched in three variantsOctober-2001, Versa, Indias first MPV launched in three variantsApril-2002 Grand Vitara, the SUV launched.

Some Milestones in Exports

MUL Export cars to more than 100 countries.Indias largest exporter of completely built cars (CBU) during 2001-2002 both in terms of volume and value.Cumulative export sales crossing the 2.5 lakh mark, far more than any car company in the country.

Local market trends

Sales, particularly in the small car segment, will drive passenger car sales in the near in term. However, within the next two years , capacity is expected to be twice the total demand for cars.With developments in the small car segment acquiring a degree of stability in terms of price competition, the action is shifting to the mid-size car segment. sales in this segment will pick up as new models come in and income levels rise but it is still some times till it comes anywhere close to the economy sized segment.What will also drive car sales is the wide availability of finance schemes by a variety of banks and FIs.Sales in the used car market is also expected to do well as more an dmore older models get replaced by newer ones at a faster pace. The coming in of Euro 3 and 4 norms will also increase scrappage rates.In view of expected surplus in the domestic market, India will emerge as one of the leading car sourcing point in the Indian subcontinent.Consumers will be the beneficiaries as a result of marketing war, as they will be offerd technologically superior products at better price and terms and conditions. But the customer has a risk of model discontinuation as a result of shake-out expected in the industry.India offers a releatively low cast production base and is strategically positioned as a launching base for third country export to Asia-pacific and European marketsGrowth in road transport, increasing urbanization and privatization of public transport will into growing demand for commercial vechile which is sited to reach three hundred thousand by 2001, growth of disposable incomes will push up demand for two-wheelers to 4.5 million, of three-wheelers to 250 thousand and of passenger car to 420 thousand over the same time span.India has added advantage of an extensively segmented market and a well- developed dealer network.Growth of consumer finance leasing and hire-purchase options for vehicle dealers and buyers also boost demand.A well developed component industry offers opportunities for sourcing. The scope is vast for foreign collaboration to produce branded models stressing on emission standards, fuel efficiency, advanced features and contemporary styles.

5. METHODOLOGY

Literature Review

Many developing countries regard the automobile industry as an economically strategic sector in the light of its contribution to national production, employment and technology, reinforced through the magnitude of upstream and downstream activities (Fujita,2001). This is due to the fact that an automobile is made up of over 5000 parts and components and thus the industry can create significant linkages and clustering as many of these parts and components are manufactured by suppliers in other industries, such as plastic, steel, electronic, rubber textile glass and metal(Tham 2003). Both agree that the above factors as well as the large amounts of investment and large-scale production typically required of capital-intensive industry, largely explain governments extensive intervention in the sector prevalent in may countries

Background of the Study

The process of providing loans to the exporters requires official formalities to be completed as the risk always lies with the bank. Primary study of this project is about how the bank manages to balance the risk and the customer satisfaction as it deals with foreign currency by providing loans in dollars..

Problem Statement and Importance of the Study

Maruti has come out with a concept of creating a new market for Pre Owned (second hand) cars which it calls True Value.

Objectives, Scope and Limitations of the Project of Study

To know and study/analyses the effectiveness of second hand car sales by Maruti Suzukis True Value in Mumbai city.

To know the nature of the market for used cars in the Twin Cities.To enumerate the various players for used cars in the Twin cities.To enumerate the various reasons for customers opting a used car.To find out the awareness/ knowledge level of customers on the concept of True ValueTo access the impact of promotional activities on the sale of used cars.

Hypothesis:

Null Hypothesis: Preference for buying Pre Owned Car is more then New Car

Alternate Hypothesis: Preference for buying Pre Owned Car is not more then New Car

6. RESEARCH METHODOLOGY

Research Design

Research is one of the most important part of any study and pertains to the collection of information and knowledge. Marketing research is defined as the systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company. My project research is Exploratory research this is concerned with discovering the general nature of the problem and the variable that relate to it. Exploratory research is characterized by high degree of feasibility and it tends to rely on secondary data.During this study, exploratory research is carried to identify the variable like, customer satisfaction level, basis of purchase decisions, important of brand name, customer opinion regarding various preferred feature, the innovative advertising strategies used by the companies, which decides the strength of the company to be in the customers mind and also to grab the major portion in the market.

