CHAPTER I

1.1 INTRODUCTION TO THE STUDY

INTRODUCTION

The title of the project “A STUDY ON CONSUMER BEHAVIOR WITH SPECIAL

REFERENCE TO SRI SARADHA AMBAL AUTOMOBILES PVT LTD., NAMAKKAL
”. All of us are customers. We also consume and buy these products according to our needs,
preference and buying power. These can be consumable goods, durable goods, specialty goods
or, industrial goods.

What we buy, how we buy, where and when we buy, in how much quantity we buy
depends on our perception, self concept, social and cultural background and our age and family
cycle, our attitudes beliefs values, motivation, personality, social class and many other factors
that are both internal to us. While buying, we also consider whether to buy or not to buy and,
from which source or seller to buy. In some societies there is a lot of affluence and, these
societies can afford to buy in greater quantities and at shorter intervals. In poor societies, the
consumer can barely meet his barest needs. The marketer therefore tries to understand the needs
of different consumers and having understood his different behaviors which require an in-depth
study of their internal and external environment, they formulate their plans for marketing.

Definition

Consumer behavior can be defined as the decision-making process and physical activity
involved in acquiring, evaluating, using and disposing of goods and services. This definition
clearly brings out that it is not just the buying of goods/services that receives attention in
consumer behavior but, the process starts in the minds of the consumer, which leads to the
finding of alternatives between products that can be acquired with their relative advantages and
disadvantages. This leads to internal and external research.

Then follows a process of decision-making for purchase and using the goods, and then
the post purchase behavior which is also very important, because it gives a clue to the marketers
whether his product has been a success or not.

1
Factors influencing consumer behavior:

The individual determinants that effect consumer behavior are:

 Motivation and involvement

 Attitudes

 Personality and self concept

 Learning

 Information processing

The external influences or factors are:

 Cultural influences

 Sub-cultural influences

 Social class influences

 Social group influences

 Family influences

 Personal influences

 Other influences

INDIVIDUAL DETERMINANTS

Motivational and involvement

In a society, different consumers exhibit different consumer behavior because have

unique sets of needs. Motivation is that internal force that activates some needs and provides
direction of behavior towards fulfillment of these needs. While talking of motivation, we cannot
afford to forget the Maslow’s Hierarchy of needs which tells us about the primary and secondary
needs.

2
 First the biological needs of hunger, thirst, shelter are satisfied then the safety needs and
then the psychological desires of being accepted in society, seeking status, esteem, etc. are
satisfied. Involvement refers to the personal relevance or importance of a product or a service
that a consumer perceives in a given situation. Depending on the value and personal interest, a
consumer can have a high or low involvement. For a professional tennis player, the choice of a
tennis racket is made with great care. He sees the weight, size, grip and tension of the strings etc.

Attitudes

These are our learned predispositions towards people, objects and events. Attitudes are
responsible for our responses and are not inborn but are learnt from people around us. Our
attitudes influence our purchase decisions and consumer. A person having a carefree attitude will
buy an object without much involvement. People who want to play safe and avoid risk taking,
will go for a safe investment. People, who want convenience and are short of domestic help, will
have a positive attitude towards canned and frozen foods.

Personality and self concept

It is the sum total of our mental, physical and moral qualities and characteristics that are
present in us and that make us what we are. Consumers try to buy the products that match their
personality. People wanting to look manly will buy products with a macho appeal, which would
enhance their image and personality. People, who give emphasis on comfort and care, will
purchase comfort products and so on. If one wants to emulate a film star his choice will be
different from others.

Learning and Memory

Every day we are exposed a wide range of information, but retain only a small portion of
it. We tend to remember the information that we are interested in or, that is important to us. In a
family different member of the family are interested in different types of information which they
individually retain. Mothers retain information regarding household items. Father retains
information regarding his interest in cars, motor cycles and other objects. Children are interested
in objects of their interest like amusement parks, joy rides, Barbie dolls, etc.

3
 Our motives, attitudes, personality filters the information. Keeping only relevant information
in our minds and, keeping the others out. This is known as selective retention. We retain in our
memory only selective information that is of interest to us.

Information processing

All consumers’ analyses and process the information they receive. These are activities that a
consumer engages in, while gathering, assimilating and evaluate selective information and this
reflects on their motives, attitudes and personality and self concept. Same information can be
evaluated in a different manner by different individuals. The most common example is a glass
half filled with a liquid. It can be interpreted as “half empty” or half full. The first is a
pessimistic view and the other is an optimistic view of processing the information.

EXTERNAL ENVIRONMENTAL FACTORS AFFECTING CONSUMER BEHAVIOR

Cultural Influences

It is defined as a complex sum total of knowledge, belief, traditions, customer, art, moral law
or any other habit acquired by people as members of a society. Our consumer behavior that is the
things we buy are influenced by our background or culture. Different emphasis is given by
different cultures for the buying, use, and disposing of products. People in south India have a
certain style of consumption of food, clothing, savings, etc. this differs from the people in the
north of India. Different cultures and habits are predominant in different parts of the world.
Japanese have a different culture from that of USA, England or Arabian countries. Therefore, in
consumer behavior culture plays a very important part.

Sub-cultural influences

With in a culture, there are many groups or segments of people with distinct customs,
traditions and behavior. In the Indian culture itself, we have many sub-cultures, the culture of the
south, the north, east and the west. Hindu cultures, Muslim culture, Hindus of the south differ in
culture from the Hindus of the North and so on. Products are designed to suit a target group of
customers which have similar cultural backgrounds and are homogeneous in many respects.

4
Social class

By social class we refer to the group of people who share equal positions in a society.
Social class is defined by parameters like income, education, occupation, etc. within a social
class people share the same values and beliefs and tend to purchase similar kinds of products.
Their choice of residence, type of holiday, entertainment, leisure all seem to be alike. The
knowledge of social class and their consumer behavior is of great value to a marketer.

Social group influences

A group is a collection of individuals who share some consumer relationship, attitudes and
have the same interest. Such groups are prevalent in societies. These groups could be primary
where interaction takes places frequently and, consists of family groups. These groups have a lot
of interaction amongst them and are well knit. Secondary groups are a collection of individuals
where relationship is more formal and less personal in nature.

These could be a political groups, work group and study groups, service organizations like
the Lions, Rotary, etc. the behavior of a group is influenced by other member of the group. An
individual can be a member of various groups and can have varied influences by different
members of groups in his consumption behavior. An individual can be an executive in a
company; can be a member of a political party. He may be a member of a service organization
and of entertainment clubs and study circles. These exert different influences on his
consumption.

Family influence

As has already been said, the family is the most important of the primary group and is the
strongest source of influence on consumer behavior. The family tradition and customs are learnt
by children, and they many behavior patterns from their family members, both consciously and
unconsciously. These behavior patterns become a part of children’s lives. In a joint family, many
decisions are jointly made which also leave an impression on the members of the family.

5
 These days the structure of the family is changing and people are going in more for nucleus
families which consists of parent, and dependent children. The other type of family is the joint
family where mother, father, grandparents and relatives are also living together.

Personal influences

Each individual processes the information received in different ways and evaluates the
products in his personal way. This is irrespective of the influence of the family, social class,
cultural heritage, etc. his own personality ultimately influences his decision. He can have his
personal reasons for likes, dislikes, price, and convenience or status. Some individuals may lay
greater emphasis on price, others on quality, still others on status, symbol, convenience of the
product, etc. personal influences go a long way in the purchase of a product.

Other influences

Consumers are also influenced by national or regional events which could be like the said,
the Olympics, cricket test matches, world cup, the war calamity. These leave permanent or
temporary impressions on the mind of the consumer and affect his behavior. In these events,
products are advertised and sometimes the use of a product like drugs, etc. is discouraged. People
are urged to adopt family planning methods. Situation variables such as product display, price
reduction, free gifts and attractive offers also influence consumer behavior.

External factor cannot affect the decision process directly but, these are also instrumental and
exert an influence on consumer behavior.

Factors affecting consumer can also be studied by dividing the factors into four groups as
shown below. This can be done under four broad headings which can have sub headings as
shown.

6
 1.2 SCOPE OF THE STUDY

 This study specially deals with the consumer behaviour towards Sri Saradha Amabal
Automobiles Pvt Ltd., in Namakkal town.

 The entire survey was conducted for understanding the buyer’s behaviour towards Sri
Saradha Amabal Automobiles Pvt Ltd., and it is very restricted to Namakkal town only.

 The study is only with 100 respondents.

 This study can extend to get the feedback from the consumer about the company

strategies.

 From this study the behaviour of the consumer can be met. This study helps to know the
factors that influence the buyer to buy the product.

7
 1.3 OBJECTIVES OF THE STUDY

I Primary objectives
 To study the consumer behavior with special reference to Ambal Auto.

II Secondary objectives
 To study the demographical factors of the consumers

 To study the consumer behavior towards Ambal Auto

 To identify the factors influencing the consumer behavior

 To assess the satisfaction level of consumers

 To understand the consumers preference among the various products in Ambal

Auto.
 To know the consumer behavior towards quality, price, cost of spare parts and

availability of the products

 To list out the findings and suggestions for increasing the sale of Ambal Auto.

8
 1.4 LIMITATIONS OF THE STUDY

 The analysis of the study is supported only with consumer’s response.

 The size of sample is confined to 100 consumers only. Therefore the generation is not

appropriate.

 The study is confined to the respondents of Salem district only.

 There is no generalizability.

9
 1.5 RESEARCH METHODOLOGY

INTRODUCTION

Research Methodology is a systematic way to solve a research problem; it includes

various steps that are generally adopted by a researcher in studying the problem along with the
logic behind them. The present study was conducted at KCP Solar Industries Ltd., Salem.

RESEARCH DESIGN

“A Research Design is the arrangement of conditions for collection and analysis of data
in a manner that aims to combine relevance to the research purpose with the economy in
procedure”. The research design adopted for the studies is descriptive design. The researcher has
to describe the present situation in order to know the behavior of the consumers. Hence
descriptive research study is used. Descriptive research can only report what has happened and
what is happening.

PERIOD OF STUDY

The duration taken by the researcher for the data collection and analysis regarding the
consumer behavior of Sri Saradha Amabal Automobiles Pvt Ltd., Namakkal for three months.

METHOD OF COLLECTION

The study basically uses primary and secondary data. Primary data means data which is
fresh collected data. Primary data mainly been collected through personal interviews, surveys
etc. Secondary data means the data that are already available. Generally speaking secondary
data is collected by some organizations or agencies which have already been processed when the
researcher utilizes secondary data; the process of secondary data collection and analysis is called
desk research. Secondary data provides economy in time and cost. It is easily available and
unbiased. Secondary data may either be published data or unpublished data. For this study
secondary data were collected from the annual reports of the company and from the company
website. The study depends mainly on the primary data and secondary data namely the text
books, journals, newspapers, magazines and internet.

10
SAMPLING

Sample Size

The study based only on the opinion and expectation of consumer. Total number of
sample taken for the study is 100 respondents.

Sample design

Convenience sampling techniques were used for the study.

Data Collection Method

The collection of data is considered to be one of the important aspects in the research
methodology. There are two types of data that exists one is primary data and the other is
secondary data.

