Pricing-Automobile Sector
Alyn Varghese
Bhumika Vagrecha
Dharmesh Mehta
Sainatth Wagh
Sneha Samuel
Vrishali Sinha
A u to m o b ile se cto r
It is one of the core sectors of Indian economy.
the advent of new business and manufacturing
practices in the light of liberalization and
globalization.
Competition has changed the sector.
Entry of new foriegn players.
Indian Automobile sector is growing at 18% per
annum.
C o n td …
Country's passenger car sales grew 22%, the
highest growth rate in current financial
year.
Passenger car and motorcycle segment is
set to grow by 8-9%.
The production of passenger cars in India is
expected to grow to over 14 million units in
2014-2015
The sales are expected to increase at a rate
of 10% per annum.
In February 2009, monthly sales of
passenger cars in India exceeded 100,000
units.
S e g m e n ta tio n - A u to m o b ile
se cto r
M a rke t S h a re
Four Wheeler Segments :
Key Players :
Notable Indian automobile
manufacturers
Ashok Leyland
Mahindra: Major, Xylo, Scorpio.
Maruti Suzuki: 800, Alto, WagonR, Estilo, AStar,
Ritz, Swift, Swift DZire, SX4, Omni, Versa,
Gypsy
Tata Motors: Nano, Indica, Indigo, Sumo, Safari,
TL.
Electric car companies in India
Ajanta Group
Mahindra
Hero Electric
REVA
Locally manufactured Automobiles of
Multi - national Companies
Audi: A4, A6.
BMW: 3 Series, 5 Series.
Chevrolet: Spark, Aveo U-VA, Aveo, Optra, Cruze,
Tavera.
Fiat: Palio, Grande Punto, Linea.
Ford: Ikon, Fiesta, Fusion, Endeavour
Honda: Jazz, City, Civic, Accord.
Hyundai: Santro, i10, Getz, i20, Accent, Verna, Sonata.
Mercedes-Benz: C-Class, E-Class
Mitsubishi: Lancer, Lancer Cedia.
Renault: Logan
Škoda: Fabia, Octavia, Laura.
Toyota: Corolla, Innova, Fortuner
Volkswagen: Jetta, Passat.
Psych o lo g ica lPricin g
Maruti 800 — Rs . 2 , 37 , 898 /- Alto LX — Rs . 2 , 99 , 000 /-
T h is p rice o f A lto LX d e lib e ra te ly ke p t in th e ra n g e b e tw e e n
th e p rice o f M a ru ti8 0 0 a n d Z e n .
Maruti Zen --- Rs . 3 , 24 , 103 /-/-
Discriminatory Pricing
Honda City
Same car sold at different prices based on their
geographical locations .
E.g.: Cars in Delhi, Haryana and Chandigarh are much cheaper than other Indian cities.
This is because of two critical factors :
1.Insurance rates
2.Road Tax
Price Wars
Hyundai Santro Ford Fiesta
Started when the carmakers in India slashed the prices to sustain
their sales in the market.
Hyundai Santro started selling its car at its 1998 launch price of
2,99,000 down from the regular price of 3,33,000
As a result Ford’s Indian Unit had to cut its price by upto Rs.91000.
Because of this price war, Toyota Kirloskar had to put the launch of
their Prius Hybrid on hold.
Pricing Method:
Target Return Pricing:
Target pricing is used by general motors,
which price its automobiles to achieve a 15-
20 percent ROI.
The target pricing method is used most often
by public utilities, like electric and gas
companies, and companies whose capital
investment is high, like automobile
manufacturers.
Premium pricing:
It is a strategy by which prices are set distinctly
higher than average to reflect better product
quality, exclusivity or status.
E.g. Mercedes-Benz, Ferrari, Audi, Bentley,
Porsche.
Perceived Value Pricing:
It is a market-based approach to pricing
wherein the price is set by estimating what
the perceptions of potential consumers are
regarding the value of the product.
Market research is a very important component
of this type of pricing.
Honda Jazz
Tying:
It is the practice of making the sale of one
good (the tying well) to the customer
conditional on the purchase of a second
distinctive good (the tied good).
Vertical tying is the practice of requiring
customers to purchase related products or
services from the same company.
For example, a Hyundai car can only be
serviced by its dealers.
Discount Pricing
Chevrolet Spark
It is a pricing method which is generally offered during the
festive seasons or during special occasions.
E.g.: General Motors offered a massive discount available on
Chevrolet Spark during Diwali. It was being offered at a starting
price of Rs 2.79 lakh.
Penetration Pricing
TATA Nano
It is a pricing method whereby the organisation sets a low price to
increase sales and market share.
E.g.Nano which is priced at around one lakh is a prime example of
penetration pricing.
Aims at gaining high market share.
Product Line Pricing:
Optional Feature Pricing:
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