After discovering the general nature and the variable relating to it, with the help of exploratory research, a descriptive research will carried out during the study for the purpose of accurate description of variables.

Descriptive research carried out with the help of primary data collected from the customer through questionnaires.

Source of Data

Primary Data:

Systematic collection of information directly from respondents. This data is collected for the descriptive research. The survey data collected during the study includes the data collected through questionnaire and face-to-face interview with customer to know about the consumer behavior.

Secondary Data:

The first step in data collection approach is to look for secondary data. Usually it is the data developed for some purpose other than for helping to solve the problem at hand. Secondary data are collected through various magazines, internal experts, website, directories, external experts and miscellaneous report.

Data Collection Instrument

Survey Questionnaire

Population

For the purpose of this project self-administered questionnaire to potential customers and for standard commercial business enterprises located in Mumbai city.

Sampling Method

Convenient Sampling

For our survey we have utilized convenient sampling because we could not have access to all the users. We, therefore, got our survey filled from All the people using A2 segment cars and the people who can afford an A3 segment cars and standard commercial enterprises located in Mumbai.

Sampling Frame

List of standard commercial enterprises located In Mumbai, List of A2 segment car user and list of people who can afford A3 segment cars.

Sampling unit:

Standard Hotels, Business enterprises and households

Sample Size:

100

Sampling Method

Samples are selected on Non probability convenient sampling method.

7. Data Analysis and Interpretation For Customers (Professionals)

Q 1. You are in which profession

Profession of Respondent

11

11.0

11.0

11.0

8

8.0

8.0

19.0

19

19.0

19.0

38.0

24

24.0

24.0

62.0

17

17.0

17.0

79.0

21

21.0

21.0

100.0

100

100.0

100.0

Engineer

Doctor

Lecturar

Business

Advocate

Banker

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent



Banker

Advocate

Business

Lecturar

Doctor

Engineer

Frequency

30

20

10

0

Findings:

11 % of Respondents are Engineers

8 % of Respondents are Doctors

19 % of Respondents are Lecturars

24 % of Respondents are Businessman

17 % of Respondents are Advacates

21 % of Respondents are Bankers

Interpretation

Among different demographic classification in the research profession of the respondents is the prime factor and her professional like business, advocates, bankers, engineers, lectures are focused customers.

Q 2. Age of Respondent

Age of Respondent

36

36.0

36.0

36.0

37

37.0

37.0

73.0

23

23.0

23.0

96.0

4

4.0

4.0

100.0

100

100.0

100.0

25-35

35-45

45-55

>55

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent

Age of Respondent

Age of Respondent

>55

45-55

35-45

25-35

Frequency

40

30

20

10

0

Findings:

36 % of Respondents are of age 25-35



4 % of Respondents are of age greater than 55

Interpretation

The other demographic classification is the age of the respondents, as India is having very significant portion of young population so there are more than 73% of the people are in age group 25 to 45 willing to have cars.

Q 3. Gender of Respondent

Gender of Respondent

88

88.0

88.0

88.0

12

12.0

12.0

100.0

100

100.0

100.0

Male

Female

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent



Female

Male

Frequency

100

80

60

40

20

0

Findings:

88 % of Respondents are male

12 % of Respondents are male

Interpretation:

The gender is the prime important factor and the male is dominating the auto sector and remote sector is growing

Q.4 Income of Respondent

Income of Respondent

19

19.0

19.0

19.0

42

42.0

42.0

61.0

36

36.0

36.0

97.0

3

3.0

3.0

100.0

100

100.0

100.0

Rs 50,000-Rs 1,00,000

Rs 1,00,000-Rs 1,50,000

Rs 1,50,000-Rs,2,00,000

> 2,00,0000

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent



> 2,00,0000

Rs 1,50,000-Rs,2,00,

Rs 1,00,000-Rs 1,50,

Rs 50,000-Rs 1,00,00

Frequency

50

40

30

20

10

0

Findings:

19 % of Respondents are under income Rs.50,000-Rs.1,00,000

42 % of Respondents are under income Rs.1,00,000-Rs.1,50,000

36 % of Respondents are under income Rs.1,50,000-Rs.2,00,000

3 % of Respondents are under income greater than >2,00,000

Interpretation

as I have already told that companies are focusing on the middle class segment of the Indian market in the income group or 1 lack to 2 lack which accounts to 78 % approximately