Primary Data

Well structured questionnaire has been used for the col1ection of primary data from the
respondents.

Secondary Data

Secondary data has been collected from the company record, various magazines, journal
and various web sites.

TOOLS USED FOR ANALYSIS

The data collected from the respondents were converted into readable for processing,
classification and arrangements. The data was tabulated and analyzed by using Statistical
Method like Simple Percentage analysis and Chi-Square analysis.

(i) SIMPLE PERCENTAGE ANALYSIS

11
 The word percent is formed of two words ‘Per’ and ‘cent’. ‘Per’ means out of and ‘cent’
means hundred. Therefore percent means out of hundred. The symbol for percent is %.
Percentage is a fraction with denominator as 100. Percentage is used in making comparison
between two or more series of data. Percentages are used to describe the relationship. Simple
percentage can also be used to compare the relative terms.

Number of respondents
Percentage = x 100
Total number of respondents

(ii) CHI – SQUARE TEST

The c2 test (Pronounced as Chi-Square test) is one of the simplest and most widely used
non-parametric tests in statistical work. The symbol c2 is the Greek, letter chi. The c2 test was
first used by Karl Peason in the year 1990. The quantity c2 describes the magnitude of the
discrepancy between theory and observation. It is defined as :

c2 = S (O-E)2 / E V= (r-1) (c-1)

Where,
O = refers to the observed frequencies

E = refers to the expected frequencies

Calculation of expected frequency:

E = RT x CT / N
E = Expected frequency
RT = The row total for the row containing the cell
CT = The column total for the column containing the cell
N = The total number of observations

12
 CHAPTER II

2.1 REVIEW OF LITERATURE

INTRODUCTION

The literature review section examines recent (or historically significant) research
studies, company data, or industry reports that acts as a basis for the proposed study. The
literature review may also explain the need for the proposed work to appraise the shortcomings
and informational gaps in secondary data sources. The researcher may review two types of
literature – the conceptual literature, and the empirical literature. The purpose is “to locate the
present research in the existing body of research on the subject and to point out what it
contributes to the subject.

Consumer Behavior

Personality characteristics impact consumer behavior because they shape the way in
which consumers respond to messages at a given time. This response changes minute to minute
based upon the unique characteristics of the target consumer and their ongoing life experience.

The online environment presents a vast opportunity for companies to interact with
consumers on a personal, customized level. Individual differences are an important aspect of this
interaction as they provide insight into how people with varying levels of experience with the
online environment respond to interactive persuasion techniques.

Friestad and Wright (1994), in their presentation of the PKM, posit that the effectiveness
of advertising persuasion techniques depends upon the level of persuasion expertise each
individual possesses. In an online environment, measurement of this effect can be achieved by
looking at user experience levels, self efficiency, and number of hours spent online. General
knowledge gleaned from the PKM dictates that consumers with more experience in the online
environment will be better at coping with persuasion techniques therein, such as open, visually
theoretical advertisements.

13
 An individual's need for recognition refers to their motivation to engage in meaningful
recognition thought or undertaking. A consumer's need for cognition will impact their ability to
deal with tasks and social settings, such as responding to advertising messages or calls to action.
This applies directly to the concept of open, visually theoretical advertising because such
messages require a higher cognitive processing load to be understood and learned.

Although need for cognition was not found to impact interpretations of open
advertisements in the 2004 Ketelaar et al. study, it is still an interesting variable that can be
effectively measured and manipulated for this type of research endeavor. (Ketelaar et al., 2004)
Additionally, cognitive response, and the need therein serve an important part in the
development of brand attitudes within a target consumer. This concept was elaborated upon by
McGinnis and Jaworski (1989) in their seminal piece regarding information processing in
advertising: "Cognitive and emotional responses related to imagined product consumption
experiences are the strongest determinants of brand attitude." (MacInnis & Jaworski, 1989) .

As shown, need for cognition is linked to the development of brand attitude in

consumers. When examined in terms of its relationship to time spent processing online, visually
theoretical advertising, need for cognition could prove to be an interesting difference within the
sample group. In addition to need for cognition, an internal motivation toward the product being
advertised should be apparent within driven consumers. This motivation helps push the
consumer toward traveling the visual riddle presented in an open advertisement.

Type of motivation, either utilitarian ("goal-oriented") or hedonic ("expressive"), is a

diverse and interesting factoring to analyze across consumer groups. As shown in research
undertaken by Phillips (2000), consumers with utilitarian, goal-oriented motivations are keep on
evaluating product attributes and therefore less likely to be attracted to open advertisements.
Consumers with hedonic or "expressive" goals are more likely to seek out the entertainment
value in the open advertisement. (Phillips, 2000) To further support this stance, Huang (2003), in
his online study of websites, found that level of attention in consumers is most linked to
utilitarian design while both control and interest are linked to hedonic performance measures.
Liu, et al (2002), based on their online research, concluded that higher levels of active control
within consumers resulted in being geared towards more utilitarian, goal-based website designs.

14
 CHAPTER II

2.1 INDUSTRY PROFILE

India domestic auto industry has been passing through a tough phase in 2008 and such a trend is
supposed to continue in 2009 as well. Leading members of India auto industry have forecast a
difficult path in 2009. Shinzo Nakanishi, Managing Director of Maruti Suzuki, has said that 2009
would present them with a number of challenges fitted greatly from China auto insurance
policies. One examples is Huatai Insurance Co, Which generates 70 percent of its income from
these policies.
 Hero Honda Motors
 Hyundai Motors
 Mahindra & Mahindra
 Maruti Udyog
 San Motors
 Skoda
 Tata Motors

The Automobile industry in India is the seventh largest in the world with an annual production of
over 2.6 million units in 2009.In 2009. India emerged as Asia's fourth largest exporter of
automobiles, behind Japan, South Korea and Thailand. By 2050, the country is expected to top
the world in car volumes with approximately 611 million vehicles on the nation's roads
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.

However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the
license raj which hampered the Indian private sector. After 1970, the automotive industry started

15
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. India
has emerged as one of the world's largest manufacturers of small cars. According to New York
Times, India's strong engineering base and expertise in the manufacturing of low- cost, fuel-
efficient cars has resulted in the expansion of manufacturing facilities of several automobile
companies like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki.

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. Similarly, General Motors
announced its plans to export about 50,000 cars manufactured in India by 2011.

In September 2009, Ford Motors announced its plans to setup a plant in India with an annual
capacity of 250,000 cars for US$500 million. The cars will be manufactured both for the Indian
market and for export. The company said that the plant was a part of its plan to make India the
hub for its global production business. Fiat Motors also announced that it would source more
than US$1 billion worth auto components from India.

Auto Industry Trends

In keeping with auto industry trends, leading automobile manufacturers are turning to Asian
markets that appear set to grow immensely over next decade. Auto markets in U.S Europe and
Japan have almost matures as a result of saturation and appear set to decline through next
decade. In contrast, auto markets spread over entire Asian continent (with exception of Japan),
are constantly increasing in size and will be destination for most of globally leading auto
manufacturers. Auto industry treads reveal that emerging markets of developing nations of Asia
especially China, and India are backed by their huge population growth rate, to add to growing
national economy of these two nations.

In addition, these arrangements are enabling leading global auto manufacturers to compete with
local auto manufacturers, that were flourishing in absence of quality competition.

16
Prosperity of national economy is reflected in rising per capital income of developing nations.
Therefore, increasing gross domestic product and per capita income have raised purchasing
ability of population that constitutes these emerging markets. As a growing percentage of
population in developed nations age rapidly, in comparison to rest of world, these aging numbers
necessitate cars to fit physiological change of world population.

India Automobile Market

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 2004 Indian auto
markets were fastest growing in world, with registered growth rate touching nearly 20 percent.

Many foreign companies have been investing in the Indian Automobile Market in various ways
such as technology transfers, joint ventures, strategic alliances, exports, and financial
collaborations. The auto market in India can boast of attractive finance schemes, increasing
purchasing power, and launch of the latest products. Some vital statistics regarding the
automobile market in India has been mentioned below:
 Fourwheelers – 2nd largest in the world
 Commercial Vehicle – 4th largest in the world
 Passenger car- 11th largest in the world.

As such, the Indian automobile market comprises of a wide variety of vehicles such as light,
medium, and heavy commercial vehicles, cars, scooters, mopets, motor cycles, 3 wheelers, and
multi-utility vehicles such as jeeps and trax. With the increasing growth in demand on back of
rising income, expanding middle class and young population base, in addition to a large pool of
skilled manpower and growing technology, will propel India to be among the world's top five
auto-producers by 2015.

17
The automobile industry accounts for 22 per cent of the country's manufacturing gross domestic
product (GDP). The auto sector is one of the biggest job creators, both directly and indirectly. It
is estimated that every job created in an auto company leads to three to five indirect ancillary
jobs. India is expected to become a major automobile manufacturing hub and the third largest
market for automobiles by 2020, according to a report published by Deloitte. India is currently
the seventh-largest automobiles producer in the world with an average annual production of 17.5
million vehicles, and is on way to become the fourth largest automotive market by volume, by
2015.

Market Size
The growth story for the Indian automobile industry in 2014 rode on the two-wheeler segment.
The segment has clocked positive growth at 12.9 percent year-on-year to reach sales of nearly
13.5 million units by October 2014. India's automobile sector has also picked up pace, with
eight of the country's leading manufacturers' reporting combined passenger vehicle sales of
198,427 in November 2014, a 10 per cent annual rise. The rise in sales in November 2014 was
led by Maruti Suzuki, whose sales increased 17 per cent to 100,024 units in the domestic market.
The commercial vehicles (CV) industry in India has registered an increase of 8.59 per cent in
September 2014, as fleet owners have started to buy trucks in the anticipation of an improved
economic activity.

The automobile sector in Andhra Pradesh has a potential for US$ 1 billion investment and US$
1.50 billion output, according to a recent analysis by Automotive Components Manufacturers’
Association of India (ACMA) and city-based Andhra Chamber of Commerce and Industry
Federation (ACCIF).

Investments
To match production with demand, many auto makers have started to invest heavily in various
segments in the industry in the last few months. The industry has attracted FDI worth US$
11,351.26 million during the period April 2000 to November 2014, according to the data
released by Department of Industrial Policy and Promotion (DIPP). Some of the major
investments and developments in the automobile sector in India are as follows:

18
  Snapdeal.com has entered into a partnership with Hero MotoCorp Ltd to sell two-
wheelers and expect its online automobile sales to generate Rs 1,000 crore (US$ 162.33
million) of business in next six to 10 months.
 Automotive supplier Uno Minda and Japan’s Toyoda Gosei Co Ltd have announced a
joint venture (JV) partnership to manufacture and sell rubber hoses to automobile makers
in India. The JV will be set up with a total investment of Rs 85.3 crore (US$ 13.84
million) in a phased manner.
 Tafe Motors and Tractors Ltd (TAFE) has invested around US$ 140 million by way of
equity in the US-based AGCO Corporation, a worldwide manufacturer and distributor of
agricultural equipment.
 Flipkart founders Mr Sachin Bansal and Mr Binny Bansal have led a US$ 1 million
investment in Ather, an electric vehicle start-up focused on designing high-speed electric
two-wheelers.
 Harley Davidson Motor Co. has expanded their line up in India as it has launched three
new models— the Breakout, Street Glide and CVO limited edition.
 Hero Electric is looking for merger and acquisition (M&A) options or technology tie-ups
to encourage its next generation electric vehicle technology.

