CHAPTER 1 INTRODUCTION

1.1 OVER VIEW OF AUTOMOBILE INDUSTRY IN INDIA

From the singsong rhythm of the bullock cart to the jet-age, India has traveled a long way. An average Indians dream car may not be the design-savvy onda or the stately limousine, but he sure can dream, and afford, the !aruti now. It was in 1"#" that the first motorcar rode down Indias roads. From then till the First $orld $ar, about %,&&& cars were directly im'orted to India from foreign manufacturers. (he growing demand for these cars established the inherent re)uirements of the Indian market that these merchants were )uick to 'ounce u'on. (he industan !otors * !+ was set u' in 1#%, and in 1#%%, -remier Autobackmobile *-A.+ was established to manufacture automobiles in India. owever, it was -A. who 'roduced the first car in India in 1#%/, as ! concentrated on auto com'onents and could 'roduce their first car only in 1#%#. It was left to another com'any, !ahindra and !ahindra *!0!+ to manufacture sturdier utility vehicles, namely the American 1ee'. In the 2&s, the 3overnment of India granted a''roval to only 4 car dealers to o'erate in India - !, A-I, A.., 5!-I., -A., !0! and (elco. (he 'rotectionist 'olicies continued to remain in 'lace. (he /&s witnessed the establishment of the two-three wheeler industry in India and in the 4&s, things remained much the same. 5ince the "&s, the Indian car Industry has seen a major resurgence with the o'ening u' of Indian shores to foreign manufacturers and collaborators. (he #&s have become the melting 'oint for the car industry in India. (he consumer is king. e is being constantly wooed by both the Indian and foreign manufacturers.

(hough sales had taken a di' in the first few months of 1###, it is back to boom time. 6ew models like !arutis 7lassic, Alto, 5tation $agon, Fords Ikon, the new look !itsubishi .ancer are all being launched with an eye on the emerging market. In these last years of the millennium, suffice it is to say that Indian cars will only grow from strength to strength. Although India has been much discussed in recent years, and has been the reci'ient of major foreign investment in its automotive industry, it has in many ways not received the attention of the worlds other major develo'ing country, 7hina 8 but this is about to change. $ith the worlds second largest and fastest-growing 'o'ulation, there is no denying Indias 'otential in both economic and 'o'ulation terms and the effect it will have on the auto industry in the years to come. (he country is already off to a good start, with a welldevelo'ed com'onents industry and a 'roduction level of one million four-wheeled vehicles a year, 'lus a further five million two- and three-wheelers. India also has substantial strength in mass 'roduction techni)ues and is 'articularly well served in the fields of research and develo'ment and software design. (herefore, as always, the )uestion is when will e9'ansion occur and to what level: (he im'lications, market drivers and sco'e of a future massive Indian vehicle market are covered in the India 5trategic !arket -rofile, a brand-new forecast of Indian automotive and related activity to ,&,&. ;ased on !a9 -emberton<s uni)ue relational long-term forecasting model, it forecasts car and 7= sales, demogra'hics, materials usage, auto industry em'loyment, and e9'lains their inter-relation with detailed analysis. India is an emerging country with huge 'otential. (he domestic economy is now growing at around 4> 'er annum and India<s growing im'ortance in global terms is being reinforced by ra'idly rising e9'orts. India<s low cost but highly skilled manufacturing base means that the country is also taking center stage as a favored location for global outsourcing.

(he automotive industry is at the center of Indias new global dynamic. (he domestic market is e9'anding ra'idly as incomes rise and consumer credit becomes more widely available. !anufacturers 'roduct lines are being continually e9'anded, as is the local automotive manufacturing base. @9'ectations are high that India can develo' as a global hub for small car manufacture and as an outsourcing centre that offers the global automotive industry solutions high u' the automotive value chain. (his management briefing reviews the current status of and future 'ros'ects for India<s automotive industry. (he Indian automotive industry has flourished like never before in the recent years. (his e9tra-ordinary growth that the Indian automotive industry has witnessed, is a result of a two major factors namely, the im'rovement in the living standards of the middle class, and an increase in their dis'osable incomes. !oreover, the liberaliAation ste's, such as, rela9ation of the foreign e9change and e)uity regulations, reduction of tariffs on im'orts, and refining the banking 'olicies, initiated by the 3overnment of India, have 'layed an e)ually im'ortant role in bringing the Indian Automotive industry to great heights. It is estimated that the sale of 'assenger cars have tri'led com'ared to their sale in the last five years. (hus, the sale of cars has reached a figure of 1 million users and is e9'ected to increase further. It<s also to be noted that the demand for lu9urious models, 5B=s, and mini-cars for family owners, have shot u', largely due to increase in the consumer<s buying ca'acity. (he increased demand for Indian automobiles has resulted in a large number of multinational auto com'anies, es'ecially from 1a'an, B. 5. A., and @uro'e, entering the Indian market and working in collaboration with the Indian firms. Also, the institutionaliAation of automobile finance has further 'aved the way to sustain a long-term high growth for the industry. (he basic objective of this market research re'ort CCIndian Automobile IndustryDEecent (rendsCC is to estimate the demand for automobiles from ,&&2 till ,&1,. (he increasing

role of auto finance is also scrutiniAed by 'roving a series of surveys conducted across the country covering all categories of 'rivate and commercial vehicles< finance. (he re'ort also e9amines the region-wise demand and growth trends for the selected vehicles, and how they influenced India<s 3F- growth.

It could be, arguably, a ti''ing 'oint for the Indian auto industry. In February, France<s Eenault and its 1a'anese affiliate, 6issan, announced 'lans to team u' with Indian tractor giant !ahindra 0 !ahindra to build the country<s largest 'assenger car manufacturing 'lant. (he Es. %,&&& crore *G#&, million+ facility in 7hennai will turn out %&&,&&& cars a year from mid-,&&# on. Industry rumors suggest that eventually the number could double to "&&,&&&. $ere that to ha''en, it would almost match and thus double the number of cars -- 1.1 million -- that the entire Indian auto industry now 'roduces each year. Hver the ne9t three to four years, some Es. ?2,&&& crore *G" billion+ may be invested in building manufacturing ca'acity in India for another two million cars each year, with half a million earmarked for e9'orts. As a result, by ,&1&, India<s ca'acity could tri'le to ?.1 million cars a year, making it the same siAe as 7hina<s market today. *;y way of com'arison, in the B.5., auto makers sold 4./ million cars in ,&&2, according to data u'dated in 1anuary by the B.5. ;ureau of (rans'ortation 5ervices.+ (hanks to low manufacturing costs combined with a robust and growing vendor base for com'onents, some observers believe India could emerge as a global hub, at least for small cars. In fact, nine of the world<s to' 1& automobile com'anies have a 'resence in India. Iet constraints are clearly 'resent, such as 'oor road infrastructure and high ta9es on 'etrol. Also, growth is occurring against the backdro' of com'etitive 'ressures on auto giants such as Ford and 3eneral !otors. India JnowledgeK$harton s'oke with $harton faculty, senior e9ecutives at Indian automobile com'anies and consulting firms, and researchers at !umbai-based research firm 7or'orate Fatabase about the road that lies ahead for India<s auto industry.

