Customer Perception towards Small Segment Cars

The automobile industry today is the most lucrative industry. Due to the increase in disposable income in both rural
and urban sector and easy finance being provided by all the financial institutes, the passenger car sales have
increased at the rate of 38% per annum in January 2009-10 over the corresponding period in the previous year.
This report attempts to answer some of the questions regarding brand personality of selected cars in India by
conducting the market research. This report is categorized into parts, deals with introduction to cars related with
feature and prices to know the consumers perception regarding the small segment cars i.e. A and B and C.
The automobile industry today is the most lucrative industry. Due to the increase in disposable income in both rural
and urban sector and easy finance being provided by all the financial institutes, the passenger car sales have
increased at the rate of 25% per annum in January 2009-10 over the corresponding period in the previous year.
Further competition is heating up in the sector with a host of new players coming in and others like Maruti Suzuki,
Tata Motors, Huyandi etc. all set to venture in Indian markets. One factor that could help the companies in the
marketing of their products is buying Behavior of the consumers. The Buying Behavior of the customers can be
studied by knowing their perceptions about the cars in the market and about the possible entrants in the market.
One such technique is by knowing and creating a personality for the the cars manufactures.
This perception sketching will help in knowing what a customer (or a potential customer) thinks about a given
brand of car and what are the possible factors guiding a possible purchase. Similarly, the idea of measuring the
customer satisfaction will serve the same purpose of determining the customer perception. Thus, by measuring
the willingness of existing users of a car to recommend it to others will help the car manufacturers to chalk
out the entire Customer Buying Behavior.
The reports shall attempt to answer some of the questions regarding brand personality of selected cars in India by
conducting a market research. The market research will be helpful for the new car entrant companies in India to
find out the possible gaps between the customer expectations and the present market offerings. This way these
companies will be able to find their share in the ever-expanding Indian market pie.
The research will track the customer satisfaction in this given layers:
v Product related Parameters
v Dealer related parameter
It will be mainly a primary research and the information will be gathered from both primary and secondary
research. The study will analyze the applicability of existing research concepts, theories, and tools for evaluating
consumer satisfaction.

S. No.

Particulars

Pg. No.

1.

Executive Summary

2.

1.1 History of Automobile and Indian Automobile

3.

1.2 Overview of Auto segment

12

4.
5.
6.

1.3Emerging trends of Auto market

1.4Overview of small segment cars
1.5Consumer Buying Behavior and Perception

7.

1.6 Companys profile

17
22
24
28

8.

2.Literature Review

37

9.

3.Objective and Research Methodology

42

10.

4.Data Interpretation and Cross Tabulation

46

11.

5.Conclusion and Recommendation

67

12.

6.Reference

71

13

Annexure

74

CHAPTER-1
INTRODUCTION

The History of the Automobile

The history of the automobile begins as early as 1769, with the creation of steam-powered automobiles capable of
human transport In 1806, the first cars powered by internal combustion engines running on fuel gas appeared,
which led to the introduction in 1885 of the ubiquitous modern gasoline- or petrol-fueled internal combustion
engine. Cars powered by electricity briefly appeared at the turn of the 20th century but largely disappeared from
commonality until the turn of the 21st century, when interest in low- and zero-emissions transportation was
reignited. As such, the early history of the automobile can be divided into a number of eras based on the prevalent
method of automotive propulsion during that time. Later periods were defined by trends in exterior styling and size
and utility preferences.

Indian Automobile History

The origin of automobile is not certain. In this section of automobile history, we will only discuss about the phases
of automobile in the development and modernization process since the first car was shipped to India. We will start
automotive history from this point of time.
The automobile industry has changed the way people live and work. The earliest of modern cars was manufactured
in the year 1895. Shortly the first appearance of the car followed in India. As the century truned, three cars were
imported in Mumbai (India). Within decade there were total of 1025 cars in the city.
The dawn of automobile actually goes back to 4000 years when the first wheel was used for transportation in India.
In the beginning of 15th century Portuguese arrived in China and the interaction of the two cultures led to a variety
of new technologies, including the creation of a wheel that turned under its own power. By 1600s small steampowered engine models was developed, but it took another century before a full-sized engine-powered vehicle was
created.
The actual horseless carriage was introduced in the year 1893 by brothers Charles and Frank Duryea. It was the
first internal-combustion motor car of America, and it was followed by Henry Ford's first experimental car that
same year.
One of the highest-rated early luxury automobiles was the 1909 Rolls-Royce Silver Ghost that featured a quiet 6cylinder engine, leather interior, folding windscreens and hood, and an aluminum body. It was usually driven by
chauffeurs and emphasis was on comfort and style rather than speed.During the 1920s, the cars exhibited design
refinements such as balloon tires, pressed-steel wheels, and four-wheel brakes. Graham Paige DC Phaeton of 1929
featured an 8-cylinder engine and an aluminum body.
The 1937 Pontiac De Luxe sedan had roomy interior and rear-hinged back door that suited more to the needs of
families. In 1930s, vehicles were less boxy and more streamlined than their predecessors. The 1940s saw features
like automatic transmission, sealed-beam headlights, and tubeless tires.
The year 1957 brought powerful high-performance cars such as Mercedes-Benz 300SL. It was built on compact
and stylized lines, and was capable of 230 kmh (144 mph). This was the Indian automobile history, and today
modern cars are generally light, aerodynamically shaped, and compact.