Government Initiatives
The Government of India encourages foreign investment in the automobile sector and allows 100
per cent FDI under the automatic route. To boost manufacturing, the government had lowered
excise duty on small cars, motorcycles, scooters and commercial vehicles to eight per cent from
12 per cent, on sports utility vehicles to 24 per cent from 30 per cent, on mid-segment cars to 20
per cent from 24 per cent and on large-segment cars to 24 per cent from 27 per cent.
Some of the major initiatives taken by the Government of India are:
 The government’s decision to resolve VAT disputes has resulted in the top Indian auto
makers namely, Volkswagen, Bajaj Auto, Mahindra & Mahindra and Tata Motors
announcing an investment of around Rs 11,500 crore (US$ 1.86 billion) in Maharashtra.
 The Automobile Mission Plan for the period 2006–2016, designed by the government is
aimed at accelerating and sustaining growth in this sector. Also, the well-established

19
 Regulatory Framework under the Ministry of Shipping, Road Transport and Highways,
plays a part in providing a boost to this sector.
 The Government of India-appointed SIAM and Automotive Components Manufacturers
Association (ACMA) are responsible in working for the development of the Indian
automobile industry.
 The government plans to come out with policies to introduce clean fuels such as
biodiesel, bioethanol and electricity for public transport vehicles and school buses in big
cities to tackle air pollution.
 The Lok Sabha passed the Motor Vehicles Amendment Bill, 2014, paving the way for
regularisation of e-rickshaws.
 The government has set up National Automotive Testing and R&D Infrastructure Project
(NATRiP) at a total cost of US$ 388.5 million to enable the industry to be on par with
global standards.

Road Ahead
India is probably the most competitive country in the world for the automotive industry. It does
not cover 100 per cent of technology or components required to make a car but it is giving a
good 97 per cent, highlighted Mr Vicent Cobee, Corporate Vice-President, Nissan Motor’s
Datsun. The vision of AMP 2006-2016 sees India, “to emerge as the destination of choice in the
world for design and manufacture of automobiles and auto components with output reaching a
level of US$ 145 billion; accounting for more than 10 per cent of the GDP and providing
additional employment to 25 million people by 2016.”

Exchange Rate Used: INR 1 = US$ 0.0162 as on January 21, 2015

References:Media Reports, Press Releases, Department of Industrial Policy and Promotion
(DIPP), Automotive Component Manufacturers Association of India (ACMA), Society of Indian

Automobile Manufacturers (SIAM), Union Budget 2014-15.

India domestic auto industry has been passing through a tough phase in 2008 and such a trend is
supposed to continue in 2009 as well. Leading members of India auto industry have forecast a
difficult path in 2009. Shinzo Nakanishi, Managing Director of Maruti Suzuki, has said that 2009

20
would present them with a number of challenges fitted greatly from China auto insurance
policies. One examples is Huatai Insurance Co, Which generates 70 percent of its income from
these policies.
 Hero Honda Motors
 Hyundai Motors
 Mahindra & Mahindra
 Maruti Udyog
 San Motors
 Skoda
 Tata Motors

The Automobile industry in India is the seventh largest in the world with an annual
production of over 2.6 million units in 2009.In 2009. India emerged as Asia's fourth largest
exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the country is
expected to top the world in car volumes with approximately 611 million vehicles on the nation's
roads 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.

However, the growth was relatively slow in the 1950s and 1960s due to nationalisation
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. India has emerged as one of the world's largest manufacturers of small
cars. According to New York Times, India's strong engineering base and expertise in the
manufacturing of low- cost, fuel-efficient cars has resulted in the expansion of manufacturing

21
facilities of several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen
and Suzuki.
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. Similarly, General
Motors announced its plans to export about 50,000 cars manufactured in India by 2011.
In September 2009, Ford Motors announced its plans to setup a plant in India with an
annual capacity of 250,000 cars for US$500 million. The cars will be manufactured both for the
Indian market and for export. The company said that the plant was a part of its plan to make
India the hub for its global production business. Fiat Motors also announced that it would source
more than US$1 billion worth auto components from India.

Auto Industry Trends

In keeping with auto industry trends, leading automobile manufacturers are turning to
Asian markets that appear set to grow immensely over next decade. Auto markets in U.S Europe
and Japan have almost matures as a result of saturation and appear set to decline through next
decade. In contrast, auto markets spread over entire Asian continent (with exception of Japan),
are constantly increasing in size and will be destination for most of globally leading auto
manufacturers.
Auto industry treads reveal that emerging markets of developing nations of Asia
especially China, and India are backed by their huge population growth rate, to add to growing
national economy of these two nations. In addition, these arrangements are enabling leading
global auto manufacturers to compete with local auto manufacturers, that were flourishing in
absence of quality competition.
Prosperity of national economy is reflected in rising per capital income of developing
nations. Therefore, increasing gross domestic product and per capita income have raised
purchasing ability of population that constitutes these emerging markets.As a growing
percentage of population in developed nations age rapidly, in comparison to rest of world, these
aging numbers necessitate cars to fit physiological change of world population.

22
India Automobile Market
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 2004 Indian auto markets
were fastest growing in world, with registered growth rate touching nearly 20 percent.
Many foreign companies have been investing in the Indian Automobile Market in various
ways such as technology transfers, joint ventures, strategic alliances, exports, and financial
collaborations. The auto market in India can boast of attractive finance schemes, increasing
purchasing power, and launch of the latest products.
Some vital statistics regarding the automobile market in India has been mentioned below:
 Fourwheelers – 2nd largest in the world
 Commercial Vehicle – 4th largest in the world
 Passenger car- 11th largest in the world.

As such, the Indian automobile market comprises of a wide variety of vehicles such as
light, medium, and heavy commercial vehicles, cars, scooters, mopets, motor cycles, 3 wheelers,
and multi-utility vehicles such as jeeps and trax. The Indian automotive industry consists of five
segments: commercial vehicles; multi-utility vehicles & passenger cars; two-wheelers; three-
wheelers; and tractors. With 5,822,963 units sold in the domestic market and 453,591 units
exported during the first nine months of FY2005 (9MFY2005), the industry (excluding tractors)
marked a growth of 17% over the corresponding previous. The two-wheeler sales have witnessed
a spectacular growth trend since the mid nineties.

23
Four-wheelers: Market Size & Growth

In terms of volume, 4,613,436 units of two-wheelers were sold in the country in

9MFY2005 with 256,765 units exported. The total two-wheeler sales of the Indian industry
accounted for around 77.5% of the total vehicles sold in the period mentioned.

FY1998 took a heavy toll of two-wheeler sales, with the year-on-year sales (volume)
growth rate declining to 3% that year. However, sales picked up thereafter mainly on the strength
of an increase in the disposable income of middle-income salaried people (following the
implementation of the Fifth Pay Commission's recommendations), higher access to relatively
inexpensive financing, and increasing availability of fuel efficient two-wheeler models.
Nevertheless, this phenomenon proved short-lived and the two-wheeler sales declined marginally
in FY2001. This was followed by a revival in sales growth for the industry in FY2002. Although,
the overall two-wheeler sales increased in FY2002, the scooter and moped segments faced de-
growth. FY2003 also witnessed a healthy growth in overall two-wheeler sales led by higher
growth in motorcycles even as the sales of scooters and mopeds continued to decline. Healthy
growth in two-wheeler sales during FY2013 was led by growth in motorcycles even as the
scooters segment posted healthy growth while the mopeds continued to decline.

Demand Drivers

The demand for two-wheelers has been influenced by a number of factors over the past
five years. The key demand drivers for the growth of the two-wheeler industry are as follows:
 Inadequate public transportation system, especially in the semi-urban and rural areas;
 Increased availability of cheap consumer financing in the past 3-4 years;
 Increasing availability of fuel-efficient and low-maintenance models;
 Increasing urbanization, which creates a need for personal transportation;
 Changes in the demographic profile;
 Difference between two-wheeler and passenger car prices, which makes two-wheelers the
entry level vehicle;
 Steady increase in per capita income over the past five years; and
 Increasing number of models with different features to satisfy diverse consumer needs.

24
 While the demand drivers listed here operate at the broad level, segmental demand is
influenced by segment-specific factors.

MARKET CHARACTERISTICS

Demand

Segmental Classification and Characteristics

The three main product segments in the two-wheeler category are scooters, motorcycles
and mopeds. However, in response to evolving demographics and various other factors, other sub
segments emerged, viz. scooterettes, gearless scooters, and 4-stroke scooters. While the first
fouremerged as a response to demographic changes, the introduction of 4-stroke scooters has
followed the imposition of stringent pollution control norms in the early 2000. Besides, these
prominent sub-segments, product groups within these sub-segments have gained importance in
the recent years. Examples include 125cc motorcycles, 100-125 cc gearless scooters, etc. The
characteristics of each of the three broad segments are discussed in Table 1.

Table 1

Two-Wheelers: Comparative Characteristics

  Scooter Motorcycle Moped

Price*(Rs. as in
> 22,000 > 30,000 > 12,000
January 2005)

Stroke 2-stroke, 4-stroke Mainly 4-stroke 2-stroke

Engine Capacity
90-150 100, 125, > 125 50, 60
(cc)

Ignition Kick/Electronic Kick/Electronic Kick/Electronic

Engine Power (bhp) 6.5-9 7-8 and above 2-3

25
 Weight (kg) 90-100 > 100 60-70

Fuel Efficiency
50-75 50-80+ 70-80
(kms per litre)

Load Carrying High Highest Low

Segmental Market Share

The Indian two-wheeler industry has undergone a significant change over the past 10
years with the preference changing from scooters and mopeds to motorcycles. The scooters
segment was the largest till FY1998, accounting for around 42% of the two-wheeler sales
(motorcycles and mopeds accounted for 37% and 21 % of the market respectively, that year).
However, the motorcycles segment that had witnessed high growth (since FY1994) became
larger than the scooter segment in terms of market share for the first time in FY1999. Between
FY1996 and 9MFY2005, the motorcycles segment more than doubled its share of the two-
wheeler industry to 79% even as the market shares of scooters and mopeds stood lower at 16%
and 5%, respectively.

While scooter sales declined sharply by 28% in FY2001, motorcycle sales reported a
healthy growth of 20%, indicating a clear shift in consumer preference. This shift, which
continues, has been prompted by two major factors: change in the country's demographic profile,
and technological advancements.
Over the past 10-15 years the demographic profile of the typical two-wheeler customer
has changed. The customer is likely to be salaried and in the first job. With a younger audience,
the attributes that are sought of a two-wheeler have also changed. Following the opening up of
the economy and the increasing exposure levels of this new target audience, power and styling
are now as important as comfort and utility.
The marketing pitch of scooters has typically emphasised reliability, price, comfort and
utility across various applications. Motorcycles, on the other hand, have been traditionally
positioned as vehicles of power and style, which are rugged and more durable. These features
have now been complemented by the availability of new designs and technological innovations.