(he biggest factor that is driving auto sales is India<s ra'idly growing domestic market, encouraged by #>-'lus 3F- growth and rising incomes across its much-touted ,2&million-strong middle class. Auto'olis, a ;ritish consulting firm, 'redicts that the to' si9 global auto com'anies will lose market share to com'anies like FA$ and 5AI7 in 7hina and India<s (ata !otors, to name a few. A survey by the Economist e9'ects /&> of the incremental demand of ,." million vehicles to come from Asia by ,&,&, with 7hina and India to''ing the charts. (he high growth in the Indian economy has resulted in many foreign car manufacturers entering the Indian market. Eolls Eoyce, ;entley and !aybach are e9am'les of the few high end automobile manufacturers to enter India in the recent years. (here were only a few handful of cars in the Indian market in the 1#"&s. !ost of these were outdated models like industan !otors< industan Ambassador *which is still 'roduced and sold+. (he only car with the latest technology then was the !aruti "&&. It became very 'o'ular because of the low 'rice, high fuel efficiency and good reliability. 5ince then the market has grown with over ,& manufacturers and hundreds of models and variants. (he !aruti "&& is at the lower end of the 'rice range costing ,&&,&&& Indian ru'ees *a''ro9 B5 G%,&&&+ and ;ugatti =eyron at the other with a 'rice tag of 1,2,&&&,&&& ru'ees *G,.4 million+ (import taxes and duties extra+. (he Indian automotive industry has also greatly matured. (he (ata Indica was indigenously develo'ed by (ata !otors. Another Indian manufacturer !ahindra 0 !ahindra also came u' with its own 5B=s, the 5cor'io and the ;olero. (hese cars have 'roved very 'o'ular here and are also e9'orted to the @uro'ean markets. An electric car is also manufactured by one of the local com'anies called E@=A. (he 'assenger vehicle sales in India crossed the one million mark in ,&&2. (his segment grows at 1&-12> annually. Around "2> of the cars sold in India are financed as against the global average of 4&>. In neighbouring 7hina,only 12-,&> vehicles are financed. (here are only three cars in India for 1&&& 'eo'le as com'ared to the other e9treme 2&&

cars for 1&&& 'eo'le in the Bnited 5tates. 3oldman 5achs has 'redicted that India will have the ma9imum number of cars on the 'lanet by ,&2& overtaking the Bnited 5tates.

1ohn -aul !acFuffie, a 'rofessor of management at $harton and an automobile industry e9'ert, is not sur'rised at the e9'losion in the Indian auto market. e has seen this 'henomenon occur in other countries, too. C(here was a sign that India is moving in this direction from the o'ening u' of the economy, the welcoming of foreign investment and other things that were hel'ing economic growth,C he says. C(here seem to be some relatively 'redictable 'oints in the rise of 'er ca'ita income when different stages of what 'eo'le describe as <motoriAation< ha''ened.C !anish !athur, 'rinci'al at A. (. Jearney<s 6ew Felhi office, who oversees the firm<s automotive 'ractice, says the 'enetration of vehicle financing in India is an im'ortant factor. e says such financing accounts for "2> to #&> of all cars boughtL ty'ically u' to "&> of the car<s value is financed. ;y contrast, he says, the 'enetration of vehicle financing in 7hina is considerably lower, even as it boasts nearly three times India<s 'assenger car volumes. In the B.5., about 2/> of consumers and %1> of businesses financed their vehicle 'urchases in ,&&2, according to the latest available data from the federal ;ureau of (rans'ortation 5ervices. About two-thirds of the 'lanned investments in the Indian 'assenger car industry -- about Es. ,%,&&& crore *G2.% billion+ -- will come from (ata !otors, !aruti and yundai and other com'anies. (he (atas are e9'ected to invest Es 1&,&&& crore *G,., billion+, and this includes outlays for a new, low-cost car, a joint venture with Fiat and ca'acity for commercial vehicles. !aruti 'lans to invest Es. %,&&& crore *G#&& million+ in its 'lant in !anesar near 6ew Felhi, after which its ca'acity will increase from /&&,&&& cars to #&&,&&& cars. yundai is doubling its Indian ca'acity to /&&,&&& cars at a cost of Es. onda !otors will s'end Es. 1,"&& crore *G%&& million+ to 2,&&& crore *G1.1, billion+.

tri'le ca'acity to 12&,&&& units by ,&1&. 3eneral !otors is investing about Es. 1,?&& crore *G,"& million+ in its second Indian 'lant in -une, near !umbai, where its ca'acity

could more than double to 1%&,&&& cars in a year. Industry watchers e9'ect it to 'roduce its economy car, 7hevrolet 5'ark, at the facility. India<s 'assenger vehicle business has evolved from rather modest beginnings in the mid1#2&s, and was a near duo'oly for more than three decades with two domestic manufacturers -industan !otors and -remier Automobiles. (he entry in the mid1#"&s of !aruti Bdyog, a government-su''orted joint venture with 1a'an<s 5uAuki, triggered consumers< imagination. It dominated the market for more than a decade. Eeal com'etition emerged in the late 1##&s when India<s largest maker of commercial vehicles. !eanwhile, multinationals such as Ford, 3! and -eugeot had introduced some international models through their Indian joint ventures. (hese could not meet the Indian consumer<s need for a low 'urchase cost, higher fuel efficiency, a comfortable ride in city conditions and low maintenance costs. 5o the small car continued to rule the road. After a while, -eugeot and Faewoo folded their Indian o'erations, while Fiat, Ford and 3! struggled to build a meaningful 'resence for almost a decade. After ,&&&, sales of onda and (oyota cars have climbed ra'idly, but neither has a small car among its offerings. 5o, even today, the to' three 'layers in the domestic market rule "2> of the Indian 'assenger car market. yundai of Jorea introduced its 5antro model, a hatchback. 6e9t came Indica, a diesel-driven small car from (ata !otors,

(he Automotive Industry in India is one of the largest industries and a key sector of the economy. (he Indian automotive industry started from 1##1with the governments de-licensing of the sector and subse)uent o'ening u' for 1&& 'er cent FFI through automatic route. 5ince then many large global com'anies have set u' their facilities in India taking the 'roduction of vehicle from , million in 1##1 to #.4 million in ,&&/.

"

At present, In !" !s t#e $%r& 's

.argest tractor and three-wheel vehicle 'roducer. 5econd largest two-wheel vehicle 'roducer. Fourth largest commercial vehicle 'roducer. @leventh largest 'assenger car 'roducer.

Pr% ()t!%n* According to the 5ociety of Indian Automobile !anufacturers, the Indian automobile industry has reached double-digit growth for the 'ast three years in a row. In ,&&/, the industry 'roduced 1&.# million vehicles, an increase of 1/.,,> over ,&&2. In ,&&2, 'roduction grew 1%.2> over the 'revious year. (he 'roduction of the automotive industry is e9'ected to achieve a growth rate of over ,& 'er cent in ,&&/-&4 and about 12 'er cent in ,&&4-&". E+p%rtsM the cumulative annual growth rate of automotive e9'orts during the 'eriod ,&&&-&1 to ,&&2-&/ was ?,.#, 'er cent. @9'orts during ,&&/-,&&/ and ,&&4-,&&" are e9'ected to grow over ,& 'er cent. Im'ortsM @uro'e is the biggest im'orter of cars from India, while African nations largely account for the im'ort of buses and trucks. 7hina is most recently making inroads into this market. (he 5outh-@ast Asian region is the 'rime destination for Indian two wheeler. S"&es*

-assenger =ehiclesM 3rowth in sales of 'assenger vehicles was 1".%2> in ,&&/. (his was almost three times the growth witnessed in ,&&2. 5ale of 'assenger cars e9'anded by ,&.&>. @9'ort of 'assenger vehicles increased by 1,.#>

Btility =ehiclesM 1,.%>

In,est-entM Among the car com'anies that are investing in India are B5 automakers 3eneral !otors and Ford, 3ermany<s ;!$ and Faimler7hrysler A3, France<s Eenault, 1a'an<s 5uAuki, (oyota and onda, and 5outh Jorea<s yundai. (here is also a boom in auto ancillary com'anies. India is an attractive outsourcing destination for global auto com'anies because of its strong engineering skills and low costs. 5ourcing 'arts from India is 1&-,&> chea'er for B5 auto makers and about 2&> chea'er for their @uro'ean counter'arts.

In !"n A(t% M"r.et /r%$t# 0%r t#e 1e"r 2334536

(he domestic automobile industry sales grew 1,." 'er cent at "#,1&,,,% units as against 4",#4,/,# units in ,&&%-&2. (he automotive industry crossed a landmark with total vehicle 'roduction of 1& million units. According to the 5ociety of Indian Automobile !anufacturers *5IA!+, car sales was ",",,&#% units against ",,&,14# units in ,&&%-&2. (he growth of domestic 'assenger car market was 4.2 'er cent 7ar e9'orts stood at 1,4&,1#? units against 1,/&,/4& units in ,&&%-&2. (he two-wheeler segment, the market grew by 1?./ 'er cent with 4&,2/,?14 units against /,,&#,4/2 units in ,&&%-&2. !otorcycles had the u'ward march, 14.1 'er cent in domestic market touching 2",12,%14 units against %#,/%,42? units in ,&&%-&2. 5cooter segment grew by 1.2 'er cent, fall at #,&",12# units against #,,,,%," units in ,&&%-&2. 7ommercial vehicles segment grew at 1&.1 'er cent with ?,2&,/"? units against ?,1",%?& units in ,&&%-&2.

