The Indian Automotive Industry

Market Overview Passenger Vehicle's

Domestic sales of passenger vehicles have grown at a CAGR of 12.2% from 1.2 million units in 2004-05 to 1.8 million units in 2008-09 Passenger cars , which account for 78% of total PV market share, grew at a CAGR of 15% This segment is expected to grow at 12% annually and reach 3.75 million units by year 2014

Domestic sales of passenger vehicles 2008-09 2007-08 2006-07 2005-06 2004-05 0 1.62 1.52 1.32 1.11 1.02 0.5 1 Million Units *Source : SIAM 0.19 0.18 1.5 2 0.22 Cars Utility Vehicles 0.21 0.24

Market Overview Passenger Vehicle's

The production of PV in India has increased three fold over the last decade

Segment Share in PV ( 2008 09 )

Key Insights

21%
India is primarily a small car market , with small cars constituting 75% of total market share

79%

India is estimated to become the sixth largest passenger car market in the world by 2014

Passenger Cars

Utility Vechicles

*Source : SIAM

Key Players
Maruti Suzuki is the market leader because of its dominance in the small car segment While Tata Motors and Hyundai are key players in the small car segment , Mahindra & Mahindra has been a leader in the SUV segment Premium end car manufacturers have low market shares as they cater to Niche segment Growth rate of premium car segment stands at around 25%, much higher as compared to total market growth rate

Market Share Of Key Players

50%

47%

40%
30% 20% 10% 0%
Maruti Suzuki Hyundai Motors Tata Motors Mahindra & Mahindra

16%

15% 7%

12%

4%
General Motors India Others

*Source : SIAM

Growth Drivers

Growth Drivers
Increasing Consumer Demand
Growth in income levels Easier financing Better infrastructure

Government Policies

Overall economic growth Lower duties and Taxes

Industry Growth
New Product Launches
Contemporary Designs Reduced Life Cycle New Entrants

Cost Competitiveness
Reduced cost to the consumer Export competitiveness Availability of cheap labor

Key Purchase Triggers

Convenience
Rising individualism Peer pressure

Rise in disposable income

Competition

Competition
Segment - Hatchback

Ford Figo

Fiat Grande Punto

Volkswagen Polo

Maruti Swift

Maruti RITZ

Toyota Etios

Hyundai i20

Segment - Premium

Honda Civic

Toyota Corolla

Hyundai Sonata

Volkswagen Jetta

Chevrolet Cruze

Competition
Segment - SUV

Mitsubishi Pajero

Suzuki Grand Vitara

Mahindra Scorpio

Chevrolet Captiva

Mitsubishi Outlander

Ford Endeavor

Segment Super Premium

Volkswagen Passat

Nissan Teana

Toyota Camry

Honda Accord

Competition - Summary
Segment - Hatchback
Competition based on value cost trade off Fuel efficiency and product features a key product choice influencer Service and maintenance cost a key brand choice influencer

Segment - Premium
Competition level based on premium quotient of the product Brand image and luxury features a key purchase factor

Key Facts
Competition level based on product offering combined with value cost trade off Size , Product Features and Ride Handling are key purchase factors Competition level based on High Premium Factors and Luxury Quotient Comfort and Elegance a key purchase factor Brand equity a key influencer

Segment - SUV

Segment Super Premium

Consumers

Consumers - Classification

The First Time Buyers

The Upgraders

The Multiple Unit Buyer

The First Time Buyers

This segment of people buy a car for the first time. Consumer profile would resemble a newly married couple with a double income and single males or females with rise in disposable income. Value for money and fuel efficiency is a major purchase factor in this segment

Age group 25 to 30
Rise in disposable income a key trigger of purchase Consumer MHI varies from 40K to 70K Peer Pressure

The Upgraders
This segment of people generally sell of their old car and upgrade to a new one. Consumer profile would resemble to a nuclear household with kids with rise in income. Upgrade could take place within the same segment or cross segment as well.

Consumer MHI may vary from 70K to 1.5 Lacs

Age Group 30 45 Need to get closer to premium section Peer pressure

Multiple Unit Buyers

This segment of people generally buy in addition to their existing range of cars Consumer profile generally includes the upper class segment of society , Both joint and high income nuclear families Consumer MHI generally above 3 Lacs

Key triggers are need for an extra vehicle, luxury travel and social image
Age group 35 to 45 Major factors driving choice are product features and image of the brand.

Task

Identify a relevant consumer connect for Skoda

Consumer Segmentation

Consumer Segment
Seeker and Striver Striver and Near Rich Clear Rich

Consumer Type
The First Time Buyer The Upgraders The Multiple Unit Buyers

Annual Income
5 lacs to 10 lacs 10 lacs to 20 lacs Above 20 lacs

Car segment
Hatchback Premium and SUV Super Premium and SUV

Consumer Segmentation
100% 80% 60% 40%

20%
0% Metro Deprived Seeker Tier 1 Striver Near Rich Tier 2 Clear Rich

Clear decline in the population of the deprived and poor and rise in population of all other segments

The population rise of the striver is the fastest among all growing segments.
Growth of the Indian economy a major factor for rise in seeker and striver population Our aim is to create a strategy that revolves around these segments

Focus Strategy
Consumer Segment

Consumer

Product

Area

Primary Focus
Fabia Fabia

Secondary Focus
Laura and Yeti Yeti

Striver and Near Rich

Upgraders

Fabia Laura Yeti Superb Laura Yeti

Metro Tier 1

Clear Rich

Multiple Buyer

Metro

Superb

Yeti and Laura

Metro Seeker and Striver First Time Buyers Fabia Tier 1 Tier 2 Metro Cities Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad Tier 1 Cities All state capitals. Tier 2 Cities All other Cities

Fabia Fabia Fabia

Consumer Reach Plan - Media

Consumer Segment

Consumer Type

Focus

Medium

Seeker and Striver

The First Time Buyer

Reach Building, Impact and Engagement

ATL , BTL and Digital Focus

Striver and Near Rich

The Upgraders

Reach Building, Impact and Engagement

ATL,BTL and Digital Focus

Clear Rich

The Multiple Unit Buyers

Reach ,Impact and Engagement

BTL and Digital Focus

Just a part of the full presentation Rest is Confidential