OVERVIEW OF THE AUTO SEGMENT

The automobile industry in India is the ninth largest in the world with an annual production of over 2.3 million
units in 2008.In 2009; India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea
and Thailand.
Following economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained
growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers
such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international
operations. India's robust economic growth led to the further expansion of its domestic automobile market which
attracted significant India-specific investment by multinational automobile manufacturers In February 2009,
monthly sales of passenger cars in India exceeded 100,000 units. Ebryonic automotive industry emerged in India in
the 1940s. Following the independence, in 1947, the Government of India and the private sector launched efforts to
create an automotive component manufacturing industry to supply to the automobile industry. However, the growth
was relatively slow in the 1950s and 1960s due to nationalization and the license raj which hampered the Indian
private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors,
commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian
market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures
with Indian companies.
In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles and light
commercial-vehicles. It was at this time that the Indian government chose Suzuki for its joint-venture to
manufacture small cars. Following the economic liberalisation in 1991 and the gradual weakening of the license
raj, a number of Indian and multi-national car companies launched operations. Since then, automotive component
and automobile manufacturing growth has accelerated to meet domestic and export demands.
The reason behind the immense growth of the India Car Industry can be attributed to the availability of car loans,
affordable rates of interest, smooth repayment facilities and the deductions offered to the customers by the retailers.
The constant changes in the existing car models with regard to design, innovation, technology, and colors, have led
to a fiercely competitive market. Now that technology and innovation are not alien concepts for Indian car makers,
Indian cars are becoming increasingly sleek, stylish, and luxurious.
The Indian automobile industry has attained a substantial growth and has become one of the largest manufacturing
sectors in India over the past two decades. In the export market the industry has earned a strong reputation and
Indian vehicles as well as components are in great demand the world over.
India has entered the big league of Asian car market. In the past few years, the production and management
systems in the Indian automobile industry have been revolutionized. One of the dramatic changes in the industry
has been the opening and growing up of several emerging markets. India is one of the most important emerging car
economies in the world today. In 1991, the Government of India initiated an ambitious structural adjustment
programme aimed at economic liberalization based on Delicensing, Decontrol, Deregulation and Devaluation.
This new automobile policy attracted a large number of automobile companies to India. The foreign investors
perception has changed and, therefore, a large number of multinational auto companies, especially from Japan,
USA, and Europe, are entering the Indian auto market and working in collaboration with the Indian firms. Also, the
availability of automobile finance has further paved the way for a long-term growth of the industry.
Many joint venture agreements have been made in the Indian automobile and auto-components sector with leading
global manufacturers. The Government of India is keen on providing a suitable economic and business
environment conducive to the success of the established and prospective foreign partnership ventures.

The Indian automobile industry has a mix of large domestic private players such as Tata, Mahindra, Ashok
Leyland, Bajaj, Hero Honda and major international players including GM, Ford, DaimlerChrysler, Toyota, Suzuki,
Honda, Hyundai and Volvo. Today, the Indian automobile industry is the worlds largest motorcycle
manufacturer, the second-largest two-wheeler and tractor manufacturer, the fifth-largest commercial vehicle
manufacturer and the fourth-largest car maker in Asia.
Indians have emerged as avid car enthusiasts sporting their prized possessions as status symbols and speed
machines. Foreign car companies have discovered the Indian consumer as well as the R & D potential in the Indian
technical fraternity and are setting up manufacturing plants right and left across the country at lower costs. The
Indian automobile industry is currently experiencing an unprecedented boom in demand for all types of vehicles.
This boom has been triggered primarily by two factors:
(1) Increase in disposable incomes and standards of living of middle class Indian families estimated to be as many
as four million in number; and
(2) The Indian government's liberalization measures such as relaxation of the foreign exchange and equity
regulations, reduction of tariffs on imports, and banking liberalization that has fueled financing-driven purchases.
Industry observers predict that passenger vehicle sales will triple in five years to about one million, and as the
market grows and customer's purchasing abilities rise, there will be greater demand for higher-end models which
currently constitute only a tiny fraction of the market. These trends have encouraged many multinational
automakers from Japan, U. S. A., and Europe to enter the Indian market mainly through joint ventures with Indian
firms.
India is increasingly becoming a global automotive hub both for the vehicles and component industry. India is fast
integrating itself into the world economy and open to international automotive companies, who are increasingly
investing in India.
The Indian automotive and component industry is looking to increase the quality of production from existing
levels, to develop new products and to increase exports. In the long run India is well set to become a key market for
automotive and component manufacturers in terms of local demand and as a base for exports.
Automobile Industry in India is still in its infancy but growing rapidly. The opportunities in the automobile
industry in India are attracting big names with the big purse and they are investing vigorously in infrastructure,
design and development, and marketing. Automobile industry in India is today poised for the big leap.