1&

!edium and heavy commercial vehicles managed a growth of %.2 'er cent against ,? 'er cent growth in the year ended !arch ?1, ,&&2. .ight commercial vehicles sales growth was 1#.% 'er cent at 1,%?,,?4 units against 1,1#,#,% units in ,&&%-&2. (hree-wheelers sales rose by 14 'er cent at ?,/&,1"4 units against ?,&4,"/, units in ,&&%-&2.

(he economy of India is emerging. (he following table show the ranking of India in the 'ast four years. R"n. 1 2 8 % 4 6 4 2334 7hina In !" (hailand =ietnam B5A Eussia Jorea 7hina (hailand In !" =ietnam B5A Eussia Indonesia 2337 7hina (hailand B5A =ietnam In !" Indonesia Jorea 2338 7hina (hailand B5A Indonesia =ietnam In !" Jorea 2332

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E,ents "n -!&est%nes A behind- the- scenes look into the making of one of India<s most vibrant industries. (he landmarks along the way... 192:5 (he first im'orted car was seen on Indian roads 19725 industan !otors incor'orated 19775 -remier automobiles started 197:5 First car manufactured in India 19485 (he 3overnment of India decreed that only those firms which have a manufacturing 'rogram should be allowed to o'erate 19445 Hnly seven firms, namely, !, A-I, A.., 5!-I., -A., !0 ! and (@.7H received a''roval. 1963 5 19;3 5 (he two, three wheeler industry established a foothold in the Indian scenario. 19;3 5 19:3 5 6ot much change was witnessed during this 'eriod. (he major factors affecting the industry were the im'lementation of the !E(- Act* !ono'olies and (rade Eestrictive -ractices Act+, F@EA *Foreign @9change Eegulation Act+ and the Hil 5hock of 1#4? and 1#4#.

1,

19:3 5 1993 5 (he first 'hase of liberaliAation was announced by the 3ovt. -$ith the liberaliAation of the 3overnment<s 'rotectionist 'olicies, the advantages hitherto enjoyed by the Indian car manufacturers like mono'oly, oligo'oly, slowly began to disa''ear.

(his 'eriod is also marked by the entry of a large number of firms in the market. % 1a'anese manufacturers entered the 7ommercial =ehicle and (wo- $heeler market. (he 3overnment agreed to the demand for allowing foreign collaboration in the automobile sector. (he industry witnessed a resurgence due to major 'olicy changes like rela9ation in !E(- and F@EA, delicensing of some ancillary 'roducts, broad banding of the 'roducts and modification in the licensing 'olicy. Also, the concessions it gave to the 'rivate sector and the new foreign collaboration 'olicy, all resulted in higher growth and better 'erformance of the industry than in the earlier decades. (he 3overnment of India tied u' with 5uAuki Inc. of 1a'an which 'roduced India<s most successful car- the !aruti. 1991 5 Bnder the 3ovt.<s new 6ational Industrial -olicy, the license raj was dis'ensed with, and the automobile industries were allowed to e9'and freely. 1998 5 $ith the winds of liberaliAation swee'ing the Indian car market, many multinationals like Faewoo, -eugeot, general !otors, !ercedes-;enA and Fiat came into the Indian car market. 199; 5 (he 6ational ighway -olicy was announced which will ho'efully have a 'ositive im'act on the automobile industry. (he 3overnment also laid down the emission

1?

standards to be met by car manufacturers in India in the coming millennium. (here were two successively stringent emission levels to be met by A'ril ,&&& and A'ril ,&&2, res'ectively. (hese norms were benchmarked on the basis of those already ado'ted in @uro'e, hence the names @uro I *e)uivalent to India ,&&&+ and the Indian e)uivalent of @uro II. 1999 5 (he onble 5u'reme 7ourt 'assed an order directing all car manufacturers to com'ly with @uro I emission norms *India ,&&& norms+ by the 1st of !ay, 1### in 6ational 7a'ital Eegion*67E+ of Felhi. (he deadline was later e9tended to 1st 1une, 1###.

1%

1.2 Intr% ()t!%n t% t#e t%p!)* Br"n E<(!t1

;rands vary in the amount of 'ower and value they have in the market 'lace. At one e9treme are the brands that are not known by most buyers in the market. (hen there are brands for which buyers have a fairly high degree of Br"n A$"reness *measured either buy brand recall or recognition+. ;eyond this are brands which high degree of Br"n A))ept"=!&!t1. In other words, brands that most customers would not resist buying. (here are brands that are selected over the other. Finally, there are brands that command a high degree of Br"n L%1"&t1. Aaker distinguishes five levels of customer attitude their brands, from lowest to highestM 1+ 7ustomer will change brands es'ecially for 'rice reasons, 6o ;rand loyalty. ,+ 7ustomer is satisfied. 6o reason to change the ;rand. ?+ 7ustomer is satisfied and would incur costs by changing brand. %+ 7ustomer values the brand and sees it as a friend. 2+ 7ustomer devoted to the ;rand. ;rand @)uity is highly related to how many of brands customers are in the classes three, four or five. It is also related to the degree of ;rand name recognition, 'erceived brand e)uity, strong mental 0 emotional associations and other such as 'atents, trade marks and channel relationshi's.

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1.8 BRAND E>UITY (he term ;rand @)uity refers to the inherent in a well-known brand name from customer 'ers'ective. ;rand @)uity is the added value bestowed on the 'roduct by the brand name. It can be conce'tualiAed from the three different 'ers'ectivesAt the firm level, it is the incremental cash flow arising from the use of the brand name. At the trade level, it is the leverage from the use of the brand name. At the consumer level, it occurs when the consumer is familiar with the brand and holds some favorable, strong and uni)ue associations in memory. 7onsumer based ;rand @)uity arises from consumer being more likely to be aware of some brands in addition to 'ossibly 'referring some brands over others. ;rand e)uity can also to be defined as a set of assets *0liabilities+ linked to a brands name symbol that adds to *or subtracts from+ the value 'rovided by a 'roductNservice to a firm andNor to that of firms customers. !ajor assets categories areM ;rand Awareness ;rand loyalty ;rand Association -erceived Ouality I-p%rt"n)e %0 Br"n e<(!t1M ;uilding ;rand e)uity has become increasingly im'ortant for com'anies. ;rand @)uity is derived from many things including a re'utation for Ouality 0 high brand awareness, but the key element in the association that are evoked in the consumer by the brand name, symbol and 'acking. (hese associations can be Phard or functional *'lant 0 machinery+, as well as Psoft or symbolic *brand name+. (ogether these give the brand a Q'ersonalityR. 1/

(hus, just as 'eo'le have individual 'ersonalities, brands too can develo' 'ersonality like association if the advertising for these brands identifies and develo's a consistent image that is reinforced overtime. A brand can have high )uality, or value as a tradable asset, for many reasons. According to Aaker, brands have e)uity because they have high awarenessL many loyal consumersL a high re'utation for 'erceived )ualityL 'ro'rietary brand assets such as access to scarce distribution channels or to 'atentsL or kind of brand associations *such as 'ersonality association+.

-erceived Ouality 6ame awareness ;rand .oyalty ;rand @)uity 6ame 5ymbol ;rand association Hther -ro'rietary assets

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-rovides value to -rovides value to firm by It customer is clear from the above figure that ;rand e)uity is ca'tured in the name 0 symbol of by enhancing enhancingM customersM @fficiency 0 effectiveness of the brand. Inter'retationN marketing 'rogrammes -rocessing of ;rand loyalty igh ;rand @)uity 'rovides a number of com'etitive advantagesM information -ricesNmargin 7onfidence in ;randcosts e9tension (he com'any will enjoy reduced marketing because of high level of (he decision (rade leverage consumer brand awareness. Bse satisfaction 7om'etitive advantage (he com'any will have more trade leverage bargaining with dealers. (he com'any can charge a higher 'rice than its com'etitors because the brand has a higher 'erceived )uality. (he com'any can more easily launch brand e9tension since the brand name carries high credibility. QA ;rand name i.e. well know and well liked by consumers has greater e)uity and is worth more.R QA 'roduct is something that is made in a factoryL a brand is something that is brought by customer. A com'etitor can co'y a 'roductL a brand is uni)ue. A 'roduct can )uickly outdatedL a successful brand is timeless.R 5 Step#en ?!n@ BRAND LOYALTY*

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QIou have to have a brand become a friendR 5 Fre P%sner For any business it is e9'ensive to gain new customers 0 relatively ine9'ensive to kee' e9isting customers es'ecially with or even like the brand. In Fact, in many markets there is substantial inertia among customers even if there are very low switching costs and low customer commitment to the e9isting brand. (hus, an installed customer base has the customer ac)uisition investment largely in its 'ast. Further at least some e9isting customers 'rovide brand e9'osure and reassurance to new customers.

