Automobile Industry in India

Market Segmentation Analysis

The automobile industry is the fastest growing sector in India. Growth in consumption patterns has encouraged tremendous improvement in manufacturing sector and the auto industry has been growing at a rapid pace recording "over 2.06 million four-wheelers (passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps), and over 9 million two-and-three wheelers (scooters, motorcycles, mopeds, and three wheelers) - in 2006-07." (SBH India, 2008)

But since there is no special segmentation technique, we can only segment the market on the basis of size and price of automobiles. There are yet to emerge more sophisticated techniques involving psychographics and other behavioral parameters. Following are some of the available segments in the automobile sector:

Utility cars and other off-road vehicles: examples: Maruti Gypsy, Mahindra Armada, Tata Sumo. Tata Nano

Economy segment is one where cars are priced at less than $13,000 and examples include Ambassador, Premier Padmini, Maruti 800.

3. Luxury segment is small and comprises vehicles with prices from $13,000 to $30,000 and examples include Maruti Zen, Premier 118NE, Contessa, Maruti Esteem, Tata Sierra,

4. Super-luxury segment, (not many locally manufactured cars found) high in price. Higher than $30,000. Mostly foreign brands like Mercedes-Benz, BMW, Audi.

There is also a wide gap between regions within between. We can segment the market into four main regions, i.e. North, South, East and West. North has the largest share in the auto purchase with 43% market share, west has 27%, south 22% while east is the lowest with 8% share.

India consumers are still economy driven and highly price conscious. For this reason, the largest car segment comprises the compact and mini passenger cars which accounts for 81.8% of total sales of cars. The table below was taken from GAIL research on the subject and it shows the various segments in the automobile industry in India.

The following table comes from GAIL INDIA RESEARCH

Segment-Wise Division of the Indian Car Market

Mini

Compact

Mid-Size

Executive

Premium

Luxury

Vehicle Length

4001-4500

4501-4700

4701-5000

>5001

Maruti Udyog Ltd.

800 Omni

Alto Zen Wagon R

Esteem Baleno Altura

Hyundai Motor India Ltd.

Santro

Accent

Sonata

Hindustan Motors Ltd.

Ambassador Contessa Mitsubishi Lancer

Contessa

Fiat India Automobile Ltd.

Palio

Siena Adventure

General Motors India Ltd.

Opel Corsa Sail

Opel Corsa

Chevrolet Optra

Opel Vectra

Honda Siel India Ltd.

City

Accord

Ford India Ltd.

Ikon

Mondeo

Tata Motors

Indica

Indigo

Mondeo

DaimlerChrysler India Ltd.

Mercedes-Benz C. Class

Mercedes Benz E. Class

Mercedes

-Benz S. class

Skoda

Octavia

Toyota Kirlosker

Corolla

Camry

SOURCE:GAILINDIA LIMITED http://www.gailonline.com/gailnewsite/mediacenter/reportsautoindustry.html

Indian automobile Industry has grown significantly since the turn of the last century. It stands at a comfortable and enviable position in the world market and has been number 2 in two-wheelers and number 4 in commercial vehicles. With the industry growing at 18% per year and producing 2 million units annually, the Indian automobile segments especially the two wheeler and economy car segment is all set for frantic growth.