India is the 2nd largest two wheeler manufacturer in the world

Second largest tractor manufacturer in the world

5th largest commercial manufacturer in the world

3rd largest car market in Asia, surpassing China in the process

Automobile industry Contributes 17% of the total indirect taxes collected by the exchequer & is a driver of product
and process technologies, and has become a excellent manufacturing base for global players, because of its:

high machine tool capabilities

Extremely capable component industry

Most of the raw material locally produced

Low cost manufacturing base

Highly skilled manpower

Special capability in supplying large volumes

Indian automobile manufacturer

v Hindustan Motors: Ambassdor
v Maruti Suzuki: 800, Alto, Wagon R, Estilo, A Star, Ritz, Swift, Omni, Versa, Gypsy
v Premier: Sigma, Roadster, RiO.
v San Motors: Storm
v Tata Motors: Nano, Indica,

Multi-national automobile manufacturers

Locally manufactured Automobiles of Multi-national Companies:

Chevrolet : Spark, Beat, Aveo U-VA, Aveo

Fiat : Palio, Grande Punto
Ford : Ikon, Figo
Hond : Jazz
Hyundai : Santro, i10, Getz, i20

Emerging Trend of India Auto market

India auto market is a promising industrial sector that is growing immensely every passing year. Passenger cars are
referred to, through use of word "automobile." Whooping growth experienced by Indian auto market in last
financial year itself that is financial year end in February, 2010 was very close to a 24 percent over previous fiscal.
This statistical fact is a glittering example of potential of growing auto industry in India.
As per survey conducted by Society of Indian Auto Manufacturers, total number of automobiles manufactured by
auto industry in India, throughout financial year 2008-09, was very close to 15.5 lakh (1.5 million) margin. Huge
of number of automobiles manufactured by auto industry in India was an enormous growth upon number of autos
manufactured during previous fiscal, that ended in 2009.
Total number of cars that were exported from India were very close to 2.0 lakh (2.0 hundred thousand) margin, an
encouraging sign for auto industry in India. Export of cars manufactured in India comprised nearly 13 percent of
total number of cars manufactured domestically by auto industry in India.
India auto market looks set to prosper, largely due to growing market for automobiles that is developing in India. In
financial year that ended in February, 2007, Indian auto markets were fastest growing in world, with registered
growth
rate
touching
nearly
20
percent.
Auto industry in India mainly comprises of small car section, which enjoys nearly a 2/3rd market share of entire
market for autos in India. In this respect, Indian markets are largest in world for small cars, behind Japan.
Indian passenger car market which ranks amongst largest in world, is poised to become even more larger and enter
top five passenger car markets in world in next decade

Industry background
Driving the most luxurious car has been made possible by the stiff competition in the automobile industry in India,
with overseas players gathering the same momentum as the domestic participants. Every other day, we have been
hearing about some new launches, some low cost cars all customized in a manner such that the common man is
not left behind. In 2009, the automobile industry is expected to see a growth rate of around 9%, with the disclaimer
that the auto industry in India has been hit badly by the ongoing global financial crisis.
The automobile industry in India happens to be the ninth largest in the world. Following Japan, South Korea and

Thailand, in 2009, India emerged as the fourth largest exporter of automobiles. Several Indian automobile
manufacturers have spread their operations globally as well, asking for more investments in the Indian automobile
sector by the MNCs.

Potential of the Automobile industry

In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000
vehicles manufactured in its India plant by 2011. Similar plans are for General Motors.
Turnover of Automobile Manufacturers(In USD Million)

Year
2002-03
2003-04
2004-05
2005-06
2006-07
2007-2008
2008-2009

In USD Million
14,880
16,544
20,896
27,011
34,285
40,345
45,867
Source: SIAM India

The figures show that the automobile sector in India has been growing robustly. The market shares of the different
types of vehicles will clearly depict the demand pattern in this sector.
Domestic Market Share for 2008-09

Passenger Vehicles
Commercial Vehicles
Three Wheelers
Two Wheelers

15.96%
3.95%
3.6%
76.49%
Source: SIAM India

Industry Size

The domestic Indian passenger car market (including utility vehicles) totaled 900,000 units (with a CAGR of 10 pe
cent over the past 4 years) while the exports were 130,000 million units (with a registered CAGR of 68 per cent ove
the past 4 years) during financial year 2009.
The Indian two-wheeler Industry is one of the largest in the world, and is expected to maintain robust growth in th
future
At the back of this phenomenal automotive growth is the success of the Indian auto component industry. Presently
US$ 6.7 billion industry, it is expected to almost treble in less than eight years time to US$ 17 billion by 2012.
India offers a distinct technological and cost-competitive advantage, which global Original Equipment Manufacturer
(OEMs) and automotive suppliers are leveraging for both manufacturing and research facilities. The passenger ca
market is projected to grow at a CAGR of 12.3 per cent over the next few years. Growth in the mid-size and premium
car segments is expected to outpace the overall market growth.

MARKET SHARE

Domestic Market Share for 2009-10

Passenger Vehicles

15.86

Commercial
Vehicles

4.32

Three Wheelers

3.58

Two Wheelers

76.23
Source: Market Research by SIAM India
Source: Market Research by SIAM India

Domestic and Foreign Vehicle Manufacturers:

Automobile Manufacturers Market Share
LCV
0.083 Mn

Passenger Cars
0.604 Mn

Source: Market Research by SIAM India

Overview of Small Segment Cars

The small car market in India is increasing by leaps and bounds. The indigenous market for small cars now
occupies a substantial share of around 70% of the annual car production in India of about one million. The main
players in the car market like Tata Motors and Maruti Udyog are fiercely competitive and more or less all the
automobile companies in India that have forayed into the production of small cars are trying to out-do each other in
terms of design, innovation, pricing, and technology, in order to gain control of the small car market in India.
The biggest players in the Indian small car market are engaging in a healthy competition, which has intensified
since the Indian government decided to boost the small car sector. In this regard, a reduction in the excise duties
has been thought of. Even the engine capacities are expected to be raised to 1500cc. The new small cars in India
cars may even be fueled by gasoline and diesel in the future. With all these facilities, it has been estimated that the
indigenous car market is going to move beyond the 3.5 million mark very soon.
Suzuki, which is now heading the Indian small car market has plans to invest an additional US$ 650 million for

research and development work in its Manesar Plant. This Plant will also be used for manufacturing diesel cars.
Suzuki has decided to enter into a joint-venture with Nissan to launch a new mini car model in India.
Even Hyundai Motors is on a similar investment spree for research work with a venture of US$ 700 million in
India. The two cars from the Hyundai stable - Santro and Getz are already in the market and have been doing
exceptionally well in the past few years. It is expected that more and more foreign companies are likely to join the
healthy
race
in
the
Indian
small
car
market.
One of the biggest players in China's car market, Volkswagen, has decided to invest in the Indian small car market.
It is supposed to invest a total amount of US$ 540 million and manufacture nearly 100,000 mini cars on an annual
basis.

Factors driving the demand for small cars in India:

The increase in the demand for small cars can be attributed to the aspirational lifestyle of people which makes them
strive for a car early on in life. The overall age for owning a car has also decreased in recent years. Further, with
the growing affluence of the rural sector, owning a car, at least a small car, is a foregone conclusion in modern
India. However, since small cars are more affordable and utilitarian, the demand for them has shot through the roof.
This rising demand for small cars is attracting companies like General Motors which has increased its yearly
production in India to 140,000 vehicles. The Maruti 800 which is the most preferred car among the Indian middle
classes can now be bought at a lower cost. Tata Motors has been launch a mini-car in 2008, which will cost as less
as US$ 2,200. Tata Motors is also going through a process of decision-making, to launch a variety of mini-cars in
association with Fiat. Honda has also decided to increase its manufacturing capacity in India to 100,000 very soon.
Therefore, the leaders in the market for small cars in India can be seen to engage in a price war to make more cars
available to the majority of Indian citizens.
The small car market in India is witnessing the maximum activity and is all set for more exciting times ahead, with
more players from India and abroad joining the race.

Consumer Buying Behavior and Perception

The Indian consumers are noted for the high degree of value orientation. Such orientation to value has labeled
Indians as one of the most discerning consumers in the world. Even, luxury brands have to design a unique pricing
strategy in order to get a foothold in the Indian market.
Indian consumers have a high degree of family orientation. This orientation in fact, extends to the extended family
and friends as well. Brands with identities that support family values tend to be popular and accepted easily in the
Indian market.
Indian consumers are also associated with values of nurturing, care and affection. These values are far more
dominant that values of ambition and achievement. Product which communicate feelings and emotions gel with the
Indian consumers.
Customer satisfaction index: some of the most advance thinking in the business world recognizes that customer
relationships are best treated as assets, and that methodical analysis of these relationships can provide a road map
for improving them.
Clause 8.2.1 in ISO9000: 2000 states: As one of the measurements of the performance of the quality
management system, the organizations shall monitor information relating to customer perception as to whether the
organization has met customer requirements. The method for obtaining and using this information shall be
determined
The requirement has been there in the QS9000 standard clause 4.1.6 which says:
Trends in customer satisfaction and key indicators of customer dissatisfaction shall be documented and

v
v
v
v
v
v

supported by objective information. These trends shall be compared to those of competitors, or appropriate
benchmarks, and reviewed by senior management.
There is obviously a strong link between customer satisfaction and customer retention. Customers perception
of service and quality of product will determine the success of the product or service in the market.
With better understanding of customers perceptions, companies can determine the actions required to meet the
customers needs. They can identify their own strengths and weaknesses, where they stand in comparison to
their competitors, chart out the path future progress and improvement. Customer satisfaction measurement helps to
promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes
used within the company.
Customer expectations are the customer-defined attributes of your product or service. We cannot create satisfaction
just by meeting customers requirements fully because these have to be met in any case. However falling short
is certain to create dissatisfaction.
Major attributes of customer satisfaction can be summarized as:
Product quality
Product packaging
Keeping delivery commitments
Price
Responsiveness and ability to resolve complaints and reject reports
Overall communication, accessibility and attitudes

The buying process involves the following steps:

The fact that word of mouth sales are a big deal in this industry has also helped. Industry players and market
surveys reveal that 20-30 percent of sales are through word of mouth.

For the purpose of the project has undergone through:

v Surveying the relevant consumer base through exhaustive questionnaire.
v Understand the elements underplaying in each segment
v Deducing A analytical overview through different statistical method

COMPANYS PROFILE
Maruti Udyog Limited
Maruti Udyog Limited is the premier car company in India. Maruti Udyog Limited (MUL) was established in Feb
1981. The company entered into collaboration with Suzuki Motor Corporation of Japan to manufacture cars.
Maruti is the highest volume car manufacturer in Asia, outside Japan and Korea. Maruti Udyog Limited, the largest
Car selling company in India, has many unique Service advantages for the customers. It has bagged the First
Position in JD Power Customer Satisfaction Index for the consecutive two years. The company has also ranked
highest in the India Sales Satisfaction Study.

