Consumar Behaviour in Small Car Market

The Indian passenger car industry had a sheltered existence till the early 80’s. Until 1981, there were two dominant players in the Indian scene – Hindustan Motors and Premier Automobiles. In 1982, Maruti Udyog, a 50:50 joint venture between Suzuki Motors and the Indian Government introduced a hatch back car at an affordable price. Gradually, Maruti introduced different new models creating different segments and overtook HM and PAL with attractive prices and fresh designs.

Within a short span of time, MUL occupied number one position in the car market. In the mean time, the opening up of the economy in 1991 attracted several multi-national companies. Besides this, some domestic majors also entered into the passenger car market. As a result, India has become one of the fastest growing car markets in the world. In fact, it holds a promising ninth position in the entire world and growing with a cumulative annual growth rate (CAGR) of about 14 percent, ready to surpass many developed markets.

Today, almost every major car maker of the world is present in India where Maruti Suzuki is the market leader with over 50 percent market share. It is to be noted that in the car market, there are three major segments, out of which small car segment constitutes almost 81 percent of the Indian passenger car industry. It shows that there is immense growth potential to small cars and the future growth looks very promising due to various factors and forces. Some of them are low penetration, good economic growth, buoyant rural markets, growing middle class, poor public transport system and fuel efficiency of small cars.


The major players in the small car market are Maruti, Hyundai, Tata, Fiat, GM Honda, Skoda etc. Among these major players, Maruti is the leader with more than 50% market share with its brands Like-A-Star, Ritz, Wagon R. Even Hyundai’s models such as i10 and i20 have made good presence in the market.

Further a slew of new models from Tata, Fiat and GM Honda have made significant inroads into the small car market. In short, potential buyers have a wider choice than ever before. But before buying a car, potential buyers, consider various attributes like aesthetic looks, comfortability &convenience, mileage, safety, availability of spares & services, price, the reputation of manufacturers, consumer financing, value for money, value for image etc.

Besides this, they discuss their plans with friends, colleagues, relatives, dealers, mechanics etc. Some times, they test drive the cars also to know the performance of the latter. All the same, they may watch advertising programs on the TV that focus on cars. In this way, a number of factors, influence the behavior of car buyers. But buyers buy those cars in which they find value for money or value for image. In view of the above facts, a study may be carried out on the proposed research topic – Buyer Behavior in the Small Car Market (A Case study of Vijayawada City, Krishna District, AP.) OBJECTIVES

❖ To study the car industry in India and also to know the place of small cars in the car industry.

❖ To know the reasons for buying cars and also to find out what triggered or prompted people to buy cars.

❖ To know how the targeting and positioning strategies of companies influenced buyers to buy a particular small car.

❖ To find out the various attributes of cars considered by people and also to know the attributes that appealed most to people and the resultant preference of cars.

❖ To determine the influence of personal and promotional factors on car buyers and to give appropriate suggestions to the carmakers.


The following methodology will be adopted to carry out the present study – Buyer Behavior in the Small Car market (A Case Study of Vijayawada City, A.P). Both primary data and secondary data will be used to carry out the study. It is to be mentioned here that primary data will be collected with the help of questionnaire’s, which will be designed and developed in this regard. The questionnaires will be administered to all the sample respondents, to elicit the required information. Primary data will be supplemented by secondary data, which will be collected from various books, business magazines, journals etc.


Any practical research that deals with people need sample survey. It is nothing but selecting sample respondents from the whole population. In this regard, a sample of 250 small car owners will be selected and interviewed in Vijayawada City only. In the present study, random sampling technique will be used to collect the opinions of sample respondents.


• Car makers which employ sound targeting and positioning strategies shall have competitive advantage leading to their improved performance and vice versa. The truthfulness of this hypothesis will be known.

• Buyers buy those small cars in which they find value for money and also attribute mix that appeals to them. This hypothesis will also be tested.


❖ The first chapter is related to the conceptual framework of the research topic understudy.

❖ The second chapter deals with the research methodology, which includes introduction, objectives, review of literature, methodology, etc.

❖ The third chapter examines the car industry scenario as well as the profile of small car majors in the market.

❖ The fourth chapter analyses and interprets primary data.

❖ The fifth chapter is concluded with findings and suggestions.


– Product Management – Mazumdar.

– Marketing Management – Ramaswamy & Namakumari.

– Books on Brand Management

– The Hindu survey of Indian Industry from 1990-91 to 2010-2011.

– Auto India

– Business news papers like – Economic times, Business Line etc