Me"s(r!n@ Br"n L%1"&t1* In order to have a clear understanding of brand and its management, it is useful to consider different a''roaches to its measurement. A''roaches to measure brand loyalty are ;ehavior measures. 5witching costs. !easuring satisfaction. .inking of the brand. 7ommitment.

T#e str"te@!) ,"&(e %0 =r"n &%1"&t1* (he brand loyalty of e9isting customers re'resents a strategic asset that if 'ro'erly managed and e9'loited, has the 'otential to 'rovide value in several ways. Eeduced marketing cost (rade leverage

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 (ime to res'ond to com'etitive threats Attract new customers ;rand awareness created Eeassurance to new customers

BRAND AWARENESS* QA good name is better than richesR. Cer,"ntes ;rand awareness the ability of a 'otential buyer to recogniAe or recall that a brand is a member of certain 'roduct category. A link between 'roduct class and brand is involved. ;rand awareness involves a continuum ranging from an uncertain feeling that the brand is recogniAed, to a belief that is the only one is the 'roduct class. (hree very different levels of brand awareness can 'resent the continuum. (he role of brand awareness in brand e)uity will de'end u'on both the conte9t and u'on which level of awareness is achieved. T#e "$"reness p1r"-!

(o' of mind ;rand recall ;rand recognition Bnaware of the brand

PERCEIVED >UALITY* QOuality is the 'atent 'rotection we have got.R A"-es R%=!ns%n 7@H, American e9'ress

,&

-erceived )uality can be defined as the customers 'erce'tion of overall )uality or su'eriority of a 'roduct or service with res'ect to its intended 'ur'oses, relative to alternatives. -erceived )uality is first 'erce'tion by customers. It thus differs from several related conce'ts. 5uch asM Actual or objective )uality- the e9tend to which the 'roducts or services delivers su'erior service. -roduct based )uality- the nature 0 )uantity of ingredients, features or service included. !anufacturing )uality, conformance to s'ecification the Q Sero FefectR goal.

BRAND ASSOCIATIONS* QA man is known by the com'any he kee's.R An%n1-%(s (he underlying value of brand name is often based u'on s'ecified associations linked to it. It is anything Plinked in memory to a brand. (he associations not only e9it but also have a level of strength. A link to brand will be stronger when it is based on many e9'erience or e9'osures to communications, rather than few. It will also be stronger when a network of other links su''orts it. A brand image is a set of associations, usually organiAed in some meaningful way. -ositioning is closely related to the associations 0 image conce'ts e9ce't that it im'lies a frame of reference, the reference 'oint usually being com'etition. A Qbrand 'ositioningR does reflect how 'eo'le 'erceive a brandL however, Q'ositioning strategyR can also be used to reflect how a firm is trying to be 'erceived. T#e str"te@!) ,"&(e %0 =r"n "ss%)!"t!%ns* (he underlying value of a brand name is its set of associations, its meaning to 'eo'le. Associations re'resent bases for 'urchase decision and for brand loyalty. ,1

Help process/ retrieve information Differentiate/position ;rand Associations Reasons to buy

Create positive attitudes/feelings

Basis for extensions

OTHER PROPERIETARY BRAND ASSETS ;rand assets are 'atents, trademarks 0 channel relationshi'. ;rand assets will most valuables if they inhibit or 'revent com'etitors from eroding a customer base 0 loyalty. (hese assets can take several forms of e9am'le a trademark will 'rotect brand e)uity from com'etitors who might want to confuse customers buy using a similar name symbol or 'ackage. A 'atent, if strong 0 relevant to customer choice, can 'revent direct com'etition. A distribution channel can be controlled by a brand because of a history of brand 'erformance. (o be very relevant, assets must be tied to the brand. If distribution is a basis for brand e)uity, it needs to be based on a brand rather than on a firm.

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CHAPTER 5 2 RESEACH DESI/N

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2.1 Intr% ()t!%n

Eesearch sim'ly means a search for facts- measures to )uestions and solution to 'roblem. It is 'ur'osive investigation. It seeks to find e9'lanation to une9'lained 'henomenon, to clarify the doubt full facts and to correct the misconceived facts. (he encyclo'edia of social science defines research as the mani'ulation of generaliAing to e9'and, correct or verifies knowledge. Eesearch design is the detailed blue 'rint used to guide a research towards its objective. (his is a 'art of marketing research. !arketing research is systematic design, collection, analysis and re'orting data and finding relevant to a s'ecific marketing situations faced by the com'any. !arketing research is likely to 'rovide a fuller a''raisal of the brands strength, character and uni)ueness that the brand owner many 'osses through hisNher own e9'erience and collection. (he 'rimary focus of study was to measure and assess consumer 'erce'tion of different 'remium brands and 'reference over other 'remium brands along with s'ecific dimensions of brand e)uity, brand loyalty and awareness, 'erceived )uality and its association the research design em'loyed for this 'ur'ose of the study was directive in nature and a sim'le survey was conducted for the 'ur'ose of generation.

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2.2 STATEMENT OF THE PROBLEM

In India there are a no. of foreign 'layers in the Indian car industry, these 'layers have influence the industry to a large e9tent, and have driven the Indian consumers in becoming brand consciousness. 5ince brand 'lays a im'ortant role in the decision making 'rocess of a consumer, t#e pr%Be)t #e&ps !n ! ent!01!n@ $#et#er 0%re!@n =r"n s %r In !"n =r"n s #",e -%re =r"n e<(!t1 !n t#e In !"n -"r.et.

2.8 OBAECTIVES OF THE STUDY

(o understand the customer loyalty of various brands in the Indian market. (o analyAe the user satisfaction of various brands. (o identify the users 'erce'tion with res'ect to brand value. (o assess the customers needs in terms of 'roduct )uality and service (o find the advertisement recall of various brands

2.7 SAMPLIN/
(he sam'ling to carry out the research study is undertaken in two 'hasesM (he first 'hase is used to identify the various brands in the Indian car market and to determine the to' five brands by sim'le random sam'ling of sam'le siAe2&. (he second 'hase is carried out by stratified random sam'ling by drawing sam'les of ,& each from the to' five brands.

2.4 SAMPLE SICE*

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(he sam'le siAe of 2& in the first 'hase and 1&& in the second 'hase is taken to analyAe the above stated objectives.

2.6 SAMPLE TYPE*

(he sam'le consists of all the 'o'ulation those who own cars and the 'eo'le who own the cars which belong to any of the to' five brands.

2.; INSTRUMENTATION*
An o'en ended and close ended )uestionnaire was administered su''orted by a 'ersonal interview to draw detailed e9'lanations on the factors which is based on the survey method. (he instrument used to collect the data from 'rimary source is structured )uestionnaire, which consists of number of )uestions 'rinted in a systematic form. Information was collected from various car owners. (ools used in analysis will be @9cel.

2.: HYPOTHESIS*
oM Foreign 'layers do not have more brand e)uity as com'ared to Indian 'layers in the Indian car market. 1M Foreign 'layers have more brand e)uity as com'ared to Indian 'layers in the Indian car market.

2.9 DATA COLLECTION*

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-rimary data being collected afresh from the from the car owners with the hel' of )uestionnaire. 5econdary data are used such as books, survey re'orts, Internet etc.

2.13 LIMITATIONS OF THE STUDY*

(he study is confined only to ;angalore city car users. (he study is limited only to to' brands and not 'remium brands. (ime limit is restricted only to 1 month. (he results are based on the 'resent 'erce'tion in the minds of the customers.