Estilo
Maruti launched all new Estilo. If you are wondering why I dropped Zen from this car's name then let me explain.
Estilo has got Wagon R's engine and chassis and Suzuki MR Wagon's shape. Whatever remains is taken from Zen,
well does anything remains actually? Yes, Name! Name is taken from Zen, 'Zen Estilo'. In essence its stylish
Wagon R, Japan's MR Wagon, combination of the two or anything but Zen. It seems Maruti wants to exploit Zen
brand-image hence named this car after Zen.
Zen Estilo has the same engine (1061cc, 64.8ps, 84Nm, 4-cylinder, 16-valve, MPFI F10D Petrol) under the hood
that is found in Maruti Wagon R. Absolutely nothing has been changed except for the fact that this engine is much
refined and is slightly better at responsiveness and fuel economy. This simply translate into 'Zen Estilo is a bit
faster and more fuel economic than Wagon R'. Due to highly good drivability, driving in city would be more fun
with Zen Estilo. Electronic Power Steering (not available in LX version) really helps in crowded traffic. Owning
and maintaining Zen Estilo won't be a problem, engine is proven reliable and virtually maintenance-proof.

Wagon R Duo
At first glance the Maruti WagonR Duo looks quite normal. Well, that is if you think the WagonR's boxy looks are

normal to start to start with. Frankly, for a car that has to get around a city, I really don't care, because the Duo is all
about LPG, and the fact that it is first factory fitted LPG car in India. Factory-fitted means one major plus, your
warranties don't get voided because of the gas fitment.
There is no denying the cars cost advantage, this is the cheapest Maruti vehicle to run, and that in itself is a massive
statement. The redesign of the car hasn't just meant a fresh exterior look; it has also meant new interior - rotary
controls on the panel and a very neat looking display with an all new speedo.
The problem is that despite the not insignificant cost savings, you save a rupee a kilometer on LPG over Petrol,
which even makes the extra Rs 24000 you have to pay for the car seem worth it, the Duo just wheezes at times.
And this is despite two important facts, first LPG has more energy than CNG (that other gas) and because this is a
company designed car, Maruti engineers have really played around with the engines tuning.

Swift
Competing with the other cars of Maruti, Maruti Swift is gradually making its position in the world of mid-sized
family car. Maruti Swift has come up with the special technical specifications of 16 valve 4-cylinder, 1300 cc
engine generating power. Maruti swift is equipped with various safety features and well advanced equipments. 3
assist grips, 3 spoke urethane steering wheel, antenna, cabin light (3 position), console box (lower), cup holders
(front 2, rear1), front door trim pockets, green tinted glass window, halogen headlamps, headlamp leveling device,
heater and manual Air conditioning, OVRM (internally adjusted), rear fog lamps, wind screen wiper 2 speed plus 1
speed intermittent, tailgate opener key type, trip meter (digital display), sun visors (both sides), brake assist , child
lock (rear door), high mounted stop lamp, power steering, rear seat belts etc. are the features available in this
model. Apart from the features found in other model, striking features of this model are black colored A & B
pillars, 12v accessory socket in center console, day and night rear view mirror, door ajar warming lamp, driver's
seatbelt warning lamp, tachometer, driver's seat belt warning lamp, vanity mirrors (sun visor co-driver side), rear
seat head restraints, fabric accented door trims, central door locking (4 door), front and rear view.

Hyundai Motor
Hyundai Motor India Limited (HMIL) was established in 1996 and is a wholly owned subsidiary of South Korean
multinational, Hyundai Motor Company. HMIL is the fastest growing and the second largest car manufacturer in
India and presently selling 30 variants of passenger cars in six segments. The Company has set up more than 70
dealer workshops that are equipped with the latest technology, machinery, and international quality press, body and
paint shops, across the country, thereby providing a one-stop shop for a Hyundai customer. Hyundai also has a fleet

of 78 emergency road service cars that can provide emergency service to all its customers anytime, anywhere.

Hyundai Santro
In the field of mid size car, Santro Xing is capturing the market very rapidly. Its design, style, space and other
special features has made it one of the highest purchasable cars among any economy class.
It has five variants:

Santro XK

Santro XK (Non AC)

Santro XL

Santro XO

Santro AT
Along with the other features that are present in Santro XK (Non AC), other features present in this model are air
conditioner, day and night inside rear view mirror, chrome1 radiator grille etc. Along with the features available in
Santro XK, added features in this model are 4 doors CLS, passenger side OVRM, tinted glass, map pocket front
door driver side, front door full size arm rest, door trim with fabric insert, hydraulic power steering, power
windows (front) etc.

Getz
Hyundai Motors launched small family car Getz at August 2004. Euro III emission norms fulfilled Car, Getz
powered by 1300 cc. engine. Only the petrol version of this car was launched initially.
There are four variants found in this car:

Hyundai Getz GLS

Hyundai Getz GLX

Hyundai Getz GVS

This model has highly advanced features like AC with 4 speed blower, ash tray w/o illumination, center console w/
pen and jug holder, 60:40 rear seat split, vanity mirror passenger side, rear defogger, height adjustable seat belts
(front), waist line molding, tilt steering, map pockets, front and rear power windows, rear seat back inclination(4
position), digital clock, rear wiper and washer, front for lamp, body color radiator grille, rear bumper reflectors,
rear mud guard etc. Few features to view comfort and safety in mind, this model is being specially equipped with
rear wiper and washer, rear defogger, alloy wheels etc. This model has few important features like height adjustable
front seat belts, body colored radiator grille, rear bumper reflectors etc.
.

