Pricing-Automobile Sector

Alyn Varghese
Bhumika Vagrecha
Dharmesh Mehta
Sainatth Wagh
Sneha Samuel
Vrishali Sinha
A u to m o b ile se cto r

 It is one of the core sectors of Indian economy.

 the advent of new business and manufacturing
practices in the light of liberalization and
globalization.

 Competition has changed the sector.

 Entry of new foriegn players.

 Indian Automobile sector is growing at 18% per
annum.
C o n td …
Country's passenger car sales grew 22%, the
highest growth rate in current financial
year.
Passenger car and motorcycle segment is
set to grow by 8-9%.
The production of passenger cars in India is
expected to grow to over 14 million units in
2014-2015
The sales are expected to increase at a rate
of 10% per annum.
In February 2009, monthly sales of
passenger cars in India exceeded 100,000
units.
S e g m e n ta tio n - A u to m o b ile
se cto r
M a rke t S h a re
Four Wheeler Segments :
Key Players :
Notable Indian automobile
manufacturers
 Ashok Leyland
 Mahindra: Major, Xylo, Scorpio.
 Maruti Suzuki: 800, Alto, WagonR, Estilo, AStar,
Ritz, Swift, Swift DZire, SX4, Omni, Versa,
Gypsy
 Tata Motors: Nano, Indica, Indigo, Sumo, Safari,
TL.


Electric car companies in India



 Ajanta Group
 Mahindra
 Hero Electric
 REVA

Locally manufactured Automobiles of
Multi - national Companies

Audi: A4, A6.

BMW: 3 Series, 5 Series.

Chevrolet: Spark, Aveo U-VA, Aveo, Optra, Cruze,

Tavera.
Fiat: Palio, Grande Punto, Linea.

Ford: Ikon, Fiesta, Fusion, Endeavour

Honda: Jazz, City, Civic, Accord.

Hyundai: Santro, i10, Getz, i20, Accent, Verna, Sonata.

Mercedes-Benz: C-Class, E-Class

Mitsubishi: Lancer, Lancer Cedia.

Renault: Logan

Škoda: Fabia, Octavia, Laura.

Toyota: Corolla, Innova, Fortuner

Volkswagen: Jetta, Passat.


Psych o lo g ica lPricin g

Maruti 800 — Rs . 2 , 37 , 898 /- Alto LX — Rs . 2 , 99 , 000 /-

T h is p rice o f A lto LX d e lib e ra te ly ke p t in th e ra n g e b e tw e e n

th e p rice o f M a ru ti8 0 0 a n d Z e n .

Maruti Zen --- Rs . 3 , 24 , 103 /-/-

Discriminatory Pricing

Honda City

Same car sold at different prices based on their

geographical locations .
E.g.: Cars in Delhi, Haryana and Chandigarh are much cheaper than other Indian cities.

This is because of two critical factors :

1.Insurance rates
2.Road Tax
Price Wars

Hyundai Santro Ford Fiesta

Started when the carmakers in India slashed the prices to sustain
their sales in the market.

Hyundai Santro started selling its car at its 1998 launch price of
2,99,000 down from the regular price of 3,33,000

As a result Ford’s Indian Unit had to cut its price by upto Rs.91000.

Because of this price war, Toyota Kirloskar had to put the launch of
their Prius Hybrid on hold.
Pricing Method:
 Target Return Pricing:
Target pricing is used by general motors,
which price its automobiles to achieve a 15-
20 percent ROI.


The target pricing method is used most often

by public utilities, like electric and gas
companies, and companies whose capital
investment is high, like automobile
manufacturers.


  Premium pricing:
 It is a strategy by which prices are set distinctly
higher than average to reflect better product
quality, exclusivity or status.
 E.g. Mercedes-Benz, Ferrari, Audi, Bentley,
Porsche.



 Perceived Value Pricing:


It is a market-based approach to pricing

wherein the price is set by estimating what
the perceptions of potential consumers are
regarding the value of the product.
Market research is a very important component
of this type of pricing.


Honda Jazz
 Tying:
It is the practice of making the sale of one
good (the tying well) to the customer
conditional on the purchase of a second
distinctive good (the tied good).


Vertical tying is the practice of requiring

customers to purchase related products or
services from the same company.


For example, a Hyundai car can only be

serviced by its dealers.

Discount Pricing

Chevrolet Spark

It is a pricing method which is generally offered during the

festive seasons or during special occasions.

E.g.: General Motors offered a massive discount available on
Chevrolet Spark during Diwali. It was being offered at a starting
price of Rs 2.79 lakh.
Penetration Pricing

TATA Nano

It is a pricing method whereby the organisation sets a low price to

increase sales and market share.

E.g.Nano which is priced at around one lakh is a prime example of
penetration pricing.

Aims at gaining high market share.

 Product Line Pricing:



 Optional Feature Pricing:

Thank You!!!!