CHAPTER 5 8 PROFILE OF COMPANIES TA?EN FOR RESEARCH

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8.1 TATA /ROUP

@stablished in 1#%2, (ata !otors is India<s largest automobile com'any, with revenues of Es ,%,&&& crore *B5F 2.2 billion+ in ,&&2-&/. (he com'any began manufacturing commercial vehicles in 1#2% with a 12-year collaboration agreement with Faimler ;enA of 3ermany. It is the leader by far in commercial vehicles in each segment, and the second-largest in the 'assenger vehicles market with winning 'roducts in the com'act, midsiAe and utility vehicle segments. (he com'any is the world<s fifth-largest medium and heavy commercial vehicle manufacturer. Are"s %0 =(s!ness (ata !otors< 'roduct range covers 'assenger cars, multi-utility vehicles as well as light, medium and heavy commercial vehicles for goods and 'assenger trans'ort. 5even out of 1& medium and heavy commercial vehicles in India bear the trusted (ata mark. (he com'any develo'ed India<s first indigenously develo'ed light commercial vehicle, India<s first s'orts utility vehicle and, in 1##", the (ata Indica D India<s first indigenously ,"

manufactured 'assenger car. $ithin two years of launch, (ata Indica became India<s largest selling car in its segment. C%--er)!"& ,e#!)&e =(s!ness (n!t (he com'any has over 1?& models of light, medium and heavy commercial vehicles ranging from two tonnes to forty tonnes, buses ranging from 1,-seaters to /&-seaters, ti''ers, s'ecial 'ur'ose vehicles, off-road vehicles and defence vehicles. P"ssen@er )"r =(s!ness (n!t (he com'any<s 'assenger car range com'rises the com'act car Indica, the midsiAe Indigo and Indigo !arina in both 'etrol and diesel versions. (he (ata 5umo, the (ata 5afari and its variants are the com'any<s multi-utility vehicle offerings. In addition to the growth o''ortunities in the domestic market, the com'any is 'ursuing growth through ac)uisitions. In ,&&%, it ac)uired the Faewoo 7ommercial =ehicle 7om'any, Jorea<s second-largest truck maker, now named (ata Faewoo 7ommercial =ehicles 7om'any. In ,&&2, (ata !otors ac)uired a ,1-'er cent stake in remaining stake as well. Rese"r)# "n e,e&%p-ent is'ano 7arrocera, a re'uted 5'anish bus and coach manufacturer, with an o'tion to ac)uire the

(ata !otors invests a''ro9imately u' to , 'er cent of its annual turnover on research and develo'ment, with an em'hasis on new 'roduct N aggregates develo'ment and technology u'gradation. Its @ngineering Eesearch 7entre in -une em'loys over 1,%&& scientists and engineers and has India<s only certified crash-test facility and hemi-anechoic chamber for testing of noise and vibration. (he com'any also draws on the resources of leading international design and styling houses like the Institute of Fevelo'ment in Automotive @ngineering, 5-A, Italy, and 5tile ;ertoni, Italy. (he com'any has also been im'lementing several environmentally

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sensitive technologies in manufacturing 'rocesses and uses some of the world<s most advanced e)ui'ment for emission checking and control. En,!r%n-ent"& resp%ns!=!&!t1 (ata !otors has led the Indian automobile industry<s anti-'ollution efforts through a series of initiatives in effluent and emission control. (he com'any introduced emission control engines in its vehicles in India before the norm was made statutory. All its 'roducts meet re)uired emission standards in the relevant geogra'hies. !odern effluent treatment facilities, soil and water conservation 'rogrammes and tree 'lantation drives at its 'lant locations contribute to the 'rotection of the environment and the creation of green belts.

E+p%rts (ata !otors< vehicles are e9'orted 'rimarily to @uro'e, Africa, the !iddle @ast, 5outh and 5outh @ast Asia and Australia. (he com'any also has assembly o'erations in !alaysia, ;angladesh, Bkraine, Jenya and Eussia. Hver the years, the com'any has received more than 2& awards from the government of India<s @ngineering @9'ort -romotion 7ouncil, for its e9'ort initiatives. $hile currently about 1% 'er cent *as on !arch ?1, ,&&2+ of its revenues are from its international business, the com'any intends to increase its international business through organic and inorganic growth routes.

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8.2 MARUTI UDYO/ LTD B").@r%(n .imited *!B.+ was established in Feb 1#"1 through an Act of -arliament, as a 3overnment com'any with 5uAuki !otor 7or'oration of 1a'an holding ,/ 'er cent stake. It was entrusted the task of achieving the followingM

!oderniAation of the Indian Automobile Industry. -roduction of vehicles in large volumes -roduction of fuel-efficient vehicles. 5uAuki was an obvious choice because of its un'aralled e9'ertise in small cars. (he 1oint =enture agreement was signed between 3overnment of India and 5uAuki !otor 7om'any *now 5uAuki !otor 7or'oration of 1a'an+ in Hct 1#",. (he com'any went into 'roduction in a record time of 1? months and the first car was rolled out from !aruti Bdyog .imited 3urgaon in Fecember, 1#"?. C"r M"r.et S)en"r!% $hen !aruti began o'erations in 1#"?, there were only two other car com'anies in India and the total siAe of the Indian 'assenger car market was a measly %&,&&& units 'er year. From the start, !aruti caught the imagination of Indian car customers and launched four new models, including a hatchback, a mini multi'ur'ose van, an entry sedan and a 5B=, over the ne9t decade. @ach of these models was an instant draw with the Indian consumers. 5uAuki !otor 7or'oration increased its stake on two occasions *,/TT %& TT 2& TT controlling stake and brought it to 2& 'er cent in the mid 1##&s *and to 2%> with 'rivatiAation in ,&&,+.

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St"te5%05t#e5"rt M"n(0")t(r!n@ F")!&!t!es (he 3urgaon 'lant com'rises of three fully integrated, state-of8the-art 'roduction facilities s'read over a s'rawling ,#4 acres. $hile the three 'lants have a total installed ca'acity of ?2&,&&& cars 'er year, several 'roductivity im'rovements over the years have made it 'ossible to manufacture nearly /,?&,&&& cars 'er year at these facilities alone. $orking towards the goal of making India a global hub for small cars, 5!7 and !B. have drawn u' an investment 'lan of Es #&&& crore in India u'to ,&1&. MULDs 0%(rt# )"r "sse-=&1 p&"nt E D!ese& P&"nt "t M"nes"r A brand new assembly 'lant at !anesar was inaugurated in February ,&&4. 5tarting with an initial ca'acity of 1&&,&&& cars 'er year, this 'lant will be scaled u' to 'roduce ?&&,&&& cars a year by ,&1&. Adjoining this new facility at !anesar is 5uAuki -owertrain India .imited *5-I.+, 5uAukis Fiesel @ngine manufacturing facility. (his 'lant was also inaugurated in February ,&&4. (hese facilities will meet 5!7 and !B.s global ambitions and are among 5!7s best 'lants worldwide. S(F(.! P%$ertr"!n In !" L!-!te Ds !ese& en@!ne "n tr"ns-!ss!%n p&"nt (he diesel engine 'lant is 5uAukis first such facility anywhere in the world. (his state-of-the-art 'lant will 'roduce world class diesel engine and transmissions for cars. 5uAuki -owertrain India .imited *5-I.+ is a joint venture com'any in which 5!7 holds 4& 'er cent e)uity with the rest held by !B.. (his facility has an initial ca'acity to manufacture 1&&,&&& diesel engines a year. (his will be scaled u' to ?&&,&&& engines 'er year by ,&1&. (he diesel engines manufactured at this 'lant will also be e9'orted to 5!7s worldwide o'erations . 5'read over /&& acres, the !anesar 'lant facilities also has, for the first time in the Indian automobile industry, a 5u''liers -ark. $ith three fully integrated state-of the-art 'lants at 3urgaon and the newly commissioned fourth assembly line at !anesar, !arutis 'roduction ca'acity at its 'eak !aruti is ca'able of 'roducing close to a million cars 'er annum by ,&1&.

