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India’s Luxury Car Market
(The Competition Hots Up)
Submitted to:Mrs Shailja Manocha
Submitted by:Group No.:- 6
Case Overview
 Luxury Car as defined in case is car priced above $ 40,000.
 In India, luxury car segment growing at 28% annually.
Profile:Earlier cars were considered a luxury only meant for
Maharajahs (kings) and a few Wealthy traders. (cars were
customized to please rich clients).
Two wheelers were more popular in the markets
primarly due to lower income levels and poor road
conditions .
Indian Luxury Car Market

Between 1950 & 1990 way to import cars was EOUs( Export
Oriented Units) with huge turnover.
 With liberlization , policies changed and so did consumer
behavior.For many Indians car has beome more a lifestyle
statement than a status symbol.
 Fuel efficiency and price tags were no longer the main
deciding factors for the buyer. Design and appeal in addition
to a brand are the strongest drivers in the luxury segment.
 Cars imported as CBUs against bookings only.
Carmakers usually adopt Three Fold Strategy:a) First create brand awareness about the product through
exhibitions and advertisements.
b) Established infrastructure with experienced dealer
networks to further enhance their presence .
c) Finally introduced the product line for the market.
Themes adpoted by various companies to target the customer :Hyundai :- Royalty .
Honda:- Intrinsic Value and Past performance.
Daimler:- Comfort and Class .
Second importance was given to the choice and location of
dealers.:-Showrooms in metros to serve the customer directly.
Competition Hots Up
With the launch of more than 20 luxury models , the
competition has become more intense but there are few
challenges too for premium carmakers in India.
- High Customs Duty ranging from 98% to 100% nearly
doubles the price of the vehicle.
-Waiting Period ( 2 to 7 months).
- Pot holes , traffic jammed roads of India.
But still favorable economic policies and vast population are
encouraging the automakers to have a foothold in India.
3 C’s
o Company
o Customer
o competitor
COMPANY
General motors
BMW
Mercedes
Rolls-Royce
Lamborghini
Porsche
Audi
Bentley
Nissan
Volvo
Toyota
Volkswagen
Skoda
Mitsubishi
CUSTOMER
Establish Industrialist,rich Businessmen
Chief Executives of Companies.
Upper Class ( salary >100 lac p.a)
CUSTOMER PERCEIVED VALUE
Product value
Monetary cost
Services value
Time cost
Personnel value
Energy cost
Image value
Psychic cost
CORE COMPETENCY
AUDI - TECHNOLOGY
BMW - TECHNOLOGY
NISSAN- OPERATIONS
PORSCHE- R & D
MERCEDES - LUXURY AND TECHNOLOGY
SEGMENTATION
GEOGRAPHIC
Region
Whole India
City
Class I cities, Metro
Cities
DEMOGRAPHIC
Age
Above 18 yrs of age
Family Size
Anyone(single,married,
with or without children)
Gender
Male or Female
Income
High(above Rs.100 lakhs
p.a)
Psychographic Segmentation
Grouping people according to attitudes,
values, and lifestyles
Ostentatious and ambitious lifestyle
BEHAVIORAL
Occasions
Benefits
User status
User rate
Loyalty status
Readiness scale
Attitude toward
product
Regular
Lifestyle
Statement,Royality,
Features
First time,Ex-user
Medium to Heavy
Medium
Informed
Enthusiastic
TARGETING
Upper class (>100 lakhs p.a)
Informed people with rich taste
(Ex. Industrialists and youths)
POSITIONING
Image positioning
THE PRODUCT HIERARCHY
Need family
Product class
Product line
Product type
Item
Transpot
Automobile
Four wheeler
Luxury cars
BMW,Mercedes,volvo,
Porsche etc
THE PRODUCT HEIRARCHY
TRANSPORT
Train
Aeroplane
Automobile
(product class)
(Need family)
(product family)
Two wheeler
Three wheeler
Four wheeler
Heavy vehicles
(product line)
Small
VOLVO
FERRARI
Medium sized
Luxury
MERCEDES
ROLLS-ROYCE
VOLKSWAGEN
(Item or brand)
(product type)
FIVE PRODUCT LEVEL
CORE BENEFIT: Transportation
BASIC PRODUCT: Engine
EXPECTED PRODUCT: Comfort,Luxury
AUGMENTED PRODUCT: Advanced
security systems
POTENTIAL PRODUCT: luxury with high
performance(average per litre)
PRICING STRATEGY
LUXURY CARS COMPANIES FOLLOW
“PREMIUM PRICING STRATEGY”
AS THEY OFFER LUXURY AND COMFORT
(VALUE) TO THE CUSTOMER AND
CUSTOMER IS TODAY WILLING TO PAY
FOR LUXURY.