26
Moreover, higher mileage offered by the executive and entry-level models has also attracted
interest of two-wheeler customer. Given this market positioning of scooters and motorcycles, it
is not surprising that the new set of customers has preferred motorcycles to scooters. With better
ground clearance, larger wheels and better suspension offered by motorcycles, they are well
positioned to capture the rising demand in rural areas where these characteristics matter most.
Scooters are perceived to be family vehicles, which offer more functional value such as
broader seat, bigger storage space and easier ride. However, with the second-hand car market
developing, a preference for used cars to new two-wheelers among vehicle buyers cannot be
ruled out. Nevertheless, the past few years have witnessed a shift in preference towards gearless
scooters (that are popular among women) within the scooters segment. Motorcycles, offer higher
fuel efficiency, greater acceleration and more environment-friendliness. Given the declining
difference in prices of scooters and motorcycles in the past few years, the preference has shifted
towards motorcycles. Besides a change in demographic profile, technology and reduction in the
price difference between motorcycles and scooters, another factor that has weighed in favour of
motorcycles is the high re-sale value they offer. Thus, the customer is willing to pay an up-front
premium while purchasing a motorcycle in exchange for lower maintenance and a relatively
higher resale value.

Manufacturers

As the following graph indicates, the Indian two-wheeler industry is highly concentrated,
with three players-

 Hero Honda Motors Ltd (HHML),

 Bajaj Auto Ltd (Bajaj Auto) and
 TVS Motor Company Ltd (TVS)
- accounting for over 80% of the industry sales as in 9MFY2005.

The other key players in the two-wheeler industry are:

 Kinetic Engineering Ltd (KEL),
 LML Ltd (LML),
 Yamaha Motors India Ltd (Yamaha),
27
  Majestic Auto Ltd (Majestic Auto),
 Royal Enfield Ltd (REL) and
 Honda Motorcycle & Scooter India (P) Ltd (HMSI).

Shares of Two-Wheeler Manufacturers in Industry Sales (FY2000-9MFY2005)

Although the three players have dominated the market for a relative long period of time,
their individual market shares have undergone a major change. Bajaj Auto was the undisputed
market leader till FY2000, accounting for 32% of the two-wheeler industry volumes in the
country that year. Bajaj Auto dominance arose from its complete hold over the scooter market.
However, as the demand started shifting towards motorcycles, the company witnessed a gradual
erosion of its market share. HHML, which had concentrated on the motorcycle segment, was the
main beneficiary, and almost doubled its market share from 20% in FY2000 to 40% in
9MFY2005 to emerge as the market leader. TVS, on the other hand, witnessed an overall decline
in market share from 22% in FY2000 to 18% in 9MFY2005.

Technology

Hitherto, technology transfer to the Indian two-wheeler industry took place mainly
through: licensing and technical collaboration (as in the case of Bajaj Auto and LML); and joint
ventures (HHML).
28
 A third form - that is, the 100% owned subsidiary route - found favour in the early 2000s.
A case in point is HMSI, a 100% subsidiary of Honda, Japan. Table 2 details the alliances of
some major two-wheeler manufacturers in India.
Besides the below mentioned technology alliances, Suzuki Motor Corporation has also
followed the strategy of joint ventures (SMC reportedly acquired equity stake in Integra
Overseas Limited for manufacturing and marketing Suzuki motorcycles in India).
Table 2

Technological tie-ups of Select Players

  Nature of Alliance Company Product

Bajaj Auto Technological tie-up Kawasaki Heavy Industries Ltd, Motorcycles
Japan
Technological tie-up Tokya R&D Co Ltd, Japan Two-wheelers
Technological tie-up Kubota Corp, Japan Diesel
Engines
HHML Joint Venture Honda Motor Co, Japan Motorcycles
KEL Technological tie-up Hyosung Motors & Machinery Motorcycles
Inc
KEL Tie up for Italjet, Italy Scooters
manufacturing
and distribution
LML Technological tie-up Daelim Motor Co Ltd Motorcycles
Hero Technological tie-up Aprilia of Italy Scooters
Motors

With the two-wheeler market, especially the motorcycle market, becoming extremely
competitive and the life cycle of products getting shorter, the ability to offer new models to meet
fast changing customer preferences has become imperative. In this context, the ability to deliver
newer products calls for sound technological backing and this has become one of the critical
differentiating factor among companies in the domestic market. Thus, the players have increased
their focus on research and development with some having indigenously developed new models
as well as improved technologies to cater to the domestic market. Further, with exports being one
of the thrust areas for some Indian two-wheeler companies, the Indian original equipment
manufacturers (OEMs) have realized the need to upgrade their technical capabilities. These

29
relate to three main areas: fuel economy, environmental compliance, and performance. In India,
because of the cost-sensitive nature of the market, fuel efficiency had been an interest area for
manufacturers.
It is not only that the OEMs are increasing their focus on in-house R&D, they also
provide support to the vendors to upgrade the technology and also assist them striking
technological alliances.

TRENDS IN THE FOUR-WHEELER INDUSTRY

Companies raising capacity to meet the growing demand

All the major two-wheeler manufacturers, viz. Bajaj Auto, HHML, TYS, HMSI and
others, have increased their manufacturing capacities in the recent past. The total capacity of
these players stood at 7.8 million units per annum (FY2003) as against total market sales of 3.8
million units in FY2002. Most of the players have either expanded capacity, or converted their
existing capacities for scooters and mopeds into those for manufacturing motorcycles. The move
has been prompted by the rapid growth reported by the motorcycles segment since FY1995.
HHML increased the capacity of its plants from 1.8 million units in FY2003 to 2.25
million in FY2004 and has been able to achieve 92% capacity utilisation. In light of the increase
in demand for motorcycles, the company plans to set up a new plant. Since its entry in the Indian
market during FY2002, HMSI has aggressively expanded its capacity.

Niche markets also witnessing intense competition

A significant trend witnessed over the past five years is the inclination of consumers
towards products with superior features and styling. Better awareness about international models
has raised expectations of consumers on some key attributes, especially quality, styling, and
performance. High competitive intensity has prompted players to launch vehicles with improved
attributes at a price less than the competitive models.
In an effort to satisfy the distinct needs of consumers, producers are identifying emerging
consumer preferences and developing new models. For instance, in the motorcycles segment,
motorcycles with engine capacity over 150cc, is a segment that has witnessed significant new

30
product launches and hence, become more competitive. The indigenously launched Pulsar 150
had met with success on its launch and thereafter, a host of models have been launched in this
segment by various players. While Bajaj Auto launched the Pulsars (150 and 180 cc) with digital
twin spark technology (DTSi) that offers a powerful engine and fuel efficiency of 125 cc models,
model launches by other players include LML's Graptor/Beamer, HMSI's Unicorn besides the
HHML's CBZ (improved version launched in 2003-04) and TVS' Fiero F2.

Moreover, in the recent past, the motorcycle segment has witnessed launch of vehicles
with higher engine capacity (higher than 150cc) and power (higher than 15bhp). These include
models such as Bajaj Auto Eliminator and Royal Enfield's Thunderbird followed by HHML's
Karisma. Besides these, KEL has launched premium segment motorcycles GF 170 and GF Laser
besides launching products from the portfolio of its technology partner (Hyosung's Aquila and
Comet 250). The products in this segment cater for style conscious consumers. Quite a few
players are developing models combining features such as higher engine capacity" optimum mix
of power and performance, and superior styling. However, the extent of shift to these products
would depend on the positioning of such products in terms of price.
In the scooters segment, the market for plastic-bodied variomatic scooters continues to
witness growth in the scenario of overall decline in scooter volumes. Higher volumes and growth
are especially true for certain scooter models, such as Honda Activa, that brought in new
technology (besides variomatic transmission) to further differentiate themselves. Thus, the need
to differentiate and create a niche has led to companies strengthening their research and
development (R&D) capabilities and reducing the development time for new models.

Increasing focus on exports

For the first nine months of FY2005, two-wheeler exports increased by 37% over the
corresponding previous, led mainly by motorcycles even as exports of other two-wheelers were
healthy. While motorcycle exports increased by 40%, scooter and moped exports increased by
29% and 27% respectively. Motorcycle exports by Bajaj Auto, HHML and TVS have reported
a to bust growth in FY2005 and are expected to increase further in the medium term.

Table 3

Two-Wheeler Exports from India (in numbers)

31
   FY2000 FY2001 FY2002 FY2003 FY2004 CAGR 9MFY2005
(FY2000-
04)
Scooters 20,188 25,625 28332 30116 53148 27.4 44832
Motorcycles 35,295 41,339 56,880 126122 187287 51.4 188807
Mopeds 27,754 44,174 18,971 23330 24234 -3.3 22739
Total 83,237 111,138 104183 179568 264669 33.5 256378

Although the Indian two-wheeler manufacturers have forayed on their own in their target
export markets, there have been instances of tie-ups with the technology partners. Bajaj Auto's
tie-up with Kawasaki to jointly market Bajaj products in Philippines is a case in point. Under the
tie-up, M/s Kawasaki Motors Philippines Corporation has been appointed as exclusive
distributors to market select Bajaj two-wheelers that include Byk, Caliber 115 and Wind 125.
These vehicles are being sent to Philippines in the completely built unit (CBU) form.

Other strategy of expanding international presence considered by few players is that of

setting up assembly lines in select South East Asian countries either on their own or in
partnership with local players. Besides, plans of select overseas technology partners to source
from their Indian partners and plans of global majors to develop their Indian manufacturing unit
as a sourcing hub may also lead to increase in two-wheeler exports from India.
Company wise two-wheeler exports since FY2000 are presented in the following Table 4.

Table 4

Company-wise two-wheeler exports (FY2000-9MFY2005)

32
 CAGR
  FY2000 FY2001 FY2002 FY2003 FY2004 9MFY2005
(FY2000-04)

Bajaj Auto 14924 16112 28527 53366 90210 56.8 87225

HHML 10061 10324 13023 21165 39254 40.5 43441
HMSI 0 0 1293 10916 31414 n.a 27734
TVS 7265 6621 7765 9636 28093 40.2 36666
Yamaha 15197 20446 20321 45546 32906 21.3 27539
Others 35790 57635 32752 39053 42792 4.6 33773
Total 83237 111138 103681 179682 264669 33.5 256378

Vehicle Emission Norms

Emission norms for all categories of petrol and diesel vehicles at the manufacturing stage
were introduced for the first time in India in 1990 and were made stricter in 1996. When the
1996 norms were introduced, it resulted in certain models being withdrawn from the market.
With Stage I India 2000 emission norms coming into place, the cost of developing suitable
technology has remained high.
The emission norms that are currently in force for two-wheelers and three-wheelers are
more stringent than the Euro II norms. The roadmap suggested for emission norms for two/three-
wheelers by the Expert Committee on Auto Fuel Policy is as follows:

For two-/three-wheelers the emission norms are recommended to be the same in the entire
country:

For new vehicles:

 Bharat Stage II norms throughout the country from April 1, 2005

 Bharat Stage III norms to be applicable preferably from April 1, 2008 but not later than
April 1, 2010.