Tata Motors Limited

Tata Motors Limited is India's largest automobile company, with revenues of Rs. 24,000 crores in 2007-08. Its
name comes first in the category of commercial vehicles and the second largest in the passenger vehicles, mid size
car and utility vehicle segments. The company is the world's fifth largest medium and heavy commercial vehicle
manufacturer. Over 3.5 million Tata vehicles is moving on Indian roads, since 1954. Its manufacturing plant is
located at Jamshedpur, Pune and Lucknow.

Tata Indica V2
Having attributes of three popular cars, Tata Indica is ruling the market. Making of Tata Indica with the concept of
main distinguishing features of three popular cars i.e., with the overall structure of Maruti Zen, interior space like

ambassador and cost nearly like Maruti 800 was a challenging venture of Tata Motors. Its fully foldable rear seat
has made this car more accommodating for extra luggage. For safe and secure driving and to give proper comfort,
side-impact beams, rigid monochrome frame and child safety locks are attached to this car.
Different Tata Indica models are:
Tata Indica V2
o DLX
o DLG
o DLS
o DLE
Tata Nano
With its market catching looks and few striking features have set a trend for the choosy buyers. Its power steering,
central locking system, four power windows have not only made this comfort driving car but also give assurance
for the safety. To mention more about convenience of driving, HVAC system provides good cooling effect even in
a sultry summer days. Door handles, body colored bumpers, ORVM and wheel arch flair are few more advantages
that the owner of this car can easily avail. To assure safer driving along with the elegance and appeal of the car, this
model is equipped with body colored bumpers, the wheel arch flairs, internally adjustable OVRM and central
locking system. To avoid any inconvenience in operating the window, front windows are power windows. To avoid
the scorching heat in a summer days, HVAC system of cooling can soothe anybody inside the car

Chevrolet
Its king like entry happened in India in 1928 with its National Series AB touring. Reliability of this car was proved
by its 171 cubic inches, 24.7hp four cylinder engines. General Motors, parent company of Chevrolet, was the first
in setting up assembly plant in India. First office of Chevrolet was located at Mumbai and its assembly plant was in
Sewree.

Chevrolet Aveo
With the assurance of safety and technologically advanced equipments, Chevrolet Aveo provides complete
statement of reliability and efficiency. Safety features like tailor welded blanks, high- strength steel structure, Bpillar, height adjustable safety belt anchors, rear child safety door locks, front safety belt pretension etc really
confirm the security of the passenger.
It has four variants:
Aveo 1.4 E*

Aveo 1.4

Aveo 1.4 LS

Aveo 1.6 LT
It is well equipped with 1.4L DOHC 94 PS, 5 Speed MT, chrome radiator grille, wide 185/60 R14 tyres, pullout
type door handle, two tone beige interiors, power steering and power window, central locking, rear defogger
with timer, remote trunk lid opener, engine service soon indicator etc. It is well equipped with 1.4L DOHC 94
PS, 5 Speed MT, chrome radiator grille, wide 185/60 R14 tyres, pullout type door handle, two tone beige
interiors, power steering and power window, central locking, rear defogger with timer, remote trunk lid opener,
engine service soon indicator etc. Its main mentionable features along with the other features which are
associated with the rest of the models, are 1.6L DOHC 102 PS, 5 speed MT; double DIN MP3 system with 6
speakers; rear spoiler with CHMSL; chrome coated exterior handles and trunk lid garnish; 14" alloy wheels;
electrically adjustable OVRM; wood finish on IP and door trim; car alarm and key less entry system.

CHAPTER-2
Literature Review

Literature Review
Verma and Kaur (2006) Davos India in its research on automotive industry (January 2006, www.ibef.org)
identified a key trend in passenger vehicle segment that with rising income levels and availability of better
financing options, customers are increasingly aspiring for higher-end models. There has been a gradual shift from
entry-level models to higher-end models in each segment. Tata Nano is an entry-level car which has reduced the
cost of owning a car significantly as mentioned above. Many aspirants have actually converted into the consumer
class.
An increase in the number of working women and the prevalence of nuclear double-income families, especially in
urban areas, are other trends shaping lifestyles. These changes are driving an increased need for personal transport,
especially in segments like working women, young executives and teenagers. A large proportion of the Indian
population is relatively young - in the age group of 20-59 years. This is expected to further boost the automotive
domestic market as a younger population has a higher consumption index. To incorporate these trends it is
necessary to include age and gender as few of the factors affecting the sales of Nano.
Different states in India have different development on the basis of infrastructure etc. Further the income levels and
the spending patterns of people vary state by state.
Rao and Verma(2006) Investigated experimentally the influence of price, brand name and store name on
buyers perceptions of product quality. The Meta analysis suggests that for consumer products, relationships
between price and perceived quality and between brand name and perceived quality are positive and statistically
significant. However the positive effect of store name on perceived quality is small and not statistically significant.
Punj (2007) Evaluated model of consumer information search behavior for new automobiles. The results
supported the hypothesis that there are at least two unique components of prior knowledge: specific product
knowledge and general product class knowledge. The former caused less external search while later caused more
external search. External search was found to be negatively related to cost of search while positively related to cost
savings. Satisfaction was related to cost savings but not to external search.
JD (2007) emphasized the effect of prior brand perceptions on the search process. When consumers had brand
specific prior distribution s of utility, the existence of relative uncertainty among brands was necessary for search
to be useful. Thus, it was explained why product class involvement or low search costs may not be sufficient to
induce large amounts of search activity and why there may be an inverted U shaped relationship between search
behavior for new automobiles, using data collected contemporaneously with consumers actual decision process.
Ramakrishnan (2007) Reveals, in his study, Customer Retention: The Key to Business Performance , that
the marketing management has relied on permutations and combinations of the marketing mix elements (product,
price, place and promotion to achieve market dominance through enhanced market share by acquiring new
customers. Aggressive branding and promotions are the other tactics used by sellers adopting the traditional market