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8.8 TOYOTA
(oyota Jirloskar !otor is a joint venture between (oyota !otor 7or'oration of 1a'an and Jirloskar 3rou' of India. (oyota !otor holds "#> e)uity of the com'any. 7amry, 7orolla, -rado and Innova are the successful cars of (oyota on Indian roads. Pr% ()t R"n@e %0 T%1%t" ?!r&%s."r M%t%r

7amry 7orolla -rado Innova

(oyota is one of the biggest vehicle manufacturers in the world and is widely known. (he com'any started by inventing the first 'ower loom in 1a'an at the end of the nineteenth century and revolutioniAed the te9tile industry of the country. In 1#1", 5akichi (oyoda and his son Jiichiro (oyoda established (oyoda 5'inning and $eaving 7om'any. 5akichi fulfilled his lifelong dream by creating an automatic loom in 1#,%. (oyoda Automatic .oom $orks followed in 1#,/. In the 1#,&, Jiichiro introduced himself in the automotive industry. e laid the foundation of (oyota !otor 7or'oration that was established in 1#?4. 5oon (oyota became the largest vehicle manufacturer in 1a'an with more than %&> market share. It made inroads into foreign markets in the late 1#2&s. (he first 7rown models launched in the B5A in 1#24. After that by 1#/2, models like 7orolla build its re'utation and sales. In India, (oyota !otor 7or'oration has launched with a joint venture with Jirloskar 3rou' as (oyota Jirloskar !otor .td. At (oyota, we view building vehicles as a community 'roject. $e invite you to learn about where the thousands of Americans who make u' (oyota live and work. 6ot only

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the individuals who sell (oyota and .e9us vehicles, but those who design, test, and manufacture our vehicles and com'onents using many B.5. sourced 'arts. In ,&&/, (oyota was engaged in a variety of 'rojects designed to solidify its foundations while continuing to grow. Hn the 'roduct front, .e9us launched its new flagshi' model, the .5, and the new global 7amry went on sale. In 1a'an, a new 7orolla range was introduced, em'hasiAing the im'ortance of this best-selling car. In manufacturing, several new 'rojects were started around the world. In !ay, manufacture of the 7amry began in 3uangAhou, 7hina, while in the Bnited 5tates, the Jentucky 'lant, which in Hctober celebrated ,& years of 'roduction, started manufacturing the first (oyota hybrid vehicle to be made in 6orth America, the 7amry ybrid. In 6ovember, the (e9as 'lant began 'roducing the new (undra truck, a key vehicle in (oyotas 6orth American lineu'. In 1a'an, (oyota !otor Jyushu, Inc. began full-scale o'erations at its engine factory, while (oyota !otor (ohoku 7o., .td. increased its manufacturing ca'acity. In human resources develo'ment, following the establishment of the Asia -acific 3lobal -roduction 7enter in (hailand in August ,&&2, (oyota established the 6orth American -roduction 7enter in the B.5. in February, and the @uro'ean 3lobal -roduction 7enter in the Bnited Jingdom in !arch. @stablished as branches of the 3lobal -roduction 7enter in 1a'an, these were created to s'read (oyotas manufacturing knowledge and skills throughout the world in 'ace with the ra'id growth of (oyotas overseas manufacturing. (he centers educate trainers for local manufacturing 'lants in all regions, with trainees 'assing on what they learn to team members on their return to their 'lants. In E0F, (oyota focused its efforts on three key areasM environment, safety and energy. It made a s'ecial effort in the area of the environment by e9'anding its lineu' of hybrid vehicles, and has worked on E0F relating to 'lug-in hybrid. In addition, as 'art of (oyotas efforts to res'ond to the diversification of energy, in ,&&4 (oyota 'lans to

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introduce a fle9 fuel vehicleU in the ;raAilian market that will run on 1&&> bio-ethanol fuel. From this 'oint on, based on the 'hiloso'hy of 'roviding Qthe right car, in the right 'lace, at the right time,R and in accordance with the infrastructure and customer needs of each region, (oyota will continue to 'romote efforts to develo' environmentally friendly technology and vehicles.

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8.7 HONDA onda !otor 7o., .td., o'erates under the basic 'rinci'les of CEes'ect for the IndividualC and C(he (hree 1oysC-commonly e9'ressed as (he 1oy of ;uying, (he 1oy of 5elling and (he 1oy of 7reating. Ees'ect for the IndividualC reflects our desire to res'ect the uni)ue character and ability of each individual 'erson, trusting each other as e)ual 'artners in order to do our best in every situation. ;ased on this foundation of Ees'ect for the Individual, C(he (hree 1oysC e9'resses our belief and desire that each 'erson working in, or coming into contact with our com'any, directly or through our 'roducts, should share a sense of joy through that e9'erience. In line with these basic 'rinci'les, since its establishment in 1#%", onda !otor 7o., .td., has remained on the leading edge by creating new value by 'roviding 'roducts of the highest )uality at a reasonable 'rice, for worldwide customer satisfaction. In addition, the 7om'any has conducted its activities with a commitment to 'rotecting the environment and enhancing safety in a mobile society. (he 7om'any has grown to become the world<s largest motorcycle manufacturer and one of the leading automakers. $ith a global network of %2%U subsidiaries and affiliates accounted for under the e)uity method, onda develo's, manufactures and markets a wide variety of 'roducts ranging from small general-'ur'ose engines and scooters to s'ecialty s'orts cars, to earn the 7om'any an outstanding re'utation from customers worldwide. !anufacturing and Fistribution 7onsistent )uality worldwide onda is a global com'any with manufacturing o'erations and sales networks all over the world. Furthermore, 'eo'le in numerous countries enjoy our 'roducts. (his global success is built u'on the renowned )uality of ondas 'roducts and made 'ossible by the 'assion and dedication of onda associates everywhere. $herever you are, you can onda began manufacturing motorcycles in always count on the )uality of onda 'roducts. .ocaliAing 'roduction to meet local needs ;elgium in 1#/?. In 1#",, onda became the first 1a'anese automaker to 'roduce

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'assenger cars *the Accord+ in the B.5. 5ince then, (hrough the introduction of

onda has established inde'endent onda continues

local o'erations around the world for research, develo'ment, marketing, and 'roduction. onda<s fle9ible manufacturing system, reducing the time and resources necessary to launch new models into 'roduction and im'roving the efficiency of manufacturing o'erations that meet regional needs. !oreover, the grou'ing of 'roduction 'rocesses into cohesive units has im'roved the working environment, raised 'roduct )uality, and further accelerated 'roduction. In the future, onda 'lans to further localiAe the 'roduction of engines and key com'onents for automobiles, motorcycles, and 'ower 'roducts, while simultaneously raising )uality and efficiency and accelerating our res'onse to the dramatically changing world.

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8.4 HYUNDAI yundai !otor is 5outh Jorea<s largest carmaker and si9th largest car maker in the world. yundai !otor India .imited * !I.+ is the second largest and the fastest growing car manufacturer in India. 5antro, 3etA, Accent, @lantra, 5onata @mbera and (uscon are the most successful brands of !I.. (he com'any is an I5H 1%&&1 for its sustainable environment management 'ractices. Pr% ()ts 5antro Ving 3etA Accent @lantra 5onata @mbera (ucson yundai !otor 7om'any * !7+ is a division of yundai Jia Automotive 3rou'. It is 5outh Jorea<s largest carmaker. It is head)uartered in Iangjae-Fong 5eocho-3u 5eoul. !7 is also the world<s si9th largest carmaker and o'erates the world<s largest integrated automobile manufacturing facility in Blsan, 5outh Jorea. In India the com'any is known by yundai !otor India .imited * !I.+. It is a wholly owned subsidiary of yundai !otor 7om'any and is the second largest and the fastest growing car manufacturer in India. 7urrently the com'aany markets ?, variants of 'assenger cars in si9 segments. 5antro in the ; segment, 3etA in the ;W, the Accent in the 7 segment, @lantra in the F segment, 5onata @mbera in the @ segment and the (ucson in the 5B= segments. !I. recorded combined sales of ,2,,"21 during calendar year ,&&2 with a growth of 14.,/> over 'revious year. It is the country<s fastest growing car com'any having rolledout 1&,&&,&&& cars in just #& months since its ince'tion and is the largest e9'orter of 'assenger cars with e9'orts of over Es. 1,"&& crores. (he com'any has recorded a growth of ,4.,> in e9'orts over the year ,&&%.