For reducing pollution from in-use vehicles

 New pollution under control (PUC) checking system for all categories of vehicles to be
put in place by April 1, 2005

33
  Inspection & maintenance (I&M) system for all categories of vehicles to be put place by
April 1, 2010
 Performance checking system of catalytic converters and conversion kits installed in
vehicles to be put in place by April 1, 2007.
Table 5 presents the emission norms for two-wheelers that were in place in the past, the
India 2000 emission norms, and the norms that have been implemented for April 2005 (Stage II)
and proposed for 2008 (Stage III).

Table 5

Exhaust Emission Norms

Vehicle Pollutants Old Norms 1996 2000 2005* 2008/10**

TwO-wheelers CO 12-30 4.5 2.0 1.5 1
(gm/Km) HC+Nox 8-12 3.6 2.0 1.5 1
Three-wheelers CO 12-30 6.8 4.0 2.25 1.25
(petrol) HC+Nox 8-12 5.4 1.5 2 1.25
CO 1 1.1
Three-wheelers
HC+Nox 0.85 1
(Diesel)
PM 0.10 0.05

CO: Carbon Monoxide; HC: Hydrocarbon; Nox: Nitrogen Oxide, PM: Particulate
Matter, *: Maximum Sulphur parts per million (ppm) permissible of 150 and **: Maximum
Sulphur ppm permissible of 50 Compiled by INGRES to be able to meet the exhaust norms, the
Auto Fuel Policy has suggested following technologies:

Table 6

Technologies for meeting the emission norms for Spark Ignited Vehicles

34
   2/3 - wheelers  
Level of Emission
2-Stroke Technology 4-Stroke Technology
Norms
Euro I/India 2000 Intake, exhaust, combustion 4-Stroke engine
optimisation Catalytic technology
converter
Euro II/Bharat Stage II Secondary air injection Hot tube Secondary
Caatalytic air injection
Converter
Euro III/Bharat Stage Fuel injection Catalytic Fuel injection
III converter Carburetor + catalytic
converter
Euro IV/Bharat Stage To be developed Learn burn Fuel injection
IV + catalytic converter

The adoption of new technologies for compliance with stricter emission norms may affect
the prices of vehicles. Some two-wheeler manufacturers are testing electronic fuel injection
systems for motorcycles. To begin with, electronic systems are likely to be introduced in
premium segment motorcycles.

Fiscal Policy

The Union Budget for 2001-02 had lowered the excise duty on two-wheelers (with
engine capacity in excess of 75 cc) from 24% to 16%. The manufacturers responded to this by
passing on a relatively large part of the excise cut to customers. The Union Budget thereafter has
left the excise duty on two-wheelers unchanged. But the Union Budget 2004-05 provides for a
weighted deduction of 150% for investments in R&D. This may facilitate increasing R&D
allocations and allow for improvement in the technical as well as product development skills of
the Indian companies.

Indian Auto Policy 2002

35
 The Government of India approved a comprehensive automotive policy in March 2002,
the main proposals of which are as under:
Foreign direct investment: Automatic approval is proposed to be granted to foreign
equity investment up to 100% for manufacture of automobiles and components.
Import tariff: Import tariffs are proposed to be fixed at a level such that they facilitate
the development of manufacturing capabilities as opposed to mere assembly.
Incentives for R&D: The weighted average tax deduction under the Income Tax Act,
1961 for automotive companies is proposed to be increased from current level of 125% (The
weighted average deduction for R&D was increased to 150% in the Union Budget 2004-05).
Further, the policy proposes to include vehicle manufacturers for a rebate on the applicable
excise duty for every 1% of the gross turnover of the company expended during the year on
R&D.
Environmental aspects: Adequate fiscal incentives are proposed to promote the use of
low-emission auto fuel technology (in line with the Auto Fuel Policy). The auto policy states the
Government's intent to align domestic policy with the international practice of imposing higher
road tax on old vehicles so as to discourage their use.

2.2 Company profile

Welcome to Ambal Auto

Ambal Auto started in the year 1998 as a dealer for Maruti Cars in the city of Coimbatore. Now
Fifteen years old it has spread across the districts of Coimbatore, Nilgiris, Erode and Namakkal
with 9 sales outlets and 15 workshops. As a group with a sales of around 600 cars per month.

36
The service volume is around 10,000 cars per month. And body repairs of around 1500 cars /
month. Ambal Auto is one of the larger dealers for Maruti in Tamilnadu. It has won many
awards and accolades from Maruti Suzuki. Its the first Platinum dealer of Maruti in the MSIL
balance score card evaluations.

Ambal Auto workshop is easily accessible from any corner of the town with three well equipped
workshops in Coimbatore and one each at Erode, Namakkal & Ooty. The workshops are well
equipped with modern machinery. The workshop is equipped with highly modern machinery like
the ISTOBAL (Automatic Car Washer), John Bean Wheel Aligner, Engine Analyzer; Hands free
fully automated pneumatic tools, Mig Mag Welding etc., to ensure timely and trouble free
delivery of vehicles. Ambals workshops have well trained manpower to meet the service
requirements of the customers.

To necessitate Easy access to customers, Ambal NSR Road workshop now operates from 7am to
9pm. Two well organized accident care units one each at Coimbatore and Erode work to meet
the customer needs. These have well trained service advisors and supervisors to cater all
accidental and insurance procedures. The Body shop has dust free paint booths and paint mixing
racks of all leading Maruti colors. An exclusive spare parts division with all necessary Maruti
genuine parts and Maruti Genuine Accessories are available to meet the necessary needs of the
customers at all the three workshops.

Maruti Driving School

Road safety is a key concern area for both the Government and the people on Indian roads. Safe
driving today requires a higher level of confidence and competence, given the poor traffic
planning, increasing number of vehicles, lack of professionalism in driving and untrained drivers
on road. In a bid to address these issues, Maruti Suzuki India Ltd. has launched Maruti Driving
School — its initiative for promoting safe driving along with Ambal Auto.
MDS not just imparts better driving skills but also tries to inculcate safe driving culture through
special theoretical sessions for behavioural training and road sense. The school was the first to
introduce advanced driving training simulator for better judgment and concept of route maps for
holistic on-road practice.

37
Having started from Bangalore in March 2005, Maruti Driving School has now spread its
network throughout the country. It is dedicated towards making Indian roads safer by helping
learners become smart and responsible motorists.

The salient features of MDS include:

 Professional and Trained faculty giving World Class Training.
 Course structured into theoretical and practical sessions.
 Lifelike simulators to give you confidence even before getting on road.
 Learn Comfortably with a fleet of AC cars.
 Women drivers get trained by Lady trainers.
 Behavioral conditioning for the right driving attitude.
 Modular Training structure lets you choose the most suitable option.
 Learn to handle minor repairs and maintenance of cars.
 Regular Evaluation for more focus on your weak areas.
 Passing out certificate for learning best driving practices and being a safe driver.

Training Institute 
Ambal Auto also runs a Maruti Training Centre to train work forces to maintain Maruti Cars.
This center caters to all in house training of both Sales and Service. It is well equipped with
modern amenities to meet the current challenges and demands of the automotive world. It is
equipped with an electronic library with 300 CDs, Cut sections of all the vehicle parts including
A/C and engine blocks. It has two A/C classrooms with OHP and multimedia projector, also has
Hostel and canteen facility for those who attend the training programs. The first of its kind in
Tamilnadu helps all Maruti authorized workshops & dealers to get well trained work force.
AMBAL INDUSTRIAL TRAINING CENTRE is a state of the art training centre for all the
below mentioned courses.
 AMBAL ITI (Affiliated by National Council for Vocational Training Affiliation
No.DGET-6/22/26/96-TC)

Admission open for the following courses:

38
 1. Mechanic Motor Vehicle (NCVT Approved)
Duration: 2 years
Eligibility: 10th Pass
 2. Automobile Mechanic (State Govt. Approved)
Duration: 1 year
Eligibility: 10th Pass/ Fail
 3. Auto Electrician (State Govt. Approved)
Duration: 1 year
Eligibility: 10th Pass/ Fail
 4. Two Wheeler & Four Wheeler Mechanic (State Govt. Approved)
Duration: 1 year
Eligibility: 8th pass
 5. Maruti Suzuki Servicing
Duration: 6 months
Eligibility: ITI/ Diploma/B.E
 6. Automobile A/C & Electronics
Duration: 45 days
Eligibility: ITI/ Diploma

Awards
→ 5 Times platinum award winning Dealer in Maruti Balance scorecard for Dealers, also enjoys
the reputation of being the first platinum dealer of Maruti
→ Sales Skill & Technical Skill Competition winners in regional & national level
→ 1st Dealer in the region to start Maruti true Value (Used Car Division)

→ 1st Dealer in the region to start Maruti Driving School

→ Always the first in all new business initiation of Maruti like Insurance, finance business

Its recognition gained through excellent performances- Regional Topper in Sales Satisfaction
Index for the Four Quarters in a row
2000 - 2001

39
Best Service Workshop 2000 - 2001
Highest Growth of Spare Parts 2000 - 2001
Best Service Performance Rank 2000 - 2001
Service Excellence
Best New Workshop
Best Performance in Spares - New Dealer

2001 - 2002
Branch Performance Award May 2002
2003 - 2004
Best Sales Satisfaction Index Score in the Region South 1.-Last Quarter - 2004
Best performing Maruti dealer in the Country on Balance Score Card Norms- Non Metros year
ending 2004.

2004 - 2005
Dealer with Maximum Growth Shown in Market Share. - 2004 - 2005
Customer Satisfaction Index All India winner- Ambal Erode-Non JD Power Cities. - 2004 - 2005
WINNER All India Technical skill Competition. - 2004 - 2005
Balance Score Card – All India Best Dealer – Non Metro Cities. - 2004 - 2005

2005 - 2006
Customer Satisfaction Index 2005 - 2006
1st runner up in All India Technical Skill Competition 2005 - 2006
Best Dealer in Exchange Sales Penetration 2005 - 2006
Best dealer in Rural Marketing efforts 2005 - 2006
Balance Score Card – Platinum dealer for third year in a row 2005 - 2006

40
 2.3 PRODUCT PROFILE
 Alto 800
In a bid to re-establish its long-standing supremacy in the entry-level hatchback space, Maruti re-
launched its bestselling hatch, the Alto in a new avatar and with a brand new name — the Alto
800. Endowed with a new features, improved interiors, a re-calibrated suspension, an
intelligently re-devised floor plan, fresh architecture, more space, 15 percent higher fuel

41
efficiency and a significantly potent engine, this modern reincarnation of the iconic 800 is a total
impresser, right from the word ‘go’. Available in seven variants – 4 petrol and 3 CNG, the
Maruti Alto 800 on road price in Coimbatore for the base variant is starting At Rs. 257,700. Visit
Ambal auto for New Alto 800 in Coimbatore to experience the new Alto 800 car.

 Ciaz
Its elegant design creates a superior aesthetic appeal while its aerodynamic style adds a stunning
effect to its looks. The Maruti Suzuki Ciaz truly sets the standards for the rest to aspire for. No
wonder when customers behind the wheel, the only thing ahead is an open road.