approach. But brands with highest market share are not always the most profitable
Shyamala Mathan Sankar (2008) Consumer Perception of Global vs. Local Brands
This chapter concludes the study by summarising the entire study and also by highlighting the key findings of the
study. The chapter then pursues to the limitations of the study and presents the recommendations for future
research. The aim of the study was to understand consumer perception of global brands vs. local brands in the
Indian car industry. The car industry in India was undertaken for the study due to the strong growth of the
automobile sector in India. The secondary objectives of the study highlighted the factors that affect consumer
preference for global brands; examined the effects of country of origin on consumer perceptions of global brands
and local brands; and studied the effects of consumer ethnocentrism towards global brands. The study initially
accomplished the secondary objectives in order to accomplish the primary objective. The literature review provided
a critical analysis of the views and insights of various researchers on the subject area and served as a source of
secondary data, which were collected through marketing journals and other existing reports that were based on the
topic. Furthermore, an overview of the Indian car industry was presented in the study in order to facilitate the
reader to comprehend the study in an enhanced way. Since the aim of the study was to understand consumers
view of global brands vs.local brands, qualitative research was preferred to quantitative research. In order tocreate
a deep understanding of consumers insights of global car brands against local.
Jakrapan et.al (2008) A Comparative Study between Thai and UK Customers Perceptions
Total worldwide sales of premium luxury and entry luxury saloons and sports cars are of the order of 1.5 million
units a year (Scheele, 1995: 190). The major luxury markets today are the USA, Germany, UK and Japan. The
21.1 billion UK new car market competes with France and Italy, to be the second biggest in Europe behind
Germany (Harbour, 1997: 7,22). The new registration of luxury marques cars in 1997 in UK alone was
154,506 units (MAVEL, 1997: 59). In other markets, especially in South East Asia there are, of course, significant
sales of luxury cars. However, these are limited to total volume either by the overall industry size or by local
market conditions and preferences. Accordingly, the luxury car market overall is currently undertaking a social
change with luxury brands seeming less remote, less different, and less exclusive with the quality of life improving.
As a result, increasing competition between makes has intensified the importance of brand identity. As product
standards continue to rise, the perceived image of a car make plays a key role in the buying decision. The premium
marques such as BMW, Lexus, and Mercedes-Benz must develop attributes and values that reflect changing social
values which influence buyers emotionally, in order to maintain their positions in different regions of the global
market.
Malhotra(2008) Proposed an alternative approach for measuring consumer preferences by using limited
information. The approach differed from the popular approaches in which once the non-preferred choice
alternatives were identified; no further information on them was obtained. The author reported an empirical
investigation and two Monte Carlo studies comparing the performances of the proposed approach with that of
metric conjoint analysis, which were a corresponding approach based on full information and an OLS approach
that used information on the preferred alternatives only.
Surinder Pal Singh(2008) Consumer Behavior and Needs Expression
Motivation and personality could be linked - a person with a high degree of confidence may be assertive. There are
a number of theories on personality. Freudian theory assumes that the behaviour of individuals would be based on
unconscious needs and drives. According to this theory, the human personality consists of three parts - id, ego and
super ego. The id is the component which consists of impulses and primitive instincts which urge the individual to
move towards immediate gratification. A number of product categories which may not have well defined functional
attributes and which are oriented towards sensual pleasure formulate communication which may appeal to the id
part of the personality.
Mohit Sewak ,( 2009) The Changing Consumer Perception
India is poised to become a major Auto hub in the near future. Indian car industry is changing rapidly, so is the
mindset of Indian Consumers. We, at the Great Lakes Institute of Management, took an initiative to find out that
whether the changing ground realities have also changed the India Auto Consumers mindset vis-a-vis their

perception of the abilities of various Indian and foreign Auto manufacture to deliver the much sought after
attributes in a car.
We deliberately, instead of taking individual cars, took BRANDS (as we wanted to analyse the brand perception
mapping), and let the consumer decide which brand will he buy (Note: It is important to note that in some cases,
though a consumer may covet a brand highly e.g. BMW, but might not intend buying it due to many reasons. So we
specifically framed question to analyse the purchase intention), and the attributes for which he will go for that
particular brand.
It was surprising to find the changing perception of the consumer towards TATA, especially after it being the proud
owner of Jaguar and LR on one hand, and the maker of the worlds smallest, and the most economical economical
(& affordable) car Nano on the other.
.

