02-02-2013, 09:56 AM
FACTORS AFFECTING FOUR WHEELER INDUSTRIES OF INDIAN MARKET
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Abstract
Indian automobile industry embarked on a new journey in 1991 with subsequent opening up for 100 percent FDI through automatic route. In view of this, the survey attempts to estimate the economic performance of Indian automobile industry in terms of capacity utilization at an aggregate level. It estimates econometrically rate of capacity utilization in the industry at aggregate level and analyses its trend during the post liberalization period,1991-92 to2005-06.The survey also tries to assess the impact of various factors influencing capacity utilization. In this research, optimal output is defined as the minimum point on the firm’s short run average total cost curve and the rate of capacity utilization is merely ratio of its actual output to capacity output level. We use an econometric model to determine the optimal capacity output. The result shows that capacity utilization has been improved after the path breaking economic reforms initiated in 1991 at the rate of around 5 percent per annum but capacity grows more rapidly than output growth. In view of identifying several factors that influence 4-wheeler utilization, result suggests that coefficient of export-intensity variable, import penetration ratio are negative which indicate that capacity utilization was relatively lower in firms belonging to industry characterized by high export-intensity and import penetration. A positive relationship is found between size and capacity utilization and similarly between market share and capacity utilization.
Introduction
Indian automobile industry went aboard on a new journey in 1991 with delicensing of the 4-wheeler sector and subsequent opening up for 100 percent FDI through automatic route. Since then ,almost all the global majors have set up their facilities in India taking the level of production from 2 million in 1991 to 9.7 million in 2006[SIAM,2007-08].The growth of Indian middle class with increasing purchasing power along with strong growth of economy over a past few years have attracted the major auto manufacturers to Indian market. Increase in income level, decline in tax and interest rates have helped to increase in personal disposable income .Change in mindset leading to changing investment / spending pattern from two wheeler investment to increasing consumerism,explosive growth in communication have led to urbanization of rural consumers attitude and has increased the propensity to purchase 4-wheelers.Therefore, increased disposable income and fast changing spending habits have led to the increased consumerism of automobiles product for human comfort.
The market linked exchange rate and availability of different models at competitive cost have further added to the attraction to Indian automobile market. The automotive sector is one of the core industries of the Indian economy. Indian Government’s impatience to the industry by allowing continuous economic liberalization since 1991 has made India one of the sought after destination for many global automotive players. The automotive sector in India is growing at around 18 per cent per annum.
OBJECTIVES
• The objective of this research is to analyse that how many people are aware about 4-wheeler sector. If they are aware about automobile sector then why they should prefer the particular brands like HONDA,MERCEDES,MARUTI etc.
• We have tried to study what are the factors which still attract the consumers to this sector that is the most choosable sector despite of the huge investment in and the grand ambience and multiple options provided by the organized industries.
• And also to study the status of types of marketing affluence factors.
HYPOTHESIS & ASSUMPTIONS
In the present scenario the Indian economy is on boom that is why many buyers wants to invest their money in India from other countries also like RENAULT etc.
• There is lack of information about automobile CRM strategies.
• People don’t know about what kind of options and of which brand the 4-wheelers are providing to them.
• Lack of authentic knowledge about difference in organized and unorganized brands of automobiles.