A LESSON IN DESIGN. A STUDY IN AESTHETICS:

Its elegant design creates a superior aesthetic appeal while its aerodynamic style adds a stunning
effect to its looks. The Maruti Suzuki Ciaz truly sets the standards for the rest to aspire for. No
wonder when you’re behind the wheel, the only thing ahead is an open road.

STEP INSIDE FOR SOPHISTICATED FEATURES:

Ciaz is equipped with highly advanced features like Camera Assisted Reverse Parking, Keyless
Push Start System and Smart Key. Along with that, intelligently designed features like Rear AC
Vents, Personal Reading Lamps and Rear Sunshade ensure complete comfort for the passengers.

Dzire
Maruti Suzuki DZIRE is hugely, hugely desired. With striking looks luxurious interiors, and
features to thrill customers heart.

Features by Variant
DIESEL
Maruti Suzuki DZire LDI
Maruti Suzuki DZire VDI
Maruti Suzuki DZire ZDI
PETROL

42
Maruti Suzuki DZire VXi LTD
Maruti Suzuki DZire LXI
Maruti Suzuki DZire ZXI
Maruti Suzuki DZire VXI

Eeco
Maruti Suzuki Eeco is designed to make this possibly by offering a fine blend of space, mileage,
power and comfort for passengers and their family.

Capacity
Seating Capacity: 5 Persons
Doors: 5 Doors
No of Seating Rows: 2 Rows
Fuel Tank Capacity: 40 litres
 Celerio
Easy drive
The revolutionary Auto Gear Shift and all new manual transmission of the Celerio have been
developed to offer a peppy and smooth drive. This next generation manual transmission reduces
mechanical losses and aids improvement in fuel economy in the car. The Auto Gear Shift and all
new manual transmission will ensure you get a Dil Uchhling experience as soon as you sit
behind the wheel.

Auto gear shift

The breakthrough EZ Drive technology is here to transform your driving experience forever.
Now no more changing gears or stressing about fuel bills.
The ease of an automatic, with the fuel economy of a manual
The revolutionary Auto Gear Shift gives you freedom to make every drive easy without having
to press the clutch pedal or change gears. It is based on an electronic control unit which drives
the precision hydraulic actuator to control the clutch engagement and the gear shifting. It also
ensures that the gear and clutch operations happen at optimal timings. This gives you the ease of
driving an automatic with the fuel efficiency of a manual transmission.

43
Easy technology
The Celerio’s advanced technology is designed to excite and give you the winning edge with K-
Next Engine and Drive-by-Wire technology. Right from ignition, you know you’re going to
experience a one-of-a-kind drive. All designed to make your Dil Uchhling. It also gives you the
best-in-class mileage.

K-next engine
The K-Next engine is better in every way. Apart from Flatter Engine Torque, it has Drive-by-
Wire technology resulting in peppier drive. Along with that, various improvements like
optimized compression ratio, reduced frictional losses, low viscosity engine oil and re-designed
valves and springs lead to better fuel efficiency. So now, you enjoy a faster throttle response,
better torque delivery and upon that class leading mileage too.
Drive-by-wire technology
An electronic throttle body gives you better torque delivery and more responsive drive besides
aiding higher fuel efficiency, making it one of the best hatchbacks out there.

Features by Variant
Petrol
 Maruti Suzuki Celerio Lxi M
 Maruti Suzuki Celerio Vxi M
 Maruti Suzuki Celerio Lxi AT
 Maruti Suzuki Celerio Zxi M
 Maruti Suzuki Celerio Vxi AT
 Maruti Suzuki Celerio Zxi Opt
Wagon-R
India's favourite car - WagonR with its astounding range of smart features is alos a pioneer in tall
boy design. With multiple fuel options like LPG, CNG and petrol, it's smart choice of millions.

44
Features by Variant
Petrol
 Maruti Suzuki Wagon R LX
 Maruti Suzuki Wagon R LXi
 Maruti Suzuki Wagon R VXi
 Maruti Suzuki Wagon R Vxi ABS

Maruti Suzuki Wagon R • Price, Variants & Specifications

The Maruti Wagon R was first launched in India in 1999. People, then, were not too enthusiastic
about the car, because of its awkward height. The Wagon R is the tallest hatchback in the
country, as a matter of fact. But the persistence of the company and the consistency of quality
did pay off and Maruti has developed the latest variant of the Wagon R now- it released on the
15th of January 2013. Maruti Suzuki has made a lot of changes to the interiors and the exteriors
of the car. The price of the car ranges between Rs 3,76,000 to Rs 4,58,000, depending on the
variant of the car that one purchases.

Engine & Performance

The Maruti Wagon R comes in a CNG variant and a petrol variant. The CNG variant is capable
of providing 15.5 km/kg within the city roads and around 20.2 kg/km on highways. The normal,
petrol engine variant of the car can provide an amazing mileage of 14.2 kmpl within the city
limits and around 18.9 kmpl on the highway. The car is packed with a KB10 1.0 l petrol engine
that comes with a displacement of 998 cc. This engine is quite lightweight. It can produce around
68 PS at 6200 rpm and generate a maximum torque of 90 Nm at 3200 rpm. The petrol engine
comes mated to a 5 speed transmission as well.The VXi variant is the ones that run on CNG fuel.
This engine runs on intelligent gas port injection (i- GPI) bi- fuel technology which provides for
a really smart, comfortable road. The car can generate 59.3 PS at 6200 rpm and 77 Nm of torque
at 3500 rpm. This engine variation won't just help a person save a lot of money it would also
restrict their carbon footprint.

45
Exteriors
If the Wagon R has been popular for one thing, it is the exteriors. The car has a really distinct
look- it can be easily spotted from far away. The car has a robust and sleek look and has a lot of
eye-catching features. The front grille of the car has chrome plating. The car's looks are
accentuated by the body colored ORVMs, bumpers and door handles as well. The car has
impressive looking roof rails, body moldings, crystal tail lights, etc. There have been significant
changes to how the car looks, especially in the latest variant of the car.

Interiors
The car actually has really impressive looking interior. The car looks incredibly classy from the
interior. The interior is roomy and provide enough space for five adults to sit comfortably (five
adults including the driver). The instrument panel of the new variant of Wagon R is definitely the
winner for it has wonderful chrome accents that make it look really sophisticated. The plush
upholstery, the dual tone effect, needle punch carpet, etc. make the car incredibly comfortable
and good looking as well. There are front and rear cabin lamps as well.
Features & Specifications
The car has a lot of utilitarian features including parcel tray, ticket holder on the driver's sun
visor, sun visor for the front passenger, adjustable front seats, adjustable head rests, vanity
mirror, etc. The car also provides for reclining and sliding flat front seats. There is dual zone air
conditioning which comes with heater and rotary air conditioning controls. The car has a lot of
security and safety features as well. This car comes with dual SRS airbag for the front
passengers. The anti lock braking system prevents the wheel from locking in case of abrupt
braking as well. The car also has driver seatbelt warning lamps, defogger, child proof rear door
locks, etc.
The Maruti Wagon R certainly looks better than it did when it released in 1999. It has also
become quite desirable thanks to the wide interiors, good fuel economy and affordable prices.
This is certainly a good family car.

Swift
Style reborn

46
More heads will turn. More stares will follow.
The new Swift has upped its style quotient. With an athletic yet elegant design, keeping intact its
unique design DNA.
• Electric Retractable ORVMs with Turn Indicators
• Stylish Alloy Wheels
• New Premium Upholstery
• Fluidic Aerodynamic Lines
• Wrap-around Premium Trims with Sporty Silver Accents
• Elegant Athletic Stance
• New Fog Lamp bezel

Comfort reborn
The New Swift's interiors have taken premiumness to a whole new level.
With a thoughtful design that makes every exciting drive comfortable too.
• Trendy Premium Interiors
• 60:40 Split Seat
• Push Start Button
• Multi-information LCD Display
• Audio System with Bluetooth Console
• Steering Mounted Illuminated Audio Controls
• Multiple Storage Space
• Additional Reading Light/Map Lamp
• Tilt Steering
• Super comfortable Deep-Bucket Front Seats
• Driver Seat Height Adjuster
• Automatic Climate Control

SAFETY REBORN
It's thrilling. It's exciting. And it's responsible.
The New Swift is loaded with safety features that makes your every ride worry-free.
• Superior Dual SRS Airbags

47
 • New-gen ABS with Motor Speed Regulation System
• Reverse Parking Sensor
• Boost Assist System (BAS) Braking

Features by Variant
Diesel
 Maruti Suzuki Swift VDi
 Maruti Suzuki Swift LDi
 Maruti Suzuki Swift ZDi
Petrol
 Maruti Suzuki Swift LXi
 Maruti Suzuki Swift VXi
 Maruti Suzuki Swift ZXi
 Maruti Suzuki Swift LXi(opt)

The OMNI
Story
Launched in 1985, the Maruti Suzuki Omni pioneered a segment in Indian automotive industry.
This versatile car comes with an option between an 8-seater and a 5-seater, and is available in 4
variants, which includes cargo and ambulance as well. It has gone a long way in serving the
consumers as a dual usage vehicle and helps its consumers in both personal as well as business
needs. With 15.7 million satisfied Omni customers placing it amongst the top selling cars in
India, this car with its high-roof, sliding doors, versatile space, and many more features add to
the unique charm that has been a favorite of many Indian households.
Over the years, Maruti Suzuki Omni has continued to grow from strength to strength on account
of its exceptional reliability and dependability. And because of this, it is hugely adored by its
customers. With Omni, one can truly say, "Kamyabi Khushiyon Se Sajaiye" .

Ertiga

48
The all new Ertiga is here is here to enhance your lifestyle. A powerful, responsive engine.
Advanced technology for better performance. Ergonomically designed 5 + 2 flexi - seating.
Stylish, happy interiors with high quality upholstery. All come together in a sporty body design
to create a new car category.

Features by Variant
Petrol
 Maruti Suzuki Ertiga LXi
 Maruti Suzuki Ertiga Vxi
 Maruti Suzuki Ertiga Vxi ABS
 Maruti Suzuki Ertiga ZXi (AL WL)
Diesel
 Maruti Suzuki Ertiga LDi
 Maruti Suzuki Ertiga ZDi ( STL WL )
 Maruti Suzuki Ertiga VDi
For a family of friends
Families are full of laughter, endless stories and mischief. And the Maruti Suzuki Ertiga is the
perfect family car for families who are friends. Spacious interiors combined with excellent
mileage and irresistible looks, Ertiga gives you even more reasons to be together.

A place to hangout
Open the doors to a world loved by the family of friends. Maruti Suzuki Ertiga is the car where
relationships prosper, a space that is designed to personalise the experience of a journey for each
family member, with myriad features.

A place to hangout
Open the doors to a world loved by the family of friends. Maruti Suzuki Ertiga is the car where
relationships prosper, a space that is designed to personalise the experience of a journey for each
family member, with myriad features.