Q 5. Marital Status

Marital Status

81

81.0

81.0

81.0

19

19.0

19.0

100.0

100

100.0

100.0

Married

Unmarried

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent

Marital Status

Marital Status

Unmarried

Married

Frequency

100

80

60

40

20

0

Findings:

81 % of Respondents are Married

19 % of Respondents are Unmarried

Interpretation

Among the married and unmarried customers the car owner and the prospective car customer are the married one the safety provided to the self and the family is prime importance in buying car and they account to 80%

Q 6. Number of Children

Number oif Children

31

31.0

31.0

31.0

38

38.0

38.0

69.0

12

12.0

12.0

81.0

19

19.0

19.0

100.0

100

100.0

100.0

One

Two

More than 2

No

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent

Number oif Children

Number oif Children

No

More than 2

Two

One

Frequency

40

30

20

10

0

Findings:

31 % of Respondents have one child

38 % of Respondents have two children

12 % of Respondents have more than two children

19 % of Respondents have no children

Interpretation

as above explained the safety of he family is one of the prime important the children of the family and there safety is demanding the parents to own a car

Q.7 Dou you own a car

Dou you own a car

32

32.0

32.0

32.0

68

68.0

68.0

100.0

100

100.0

100.0

Yes

No

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent

Dou you own a car

Dou you own a car

No

Yes

Frequency

80

70

60

50

40

30

20

10

0

Findings:

32 % of Respondents have their own car

68 % of Respondents dont have their own car

Q.8 Is it New car or Second Hand Ca

Is it New car or Second Hand Car

17

17.0

17.0

17.0

15

15.0

15.0

32.0

68

68.0

68.0

100.0

100

100.0

100.0

New Car

Pre-Owned car

No Car

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent



Pre-Owned car

New Car

Frequency

17.5

17.0

16.5

16.0

15.5

15.0

14.5

15.0

17.0

Findings:

54 % of Respondents have new car

46 % of Respondents have Pre owned cars

Interpretation

As for the auto industry standards the sales of new and pre owned cars is 1:1 as per the research it is showing the same where how car seekers, and pre owned car seekers are equal.

Q.9 Car Purchased from

Car Purchased from

5

5.0

33.3

33.3

10

10.0

66.7

100.0

15

15.0

100.0

85

85.0

100

100.0

Certified Dealer

UnCertified Dealer

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent

Car Purchased from

Car Purchased from

UnCertified Dealer

Certified Dealer

Frequency

12

10

8

6

4

2

0

Findings:

33 % of Respondents have purchased cars from certified dealers

67 % of Respondents have purchased cars from uncertified dealers

Q.10 How did you come to Know about Dealer

How did you come to Know about Dealer

8

8.0

53.3

53.3

5

5.0

33.3

86.7

2

2.0

13.3

100.0

15

15.0

100.0

85

85.0

100

100.0

Advertisements

Friends/Neighbours

Other Dealers

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent



Other Dealers

Friends/Neighbours

Advertisements

Frequency

10

8

6

4

2

0

Findings:

54 % of Respondents came to know about uncertified dealers through Advertisements

33 % of Respondents came to know about uncertified dealers through Friends & Neighbours

13 % of Respondents came to know about uncertified dealers through other dealers

Interpretation

Advertisement and word of mouth are playing very important role in him educating the customers about dealers which account to around 87 % approximately.

Q.11 Would you buy a new car or pre-owned car

Would you buy a new car or pre-owned car

21

21.0

30.9

30.9

43

43.0

63.2

94.1

4

4.0

5.9

100.0

68

68.0

100.0

32

32.0

100

100.0

New car

Pre owned car

Dont Want Cars

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent



Dont Want Cars

Pre owned car

New car

Frequency

50

40

30

20

10

0

Findings:

31 % of Respondents wants to buy new car

63 % of Respondents wants to buy pre owned car

6 % of Respondents dont wants to buy car

Interpretation

Among the prospective car customers majority of him customers are willing to buy the pre owned cars.