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(he com'any has been awarded the benchmark I5H 1%&&1 certification for its sustainable environment nt management 'ractices. Ouality. ;rand 'ower. (hese are the two 'riorities for H1(n "! !otor 7om'any as it 're'ares for the future. 6o longer content to follow and learn, yundai is now seeking to yundai<s lead the motor industry in sha'ing the evolution of motor vehicles. $ith

'ublicly stated goal of becoming one of the to' five carmakers in the world by ,&1&, the yundai brand will re)uire careful re'ositioning. !anagement realiAes that achieving this goal will re)uire strong determination, resolve but, above all, stronger 'ublic confidence in the yundai name. It will also carry with it a new set of res'onsibilities, such as greater trans'arency in management and the environmental, social and economic facets of sustainable develo'ment. ;y 'ublicly announcing a new global environment management body last year, yundai reiterated its commitment to leadershi' in the social s'here. yundai reinforced its 'lace as a to'-rated carmaker by winning the ,&&? 3lobal Automotive 5hareholder =alue Award 'resented by -rice$aterhouse 7oo'ers and Automotive 6ews. And for the second consecutive year, yundai ca'tured to' honors in the 7onsumers< 5atisfaction 5urvey conducted by 1.F. -ower and Associates which also rated the yundai 5onata first in its ,&&, and ,&&? Initial Ouality 5urvey. ;y active im'lementation of four management 'olicies in ,&&%, yundai will accelerate

the s'eed of develo'ment. First, yundai will ste' u' global management by establishing local su''ort systems across the globe to maintain momentum as a growing global 'layer, e9'and overseas manufacturing bases and raise E0F ca'abilities above the industry standard. 5econdly, by re'ositioning its brand identity to be known as a maker of refined and elegant automobiles yundai will enhance its brand value. And by im'roving its 'roduct develo'ment system yundai will ma9imiAe the com'any value. (hirdly, yundai will maintain its sustainable management ca'abilities. yundai will

devote itself to fulfilling social res'onsibilities as a global carmaker by develo'ment safer

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and more environmentally friendly vehicles while res'ecting fundamental values, striving for ethical management and e9'anding contributions to social causes. .astly, yundai will attach greater im'ortance to human resources. $e will e9'and the yundai !otor will reinforce its 'osition of strength and recruitment of engineers and global s'ecialists multi-lingual talented individuals who are at home anywhere in the world. A$"r s ,&&2

confidence by continually im'roving its management ca'abilities.

6o 1 @ntry !idsiAe 7ar< by Accent -etrol. 6o 1 @ntry !idsiAe 7ar< by Accent 7EFi. yundai 3etA became the <7ar of the Iear< by ;5 !otoring. yundai !otor India .imited became the <7om'any of the Iear< by ;5 !otoring. yundai 3etA became the <76;7 Autocar 7ar of the Iear.< yundai @lantra became the <;est =alue for !oney 7ar< by 76;7.

,&&?

yundai !otor India adjudged as the <7ar !aker of the year< at the I7I7I ;ank Hverdrive awards.

,&&,

yundai 5antro to''ed the <1F -ower Asia -acific Intial Ouality 5tudy *IO5+< that measures the 'roduct )uality for three consecutive years *,&&&, ,&&1 0 ,&&,+.

yundai 5antro to''ed the <1F -ower Asia -acific A'eal< study that measures customer satisfaction for three consecutive years *,&&&, ,&&1 0 ,&&,+.

yundai Accent to''ed the <1F -ower Asia -acific IO5< for ,&&, and the A-@A. study for ,&&1 0 ,&&,.

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CHAPTER 5 7 ANALYSIS E INTERPRETATION

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1. $hich brand do you own: (able %.1 Indian Foreign

,1

,#

Figure %.1

Brand Owned

Indian 42 !oreign "#

Indian !oreign

Interpret"t!%n* Foreign brands des'ite of them entering the Indian car market just few years back, we see from the above information that they have been able to ca'ture majority of the Indian car industry. In this rate it will be certain that in few years to come Indian car industry will be solely dominated only by the foreign 'layers.

,. (he various brands that a''eal to the Indian customers areM %,

(able %. , (ata !aruti (oyota yundai onda Ford 3eneral motors !ahindra Figure%. , 4 11 #
1%

2 ? , 1

Brands 'a,endra 2
+eneral motors 4 !ord * Honda %)

that appeal

$ata %&

'aruti 2%

Hyundai 2(

$ata 'aruti $oyota Hyundai Honda !ord +eneral motors 'a,endra

$oyota %(

Interpret"t!%n* (he information as given above shows that the foreign 'layers 'ut together have ??> of the market share while Indian brands have only 1#>. (his very much shows that the su'erior technology, design of the foreign 'layers a''eal to the Indian customers more than local 'layers. ?. $hat kind of service are you looking for:

%?

(able %. ?

Eeminders Free 'ick u' and dro'

1? 41

5ervice schemes

1/

Figure %. ? Kind of service

.ervice sc,emes %*

Reminders %& Reminders !ree pic- up and drop .ervice sc,emes

!ree pic- up and drop (%

Interpret"t!%n* From the above information we come to know that majority of the 'eo'le 'refer theyre to be 'icked u' and dro''ed from service since every one is busy with their work.

%. $hats the name of the brand Ad you have seen:

%%

(able %. %

Indian

2"

Foreign

%,

Figure %. % Advertisments seen

!oreign 42 Indian "#

Indian !oreign

Interpret"t!%n* In this case we see that Indian brands generally use the media *(=, 'rint+ more to 'romote their 'roduct as com'ared to foreign brands. (his shows that Indian brands s'end a lot of money and try to come out with the advertisements that a''eal to the customers.

%2

2. 7an you recollect the advertisement: (able %. 2

-artial

4,

Full

,"

Figure %. 2

Ad Recall

!ull 2# /artial !ull /artial (2

/. 7om'arison of Indian and foreign brands (able %. /

%/

Indian -erformance 5tyle andling ;rand name 5ervice %, %4 ?, ?4 %#

Foreign 2" 2? /" /? 21

Figure %. / Comparision
#) () *) ") 4) &) 2) %) )
rm

*# "# 42 4( "& &2 &(

*& 40 "% Indian !oreign

ce

dl in g

an

.t y

na

fo

Interpret"t!%n* (he above information shows that Indian customers 'refer foreign brands to Indian brands in terms of 'erformance, style, handling and brand name. 4. -eo'les loyalty towards the brands in 'urchasing their ne9t carM Figure %. 4

/e r

Br a

nd

%4

.e r

an

vi

ce

le

Brand change

different brand 4(

same brand "&

same brand different brand

". -eo'les 'reference in choosing their cars in ne9t 'urchaseM Figure %. " brand preference
4) &" &) 2" 2) %" %) " ) same brand different brand %0 %# India !oreign &4 20

#. $hy do you go for this 'articular brand:

%"

(able %. 4
1ttributes Brand 2oo-s/style /erformance /rice $otal Indian " ( 0 %0 4) !oreign # %% &% %) *) $otal %& %# 4) 20 %))

Figure %. # &" &) 2" 2) %" %% %) " ) Brand 2oo-s/style performance price " # ( 0 %) %0 Indian !oreign &%

%#

H1p%t#es!s* oM (he attributes *;rand name, looksNstyle, 'erformance and 'rice+ of foreign brands, does not affect 'eo'les selection of a 'articular brand when com'ared with Indian brands 1M (he attributes *;rand name, looksNstyle, 'erformance and 'rice+ of foreign brands, does affect 'eo'les selection of a 'articular brand when com'ared with Indian brands F%r-(&" C#! s<("reX *observed-@9'ected+ Y, @9'ected

*O5EG ., ., 4 4.% ., ., 4 4.%

*O5EGH2 .&% .&% %# 2%.4/ .&% .&% %# 2%.4/

Z*O5EGH2IJE .&&4/ .&&22 ?.&/ %.4, .&&21 .&&?4 ,.&%1 ?.1%

C#! s<("re T%t"&, KO5EG H2X 12.9: E Fegrees of freedomX *%-1+U*,-1+ X?

2&

(able value of 7hi 5)uare for *?, &.&2+ X 4."1 5ince, )"&)(&"te ,"&(e K12.9:G L t"=&e ,"&(e K;.:1G reBe)t H%. T#ere 0%r, A))ept H1. (hat is, 1M (he attributes *;rand name, looksNstyle, 'erformance and 'rice+ of foreign brands, does affect 'eo'les selection of a 'articular brand when com'ared with Indian brands.

