A u to m o b i e se cto r l
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 ti n - A u to m o b i e o l se cto r
T h i p ri o f A l LX d e l b e ra te l ke p t i th e ra n g e b e tw e e n s ce to i y n th e p ri o f M a ru ti8 0 0 a n d Z e n . ce
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 1520 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.