49
Seating Comfort for the entire gang
Designed to carry 7 people in a 3-row layout, Maruti Suzuki Ertiga ensures no one is left behind.
The smart design of the Ertiga enables the creation of a cabin which offers comfort and space to
every passenger. The first-of-its-kind vehicle, with a long wheelbase, high headroom and careful
positioning of the seating, there’s ample space in every row. The versatility provided by different
passenger and luggage combinations make the Ertiga ideal for everything from a shopping spree
to a family road trip.

50
 CHAPTER III

DATA ANALYSIS AND INTREPRETATION

Table No: 3.1

Table showing sex of respondents

S.N NO OF PERCENTAGE OF
SEX
O RESPONDENTS RESPONDENTS
1 Male 86 86
2 Female 14 14
TOTAL 100 100

INTERPRETATION:

Above table shows that 86% of the respondents are belongs to male and 14% of the respondents
are belongs to female.

Thus the majority of the respondents are male.

51
 Chart No: 3.1

Chart showing sex of respondents

14%

Male
Female

86%

Table No: 3.2

Table showing age of the respondents

52
 NO OF PERCENTAGE OF
S.NO AGE
RESPONDENTS RESPONDENTS

1 18-25 28 28

2 26-35 7 7

3 36-45 41 41

4 Above 45 24 24

TOTAL 100 100

INTERPRETATION:
Above table shows that 28% of the respondents belong to below the age of 18- 25, 7% of
the respondents belong to the age group of 26-35, 41% of the respondents belong to the age
group of 36-45, 24% of the respondents belong to the age group of above the age of 45.
Thus the majority of respondents belong to the age group of 36-45.

Chart No: 3.2

Chart showing age of the respondents

53
 45 41
40
35
30 28
24
25
Percentage

20
15
10 7
5
0
18-25 26-35 36-45 Above 45
Age

TABLE – 3.3

54
 CLASSIFICATION OF EDUCATIONAL QUALIFICATION

S.NO Qualification No. of respondents Percentage

1 SSLC 12 12

2 HSS 18 18

3 Degree 20 20

4 Post Graduate 36 36

5 Others 14 14

Total 100 100

INTERPRETATION

The above table shows that 12% of the respondents have completed SSLC degree, 18%
of the respondents have completed HSS , 20% of the respondents have completed up to degree,
36% of the respondents have completed up to PG degree and 14% of the respondents are others.
Thus the majority of the respondents have completed PG.

CHART – 3.3

55
 CLASSIFICATION OF EDUCATIONAL QUALIFICATION

40 36
35
30
Percentage

25
20
20 18
14
15 12
10
5
0
SSLC HSS Degree Post Graduate Others
Qualification

TABLE – 3.4

56
 MONTHLY INCOME

S.NO Income No. of respondents Percentage

1 Below 10000 16 16

2 Rs.10001-20000 30 30

3 Rs.20001-30000 22 22

4 Above Rs.30000 32 32

Total 100 100

INTERPRETATION

The above table shows that 16% of the respondents’ monthly income is Rs. Below 10, 000, 30%
of the respondents’ monthly income is Rs. 10,001-20,000, 22% of the respondents’ monthly
income is Rs. 20,001-30,000 and 32% of the respondents’ monthly income is Rs. above 30,000 .
Thus the majority of the respondents’ monthly income is Rs. above 30,000.

CHART – 3.4

MONTHLY INCOME

57
 35 32
30
30

25 22
Percentage

20
16
15

10

0
Below 10000 Rs.10001-20000 Rs.20001-30000 Above Rs.30000
Income

Table No: 3.5

Table showing the car of the respondents

58
 NO OF PERCENTAGE OF
S.NO CAR
RESPONDENTS RESPONDENTS
1 Maruthi Swift 38 38
2 Mruthi Wagon’s 16 16
3 Maruthi Ritz 23 23
4 Maruthi Omini 20 20
5 Others 3 3
TOTAL 100 100

INTERPRETATION:

Above table shows that 38% of the respondents have Maruthi Swift , 16% of the respondents
have Mruthi Wagon’s, 23% of the respondents have Maruthi Ritz, 20% of the respondents have
Maruthi Omini and 3% of the respondents have other cars.

Thus the majority of the respondents have Maruthi Swift.

Chart No: 3.5

Chart showing the car of respondents

59
 40 38

35
30
25 23
Percentage

20
20 16
15
10
5 3

0
Maruthi Swift Mruthi Wagon’s Maruthi Ritz Maruthi Omini Others
Car

Table No: 3.6

Comparison with other cars

60
 NO OF PERCENTAGE OF
S.NO CAR
RESPONDENTS RESPONDENTS
1 Yes 82 82
2 No 18 18
TOTAL 100 100

INTERPRETATION:

Above table shows that 82% of the respondents said that they made a comparison and
18% of the respondents said that they did not make a comparison before buying this car.

Thus the majority of respondents said that they made a comparison before buying this
car.

Chart No: 3.6

Comparison with other cars

61
 18%

Yes
No

82%

Table No: 3.7

Table showing the purpose of using car

S.NO PURPOSE NO OF PERCENTAGE OF

62
 RESPONDENTS RESPONDENTS
1 Personal use 58 58
2 Lend to rent 40 40
3 Others 2 2
TOTAL 100 100

INTERPRETATION:

Above table shows that 58% of the respondents said that personal use, 40% of the respondents
said that lend to rent and 2% of the respondents said that other purpose as their purpose of using
their cars.

Thus the majority of respondents said that personal use as their purpose of using their cars.

Chart No: 3.7

Chart showing the reason for buying

63
 70
58
60

50
40
Percentage

40

30

20

10
2
0
Personal use Lend to rent Others
Purpose

64
 Table No: 3.8

Table showing the no. of cars

NO OF PERCENTAGE OF
S.NO
NO. OF CARS RESPONDENTS RESPONDENTS
1 One 45 45
2 Two 32 32
3 More than two 23 23
TOTAL 100 100

INTERPRETATION:

Above table shows that 45% of the respondents said that they have one car, 32% of the
respondents said that they have two cars, 23% of the respondents said that they have more than
two cars.

Thus the majority of respondents said that they have one car.

Chart No: 3.8

65
 Chart showing the no. of cars

50 45
45
40
35 32
Percentage

30
25 23
20
15
10
5
0
One Two More than two
No. Of cars

Table No: 3.9

66
 Table showing the reason for buying

NO OF PERCENTAGE OF
S.NO REASON FOR BUYING
RESPONDENTS RESPONDENTS
1 Brand Image 22 22
2 Quality 18 18
3 Style 37 37
4 Mileage 20 20
5 Others 3 3
TOTAL 100 100

INTERPRETATION:

Above table shows that 22% of the respondents said that brand image, 18% of the respondents
said that quality, 37% of the respondents said that style, 20% of the respondents said that mileage
and 3% of the respondents said that other reason as their reason to buy the model.

Thus the majority of respondents said that style as their reason to buy the model.

Chart No: 3.9

67
 Chart showing the reason for buying

40 37
35
30
Percentage

25 22
20
20 18

15
10
5 3

0
Brand Image Quality Style Mileage Others
Reason for buying

Table No: 3.10

Table showing the colour of car

68
 NO OF PERCENTAGE OF
S.NO COLOUR
RESPONDENTS RESPONDENTS
1 Black 35 35
2 White 23 23
3 Red 17 17
4 Metallic 10 10
5 Others 15 15
TOTAL 100 100

INTERPRETATION:

Above table shows that 35% of the respondents have black colour, 23% of the respondents have
white colour, 17% of the respondents have black red, 10% of the respondents have metallic
colour and 15% of the respondents have other colours.

Thus the majority of the respondents have black colour.

Chart No: 3.10

Chart showing the colour of car

69
 40
35
35
30
23
Percentage

25
20 17
15
15
10
10
5
0
Black White Red Metallic Others
Colour

Table No: 3.11

Table showing the preference in fuel engine

NO OF PERCENTAGE OF
S.NO PREFERNCE
RESPONDENTS RESPONDENTS

70
 Petrol
1 83 83

Diesel
2 14 14

Gas
3 3 3

TOTAL 100 100

INTERPRETATION:
Above table shows that 83% of the respondents prefer petrol engine, 14% of the
respondents prefer diesel engine and 3% of the respondents prefer gas engine.
Thus the majority of the respondents prefer petrol engine.

Chart No: 3.11

Chart showing the preference in fuel engine

71
 90 83
80
70
60
50
Percentage

40
30
20 14
10 3
0
Petrol Diesel Gas
Preference

72
 Table No: 3.12

Table showing the reason for buying in this showroom

NO OF PERCENTAGE OF
S.NO REASON
RESPONDENTS RESPONDENTS
1 On time delivery 37 37
2 Service 16 16
3 Nearest 20 20
4 Availability 27 27
TOTAL 100 100

INTERPRETATION:

Above table shows that 37% of the respondents said that on time delivery, 16% of the
respondents said that service, 20% of the respondents said that nearest and 27% of the
respondents said that availability as reason for buying in this showroom.

Thus the majority of the respondents said that on time delivery as reason for buying in this
showroom.

Chart No: 3.12

Chart showing the reason for buying in this showroom

73
 40 37
35
30 27
Percentage

25
20
20 16
15
10
5
0
On time delivery Service Nearest Availability
Reason

Table No: 3.13

74
 Table showing the way of knowing by the respondents

NO OF PERCENTAGE OF
S.NO WAY OF KNOWING
RESPONDENTS RESPONDENTS
1 Sales person 38 38
2 Friends/Relatives 40 40
3 Advertisements 11 11
4 Word of mouth 9 9
5 Other way 2 2
TOTAL 100 100

INTERPRETATION:

Above table shows that 38% of the respondents said that the way of knowing the showroom is
by sales person, 12% of the respondents said that the way of knowing the showroom is by
friends/relatives , 40% of the respondents said that the way of knowing the showroom is by
advertisements, 10% of the respondents said that the way of knowing the showroom is by word
of mouth and 12% of the respondents said that the way of knowing the showroom is by other
way.

Thus the majority of the respondents said that the way of knowing the showroom is by friends/
relatives.

Chart No: 3.13

Chart showing the way of knowing by the respondents

75
 45 38 40
40
35
30
Percentage

25
20
15 11 9
10
5 2
0

Other way
Sales person

Advertisements

Word of mouth
Friends/Relatives

Way of knowing

Table No: 3.14

Table showing the level of satisfaction with service provider

76
 LEVEL OF NO OF PERCENTAGE OF
S.NO
SATISFACTION RESPONDENTS RESPONDENTS
1 Satisfied 48 48
2 Highly satisfied 52 52
3 Dissatisfied 0 0
4 Highly dissatisfied 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 48% of the respondents said that satisfied, 52% of the respondents said
that highly satisfied, none of the respondents said that dissatisfied and none of the respondents
said that highly dissatisfied towards the level of satisfaction with service provider.

Thus the majority of the respondents said that highly satisfied towards the level of satisfaction
with service provider.