CHAPTER-3
RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

____________________________________
The research objectives for the project undertaken can be defined as follows:
v To know customer perception towards the small segment cars.
v To judge the satisfaction level of small segment cars owners of different company.
v To identify the factors which influence purchase decision of customer?

SCOPE OF THE STUDY

___________________________________________________________________
The Study aims at making contributions to the consumer behavior concerned with small cars. It will be beneficial
for both students and teachers of consumer behavior as it contemplates how the knowledge of consumer behavior
can be applied in research work.
The study will have great implications from marketers point of view as it will help them in strategy
formulation. The knowledge of media factors, considered important by the consumer, would be helpful to the
marketer for adopting more efficient marketing strategies.

Determining the brand preference can be helpful to both manufactures and dealers of motorcycles enabling them to
meet the requirements of the market more effectively and efficiently.

RESEARCH METHODOLOGY
_______________________________________________________________
In this chapter, the research methodology used in the conduct of the study has been discussed The aim of the study
is to explore the Customer Perception towards Small segment cars . The study tries to cover all the aspects
of small car purchase behavior and consumer preference. It stars from general introduction highlighting the
objectives limitations. It moves through a systematic methodology to gather arrange and analyze data
RESEARCH DESIGN
A scientifically carried out research project has a definite framework for data collection. This framework
constitutes the research design. The research design for the present study is descriptive as it matches well with the
objectives of the study.
UNIVERSE OF THE STUDY
The universe of the study includes the persons in jalandhar city who owned small cars.
SAMPLE AND SAMPLING DESIGN
Sample will be collected in single stage. In this project, non-probability convenience sample is used.
Technique of sampling
Simple random sampling technique has been used to select the sample. A simple random sample is a group of
subjects (a sample) chosen from a larger group (a population). Each subject from the population is chosen
randomly and entirely by chance, such that each subject has the same probability of being chosen at any stage
during the sampling process. This process and technique is known as Simple Random Sampling, and should not be
confused with Random Sampling.

Hypothesis:
v Alternative hypothesis: There is significant difference between customer perception preferences towards small
cars.
v Null hypothesis: There is no significant difference between customer perception preferences towards small
cars.
v Sample size
v The sample size is 300
DATA COLLECTION
For the purpose of study, both primary and secondary data were required. Primary data was collected from the
Small car owners using a questionnaire which was devised to be brief, simple and replies. At the same time it was
structured to cross check the respondents replies in order to get relevant information. The questions were
dichotomous, multiple choice or open ended type. It also consisted of likert type statements to know there attitude
towards various attributes. 5 points scale was used. For classification of attributes are Highly Satisfied (H.S),
Satisfied (S), Neutral (N), Dissatisfied (D), and Highly Dissatisfied (H.D). Secondary data was collected from
various journals /magazines, websites and dealers regarding the market performance of these bikes.
QUESTIONNAIRE DESIGNING AND ITS SUBSEQUENT TESTING.
For the purpose of collecting relevant research data, structured and non-disguised type questionnaire was used. A
pilot survey was conducted to determine the suitability of the questionnaire and modification were incorporated
before making the final survey
Techniques used for analyzing the collected data were:
1) Tabulation 2) Percentages 3) Pie Diagrams 4) Bar Graphs 5) Factor analysis

CHAPTER-4
DATA ANALYSIS AND INTERPRETATION

Q1 No of respondents are males and females?

Interpretation :- The majority of the respondents are males. Females are also craze of small cars because of their
convenience

Q2. Education of the respondants?

Graduation
Intermediate
Matric
Above Graduation

34.00%
26.00%
20%
20%

Interpretation :-The majority of the respondents educated and they like to buy because of fuel efficiency products
design as well as value for the money.

3. Monthly income?
We surveyed around 300 people who belonged to various monthly family income groups. The survey of 4 income
groups was done. The four income groups were:
Less than 50000
50000 - 1,00,000
1,00,001 2,00,000
More than 2,00,001

Interpretation:
Above graphs exhibits the income bracket of the sample size, as evident the majority of the sample is in the income
bracket of < 50,000 a month income. Though none of the bracket is highly skewed, this enables the study to be
wide and not dependent on a set income class, which was a fortunately desirable result of simple random sampling.
4. Do you own a car?
Interpretation:- majority of respondent are the owner of car.

Q5: Which version of car would you like to purchase?

Petrol

44.70%

Diesel

50.50%

Gas

4.70%

Other
0%
Interpretation:
Peoples are clearly looking for Diesel cars in future rather than petrol, few are also looking for Gas version.

Q6. Why did you bought your present car?

Interpretation:
As per the analysis shows, increase in disposable income seems to be the most important reason for buying a
car. This trend is reflected in the growth of the Per capita Disposable income and consequently the growth of
the Indian automobile industry especially in the A, B and C segment cars. Similarly, the growing family needs
like working partners, increasing family size, status, etc. add to the motives of buying a car.

Q7. Please rate your existing car in terms of understated Interior Design features on a scale of 1 to 5 where

Interpretation:
Interiors play a very important role in deciding the sale of a car. More plush, comfortable and exotic the interiors
are more are the chances of its being popular among the customers. For this reason manufacturers spend billions of
dollars every year on R&D to continu
________________________________________________________
Trial version converts only first 100000 characters. Evaluation only.
Converted by HTML to RTF .Net 5.4.12.15.
(Licensed version doesn't display this notice!)
- Get license for the HTML to RTF .Net