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1&. $ith res'ect to your brand what does it convey to you. (able %. "

1ttributes .tatus 2uxury .afety 3conomy

Indian %4 0 " %&

!oreign 22 %2 ( %#

$otal &* 2% %2 &%

$otal

4%

"0

%))

Figure %. 1&
2" 2) %" %) " ) .tatus 2uxury .afety

Indian !oreign

2,

H1p%t#es!s* oM Indian ;rands in terms of status, lu9ury, safety and economy do not a''eal to the Indian consumers as com'ared to Foreign brands. 1M Indian ;rands in terms of status, lu9ury, safety and economy do a''eal to the Indian consumers as com'ared to Foreign brands.

F%r-(&" C#! s<("reX *observed-@9'ected+ Y, @9'ected

*O5EG -&.4/ &.?# &.&" &.,# &.4/ -&.?# -&.&" -&.,#

*O5EGH2 &.24" &.12, &.&&/ &.&"% &.24" &.12, &.&&/ &.&"%

Z*O5EGH2IJE &.&?# &.&1" &.&&1 &.&&4 &.&,4 &.&1, &.&&&" &.&&2

C#! s<("re T%t"&, KO5EG H2X 3.1396 E

2?

Fegrees of freedomX *%-1+U*,-1+ X? (able value of 7hi 5)uare for *?, &.&2+ X 4."1 5ince, )"&)(&"te ,"&(e K3.1396G M t"=&e ,"&(e K;.:1G A))ept H%. T#ere 0%r, ReBe)t H1. (hat is, Indian 'layers in terms of status, lu9ury, safety and economy do a''eal to the Indian consumers as com'ared to foreign brands.

11. ave you faced any 'roblem with your brand: (able %. #

2%

Attributes 7omfort andling -erformance 5ervice Ouality Availability and cost of s'ares (otal

Indian # / 2 " 2 ??

Foreign 2 2 " 2 2 ,"

(otal 1% 11 1? 1? 1& /1

Figure %.11
%) 0 # ( * " 4 & 2 % )

Indian !oreign

/erformance

Comfort

Handling

22

1vailability and cost of spares

.ervice 4uality

H1p%t#es!s* oM 7ustomers do not face more 'roblems with Foreign brands as com'ared to Indian ;rands 1M 7ustomer face more 'roblems with Foreign brands as com'ared to Indian ;rands

F%r-(&" C#! s<("reX *observed-@9'ected+ Y, @9'ected

*O5EG ?.? &.&2 -,.&? &.#4 -&.%1 1.%? &.&2 ,.&? &.#4 &.%1

*O5EGH2 1&."# &.&&, %.1, &.#%& &.1/" ,.&%2 &.&&,2 %.1,1 &.#%1 &.1/" 2/

Z*O5EGH2IJE 1.%% &.&&&% &.&2"/ &.1?% &.&?1 &.?1" &.&&&% &./#& &.12" &.&?4

C#! s<("re T%t"&, KO5EG H2X 2.:6; E Fegrees of freedomX *2-1+U*,-1+ X% (able value of 7hi 5)uare for *%, &.&2+ X #.%# 5ince, )"&)(&"te ,"&(e K2.:6;G M t"=&e ,"&(e K9.79G A))ept H%. T#ere 0%r, ReBe)t H1.

(hat is, oM 7ustomers do not face more 'roblems with Foreigns brands as com'ared to Indian ;rands.

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INTERPRITATION* Hn analyAing the entire )uestionnaire we come to known that in every way customer who own Foreign ;rands are far more satisfied than customers who own Indian ;rands. (he reason being that the foreign ;rands offer 'roducts that are more su'erior in terms of tecnonology, )uality, looks, style, 'erformance etc., so 'eo'le are willing to 'ay e9tra for the same. In most of the )uestions asked the foreign brands are most 'referred to own and out beat the Indian ;rands in all de'artments. 7ustomer who own Indian ;rands are willing to change their ;rand and go for a foreign brand in their ne9t 'urchase, this shows that these foreign brands are slowly eating into the Indian car market and very soon may be in the ne9t few years they will dominate, this again will lead to tough com'etition among themselves with each foreign com'any introducing new su'erior )uality cars and fighting their way to become the leaders in the Indian 7ar !arket. $ith many foreign ;rands entering the Indian 7ar market and slowly ca'turing the market, my study was to find out $#et#er F%re!@n =r"n s %r In !"n =r"n s #",e -%re =r"n e<(!t1 !n t#e In !"n )"r -"r.et, and for knowing the same the y'othesis framed wasM oM Foreign ;rands do not have more brand e)uity as com'ared to Indian ;rands in the Indian car market. 1M Foreign ;rands have more brand e)uity as com'ared to Indian ;rands in the Indian car market.

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Hn doing the y'othesis for three )uestions as shown above using 7hi 5)uare, we see that the Foreign ;rands are more 'referred to the Indian customers, on the basis of the test conducted and the results favoring the Foreign ;rands, relating this to my main y'othesis I have come to the conclusion thatM Eeject & and acce't 1. (he study 'roved that Foreign ;rands have more ;rand e)uity and Indian ;rands in the Indian car market.

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CHAPTER 5 4 FINDIN/S, SU//ESTIONS AND CONCLUSION

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4.1 FINDIN/S

Hn com'leting the 'roject here are my findingsM 1. Foreign ;rands have more ;rand e)uity and Indian ;rands in the Indian car market. ,. Foreign brands are more su'erior to Indian brands in term of comfort, handling, 'erformance, looks and service )uality. ?. Foreign brands a''eal more to the customer in terms of status, lu9ury more as com'ared to the Indian brands. %. Foreign brands are a bit more e9'ensive than Indian brands. 2. Foreign brands have a better brand name as com'ared to the Indian brands. /. 7ustomers face more 'roblems with Indian brands as com'ared to foreign brands. 4. 7ustomers owing foreign brands are ha''y with their brand and are willing to stick on to their brand in their ne9t 'urchase, this shows that foreign brands have more brand loyalty. ". !ajority 7ustomers owing Indian brands are 're'ared to change their brand by going in for a foreign brand, this shows that Indian brands have less brand loyalty as com'ared to foreign brands. #. 7ustomers owing both Indian as well as foreign brands want better service schemes, want a free 'ick u' and dro' of their cars at the time of service and reminders should be given when its time to service their car. 1&. In terms of advertisement recall, customers remember Indian car advertisements as more as com'ared to foreign brands. !ajority of customers only remember the advertisement 'artially.

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4.2 SU//ESTIONS
1. Indian brands have to better in on their technology, )uality so that they can kee' u' with the foreign brands. ,. Indian brands should formulate strategies to im'rover their brand names. ?. 5ince foreign brands have better technology, so the Indian brands have to try and ado't the same technology. %. Foreign brands advertisements are less effective in terms of customer recollection, so these brands have to im'rove on their advertisement strategy. 2. In terms of service )uality, 'erformance etc customers face 'roblems with their brands, therefore Indian brands should im'rove on these as'ects so that their customers are ha''y and become more brand loyal. /. ;oth Indian and Foreign brand have to im'rove their service )uality and offer various schemes, free 'ick u' and dro' of their customers car.

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4.8 CONCLUSION

India is one of the largest automobile markets in the world, with over 12 brands, each of them fighting it out to become the market leader by 'roducing better cars with su'erior technology at com'etitive 'rices. Among the brands in the Indian market, majority of them are foreign brands, leaving the Indian brands to fend for themselves. (hese foreign brands offer the Indian consumers a array cars that are of high )uality and which easily out 'erform cars 'roduce by Indian brands in almost all de'artments be it 'erformance, handling, technology, comfort looks etc. Foreign brands a''eal to the customers more, it is for this reason that we see foreign brands are beginning to dominate the Indian market and it will not be along when we find that there will only be foreign brands in the Indian market.

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BIBLIO/RAPHY

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REFERENCES*
Favid A Aaker, !anaging brand e)uity and ca'italiAing on the value of brand name. 1ean 6oel Ja'ferer, strategic brand managementM 7reating and sustaining brand e)uity long term *second edition+ -hili' Jotler, P!arketing !anagement, 1,th edition, -rentice- all India, 6ew Felhi, ,&&/ 7.E.Jothari, PEesearch !ethodology, ,nd edition, $ishwa -rakashan, 6ew Felhi, ,&&1 Auto India !agaAine.

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