Q.12) If pre-owned car, would you prefer to buy from

If pre-owned car, would you prefer to buy from

16

16.0

37.2

37.2

27

27.0

62.8

100.0

43

43.0

100.0

57

57.0

100

100.0

Certified Dealer

Uncertified Dealer

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent



Uncertified Dealer

Certified Dealer

Frequency

30

20

10

0

Findings:

37 % of Respondents wants to buy pre-owned car from certified dealers

63 % of Respondents wants to buy pre-owned car from uncertified dealers

Interpretation

As budget is the prime concern for the customers who want buy the pre owned cars and there certified dealer are bit expressive for the customers of this segment. So majority of them go to Uncertified customers

Q.13) Factors considered in buying a car

Factors considered in buying a car

29

29.0

50.0

50.0

23

23.0

39.7

89.7

3

3.0

5.2

94.8

3

3.0

5.2

100.0

58

58.0

100.0

42

42.0

100

100.0

Budget

Milage

Age

Personal or

Company owned

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent



Personal or Company

Age

Milage

Budget

Frequency

40

30

20

10

0

Findings:

50 % of Respondents considers budget while buying pre-owned car

40 % of Respondents considers milage while buying pre-owned car

5 % of Respondents considers age while buying pre-owned car

5 % of Respondents considers personal/company owned while buying pre-owned car

Interpretation

As the Indian customers are more concerned about the economy of the car the budget and mileage are gain important.

Q.14) Have you heard about "Maruti True Value"

Have you heard about "Maruti True Value"

Have you heard about "Maruti True Value"

No

Yes

Frequency

70

60

50

40

30

20

10

0

Findings:

40 % of Respondents heard about Maruti True Value

60 % of Respondents didnt heard about Maruti True Value

Q.16) From where you heard about "Maruti True Value"

From where you heard about "Maruti True Value"

19

19.0

47.5

47.5

11

11.0

27.5

75.0

10

10.0

25.0

100.0

40

40.0

100.0

60

60.0

100

100.0

Advertisements

Friends/Neighbours

Other Dealers

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent



Other Dealers

Friends/Neighbours

Advertisements

Frequency

20

10

0

Findings:

47 % of Respondents heard about Maruti True Value from advertisements

26 % of Respondents heard about Maruti True Value from friends/neighbours

27 % of Respondents heard about Maruti True Value from other dealers

Interpretation

Advertising through different channel of media are to be focused as majority of the respondents dont know about the Maruti true value.

Q.17) Would you prefer to buy from "Maruti True Value" if it is provided 3 free services and 1 year gurantee

Would you prefer to buy from "Maruti True Value" if it is provided 3 free

services and 1 year gurantee

26

26.0

49.1

49.1

27

27.0

50.9

100.0

53

53.0

100.0

47

47.0

100

100.0

Yes

No'

Total

Valid

System

Missing

Total

Frequency

Percent

Valid Percent

Cumulative

Percent

Would you prefer to buy from "Maruti True Value" if it is provided 3 fre

Would you prefer to buy from "Maruti True Value" if it is provided 3 fre

No'

Yes

Frequency

30

20

10

0

Findings:

49 % of Respondents will refer to buy from "Maruti True Value" if it is provided 3 free services and 1 year gurantee

51 % of Respondents will not prefer to buy from "Maruti True Value" if it is provided 3 free services and 1 year gurantee

For Students(Professional)

Q 1) Are you Localite or non localite

Are you Localite or non localite

14

56.0

56.0

56.0

11

44.0

44.0

100.0

25

100.0

100.0

Localite

Non-Localite

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent



Non-Localite

Localite

Percent

60

50

40

30

20

10

0

44

56

Findings:

56% of Respondents said they are localites

44% of Respondents said they are non- localites

Q 2) If non- localite how long is it since you are studying here?

If non- localite how long is it since you are studying here?

8

32.0

32.0

32.0

17

68.0

68.0

100.0

25

100.0

100.0

2 Yrs

2 yrs and above

Total

Valid

Frequency

Percent

Valid Percent

Cumulative

Percent



2 yrs and above

2 Yrs

Percent

80

70

60

50

40

30

20

10

0

68

32

Findings:

32% of Respondents are under 0-2 year courses

68% of Respondents are under 2 year and above courses

Q 3. Monthly Pocket money

Monthly Pocket money

11

44.0

44.0

44.0

14

56.0

56.0

100.0

25

100.0

100.0

>10000

10000

44% of Respondents are having pocket money

Pre Owned Cars and Bikes

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