Chart No: 3.14

Chart showing the level of hospitality in workshop

77
 60
52
48
50

40
Percentage

30

20

10
0 0
0
Satisfied Highly satisfied Dissatisfied Highly dissatisfied
Level of satisfaction

Table No: 3.15

78
 Table showing the level of hospitality

NO OF PERCENTAGE OF
S.NO OPINION
RESPONDENTS RESPONDENTS
1 Satisfied 40 40
2 Highly satisfied 51 51
3 Dissatisfied 9 9
4 Highly dissatisfied 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 40% of the respondents said that satisfied, 51% of the respondents said
that highly satisfied, 9% of the respondents said that dissatisfied and none of the respondents
said that highly dissatisfied towards the level of hospitality.

Thus the majority of the respondents said that highly satisfied towards the level of hospitality.

Chart No: 3.15

Chart showing the level of hospitality

79
 60
51
50
40
40
Pecentage

30

20
9
10
0
0
Satisfied Highly satisfied Dissatisfied Highly dissatisfied
Opinion

Table No: 3.16

Table showing the level of cost of spare parts

80
 NO OF PERCENTAGE OF
S.NO OPINION
RESPONDENTS RESPONDENTS
1 Satisfied 38 38
2 Highly satisfied 52 52
3 Dissatisfied 10 10
4 Highly dissatisfied 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 38% of the respondents said that satisfied, 52% of the respondents said
that highly satisfied, 10% of the respondents said that dissatisfied and none of the respondents
said that highly dissatisfied towards the level of cost of spare parts.

Thus the majority of the respondents said that highly satisfied towards the level of cost of spare
parts.

Chart No: 3.16

Chart showing the level of cost of spare parts

81
 60
52
50
38
40
Percentage

30

20
10
10
0
0
Satisfied Highly satisfied Dissatisfied Highly dissatisfied
Opinion

Table No: 3.17

82
 Table showing the level of after sales service

NO OF PERCENTAGE OF
S.NO OPINION
RESPONDENTS RESPONDENTS
1 Satisfied 29 29
2 Highly satisfied 60 60
3 Dissatisfied 11 11
4 Highly dissatisfied 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 29% of the respondents said that satisfied, 60% of the respondents said
that highly satisfied, 11% of the respondents said that dissatisfied and none of the respondents
said that highly dissatisfied towards the level of after sales service.

Thus the majority of the respondents said that highly satisfied towards the level of after sales
service.

Chart No: 3.17

Chart showing the level of after sales service

83
 70
60
60

50
Percentage

40
29
30

20
11
10
0
0
Satisfied Highly satisfied Dissatisfied Highly dissatisfied
Opinion

Table No: 3.18

Expectation of offers
S.NO Offers NO OF PERCENTAGE OF

84
 RESPONDENTS RESPONDENTS
1 Yes 80 80
2 No 20 20
TOTAL 100 100

INTERPRETATION:

Above table shows that 80% of the respondents said that they are looking for offers and
20% of the respondents said that they are not looking for any offers from the company.

Thus the majority of respondents said that they are looking for offers from the company.

Chart No: 3.18

Expectation of offers

85
 20%

Yes
No

80%

Table No: 3.19

Table showing the level of convenient of timing of service station

S.NO OPINION NO OF PERCENTAGE OF

86
 RESPONDENTS RESPONDENTS
1 Very convenient 60 60
2 Convenient 25 25
3 Inconvenient 15 15
4 Very inconvenient 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 60% of the respondents said that very convenient, 25 % of the
respondents said that convenient, 15% of the respondents said that inconvenient and none of the
respondents said that very inconvenient regarding the timing of the service station.

Thus the majority of the respondents said that very convenient regarding the timing of the
service station.

Chart No: 3.19

Chart showing the level of convenient of timing of service station

87
 70
60
60

50
Percentage

40

30 25

20 15

10
0
0
Very convenient Convenient Inconvenient Very inconvenient
Opinion

Table No: 3.20

Table showing relationship with service provider

88
 NO OF PERCENTAGE OF
S.NO OPINION
RESPONDENTS RESPONDENTS
1 Excellent 62 62
2 Good 35 35
3 Fair 3 3
4 Poor 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 62% of the respondents said that excellent, 35% of the respondents said
that good, 3% of the respondents said that fair and none of the respondents said that poor
towards the relationship with service provider.

Thus the majority of the respondents said that excellent towards the relationship with service
provider.

Chart No: 3.20

Chart showing relationship with service provider

89
 70
62
60

50
Percentage

40 35

30

20

10 3
0
0
Excellent Good Fair Poor
Opinion

Table No: 3.21

Table showing expectation to get service done consequently

S.NO OPINION NO OF PERCENTAGE OF

90
 RESPONDENTS RESPONDENTS
1 Reasonable charges 20 20
2 Trust & care 10 10
3 Quality of service 45 45
4 Immediate delivery 25 25
TOTAL 100 100

INTERPRETATION:

Above table shows that 20% of the respondents said that reasonable charges, 10% of the
respondents said that trust & care, 45% of the respondents said that quality of service and 25% of
the respondents said that immediate delivery as their expectation from the show room.

Thus the majority of the respondents said that quality of service as their expectation from the
show room.

Chart No: 3.21

Chart showing expectation to get service done consequently

91
 50 45
45
40
35
Percentage

30 25
25 20
20
15 10
10
5
0
Reasonable Trust & care Quality of service Immediate delivery
charges
Opinion

Table No: 3.22

92
 Table showing about employee services

NO OF PERCENTAGE OF
S.NO OPINION
RESPONDENTS RESPONDENTS
1 Satisfied 45 45
2 Highly satisfied 50 50
3 Dissatisfied 5 5
4 Highly dissatisfied 0 0
TOTAL 100 100

INTERPRETATION:

Above table shows that 45% of the respondents said that satisfied, 50% of the respondents said
that highly satisfied, 5% of the respondents said that dissatisfied and none of the respondents said
that highly dissatisfied towards the employee services.

Thus the majority of the respondents said that highly satisfied about the employee services.

Chart No: 3.22

Chart showing about employee services

93
 60
50
50 45

40
Percentage

30

20

10 5
0
0
Satisfied Highly satisfied Dissatisfied Highly dissatisfied
Opinion

CHI SQUARE ANALYSIS

Table No: 3.23

94
Step1:
Null hypothesis (Ho):
Observed frequency
Level of satisfaction on the product
Age
Petrol Diesel Gas Total
18-25 20 7 28 28
26-35 5 1 7 7
36-45 35 6 41 41
Above 45 23 0 24 24
Total 83 14 3 100
There is no significance difference between the age of the respondents and preference in fuel
engine
Alternative hypothesis (H1):
There is some significance difference the age of the respondents and preference in fuel engine
Step 2:
Level of significance at 5%
Step 3:

Step 4:
Expected frequency

Row total x Columntotal

¿
Grand total

23.24 3.92 0.84

5.81 0.98 0.21
Total
34.03 5.74 1.23
19.92 3.36 0.72

Step 5:
O E (O-E) (O-E)2 (O-E)2/2
20 23.24 -3.24 10.4976 0.451704
7 3.92 3.08 9.4864 2.42
28 0.84 27.16 737.6656 878.1733

95
 5 5.81 -0.81 0.6561 0.112926
1 0.98 0.02 0.0004 0.000408
7 0.21 6.79 46.1041 219.5433
35 34.03 0.97 0.9409 0.027649
6 5.74 0.26 0.0676 0.011777
41 1.23 39.77 1581.653 1285.897
23 19.92 3.08 9.4864 0.476225
0 3.36 -3.36 11.2896 3.36
24 0.72 23.28 541.9584 752.72
100 100 - - 3143.194

Step 6:
Table value
Degrees of freedom =x (r-1) (c-1)
= (4-1) (3-1)
=6
Chi square value for 6= 1.635

Step 7:

Comparision

As tabulated value (1.635) is less than calculated value (3143.194), NHO is rejected and

NH1 is accepted.

RESULT:

It is clear from the above table that NHO is rejected and there is significant difference
between the age of the respondents and preference in fuel engine.

CHAPTER IV

4.1 FINDINGS

86% of the respondents are male.

96
41% of respondents belong to the age group of 36-45.

36% of the respondents have completed PG.

32% of the respondents’ monthly income is Rs. above 30,000.

38% of the respondents have Maruthi Swift.

82% of respondents said that they made a comparison before buying this car.

58% of respondents said that personal use as their purpose of using their cars.

45% of respondents said that they have one car.

37% of respondents said that style as their reason to buy the model.

35% of the respondents have black colour.

83% of the respondents prefer petrol engine.

37% of the respondents said that on time delivery as reason for buying in this showroom.

40% of the respondents said that the way of knowing the showroom is by friends/ relatives.

52% of the respondents said that highly satisfied towards the level of satisfaction with service

provider.

51% of the respondents said that highly satisfied towards the level of hospitality.

52% of the respondents said that highly satisfied towards the level of cost of spare parts.

60% of the respondents said that highly satisfied towards the level of after sales service.

80% of respondents said that they are looking for offers from the company.

60% of the respondents said that very convenient regarding the timing of the service station.

62% of the respondents said that excellent towards the relationship with service provider.

45% of the respondents said that quality of service as their expectation from the show room.

50% of the respondents said that highly satisfied about the employee services.

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4.2 SUGGESTIONS

98
 The company has to give more service and offers to their customers to fulfill their needs

towards increase the sale of cars.

 The company has to make arrangements to avail of all brands and range at all times as

their customers’ requirements.

 Employees of the company must give prompt service and kind attention to their prospect

customers.

 They should deliver the cars at promised time.

 Proper hospitality must be provided in order to retain the customers.

 Staff members must be given proper training to provide complete answers for enquiry of

their customers.

 To increase number of customers, the price of products should be reduced.

 All colour of the cars must be availed at all times to increase sales and prompt deklivery.

 Advertisement must be in websites and ensure to the customers to make order at online

effectively.

 Proper care must be taken to after sales service in order retain the existing customers.

99
 Various offers must be provided time to time to attract new customers.

 Interrelationships between showroom and customers must be improved to make them

loyal customers.

 The reliability should be maintained.

 Products should be supplied in time.

 Respond to requirements and services are to be improved.

 The concern may several steps to promote all types of cars which is produced by it

 The concern may concentrate on quality service

 After sales service must be provided by the concern in order to retain the customer

 It has to take necessary steps to provide the cars at promised time

 Company need to strengthen its distribution channel to increase availability and access

for the consumers .

CHAPTER V

5.1 CONCLUSION

100
 This study mainly aims at knowing the consumer behavior towards Ambal Auto Pvt Ltd.,
Namakkal. Most of the customers prefer the company for their prompt delivery and proximity.

The service provided by the company is the key factor for the success of the product as
well as the company in this industry Ambal Auto Pvt Ltd., has been able to make an impression
in the market by delivering high quality products and value added-services. The company has a
Service Activity Division supporting the customers and constantly monitoring the performance
of service in the company and taking corrective action.

The organization should also give importance to the suggestions and recommendations so
as to maintain support of present customers and to create new customers. Maruthi cars are a
popular vehicle in automobile market. No doubt that it is due to the satisfaction of the
customers. The company must try and develop new techniques to improve the standard of
vehicle to compete in this competitive world.

As it has a good market share in the market, the company has to take steps to keep up the

market share by conducting check up campaigns and educating the customer about the

maintenance of their four wheelers, so that they can reap maximum utility.

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