PRODUCT-MIX PRICING

“OPTIONAL FEATURE PRICING”
 MANY COMPANIES OFFER OPTIONAL
PRODUCTS,FEATURES AND SERVICES
ALONG WITH THEIR MAIN PRODUCT.
Ex. GPS System,sunroof and theft
control
CONSUMER GOODS CLASSIFICATION
Speciality goods:
Because speciality goods have unique
characteristics or brand identification
for which consumers are willing to
make a special purchasing
effort.Luxury cars are speciality goods
as interested buyer will travel far to
buy one.
CONSUMER BUYING
BEHAVIOUR
COMPLEX BUYING BEHAVIOR:
 AS THE LEVEL OF INVOLVEMENT IS
VERY HIGH
LEARN
FEEL
DO
PROMOTION
ADVERTISEMENTS IN
 Print media
 Magazines
 News papers
 Rational appeal
 Direct Marketing
 Motion Pictures
CHANNEL DESIGN STRATEGY
PULL STRATEGY :
As automobile(luxury cars)
companies invests money in creating a
“Brand”.
DISTRIBUTION CHANNEL
Franchisee
Distributor
Dealer
CHANNEL LEVELS
 Zero level
Manufacturer
 I level
Manufacturer
Customer
Dealer
Customer
General motors
GM cars and trucks were produced
globally under the following 12 brands:
Buick, Cadillac, Chevrolet, GM Daewoo,
GMC, Holden, Hummer, Opel, Pontiac,
Saab, Saturn and Vauxhall.
ENVIRONMENT
Car Industry and CAR Market
Early 1990‘s
Luxury segment
 Recession
 Up-scale market
 Main competitors:
BMW,GM, Ford, Toyota,
Chrysler, Mercedes,
Volvo, Saab, Audi
 Most companies
operate with different
brands
Late 1990‘s
 Depreciation of Asian
currencies
 GDP growth fell
 U.S. and East Asian
markets slowed
 European car sales held
up
G. M. SWOT ANALYSIS
STRENGTHS
TECHNOLOGY POTENTIAL
QUALITY IMPROVEMENT
MODEL ACCEPTANCE HAS IMPROVED
G. M. SWOT ANALYSIS
WEAKNESSES
 Waiting period
Too Much Vertical Integration
G. M. SWOT ANALYSIS
OPPORTUNITIES
FAVOURABLE ECONOMIC POLICIES.
RISE IN LIVING STANDARD.
INCREASE IN CUSTOMER CONFIDENCE.
CHANGING CONSUMER DEMAND FOR NEW MODEL
TYPES AND STYLES - EXPANSION.
G. M. SWOT ANALYSIS
THREATS
FOREIGN COMPETITION
HIGH TAXES FOR CBUs
 INDIAN LEGISLATION AND REGULATION
POOR QUALITY OF THE INFASTRUCTURE IN THIS
COUNTRY
G. M. SWOT ANALYSIS
INDUSTRY ANALYSIS
MEGADEALERS AND AUTO SUPERMARKETS
WORLDWIDE DEMAND - STAGNATION - DECLINE
MUST BE WORLD CLASS IN EVERY RESPECT - PRODUCT,
MFG. OPERATIONS, FINANCING, AND DISTRIBUTION
THANK
YOU