Maruti 800 Market Situations

Economics

Term Project

Maruti 800 – Present Market Situation and Future Prospects

INTRODUCTION

The automobile industry has an enormous opportunity for creating new wealth by delivering value to the world and by delivering value to the domestic user. The automobile industry also has the opportunity to contribute in equitable distribution of the wealth so created. Globalisation and the convergence of information and communications are leading to unbundling of design, engineering, component manufacture and assembly operations. India can take advantage of this global unbundling trend. The Indian automobile component industry is emerging as a world-class outsourcing destination for global auto majors. The Indian automobile industry is fully equipped to deliver compelling value to the world in design, engineering and component manufacture. India can also bridge the growing global divide in personal transportation. And, in this process, it would create the basis for a new wealth creation opportunity. India is among few countries that are showing a growth rate of 30% in demand for passenger cars. Rural markets are on the verge of opening up. India’s private vehicle ownership is just 6 per 1000 as against 463 per 1000in USA. The home market for the automobile industry is also growing. This will sustain India’s competitiveness in serving other developing markets. Growth in per capita will power the growth of motor vehicle sales. So would the increasing level of urbanisation. In the four metro cities, personalised vehicles already form nearly 83 percent of all vehicles on the roads. By 2020 more than half of India’s population is expected to live in urban areas.

All this will bring about a dramatic growth in demand.

INDUSTRY SPECIFIC PROBLEMS

Disposable income was perceived as the key factor driving passenger car demand. But over time, other factors included the need for greater mobility, non-availability of public transport services, availability of cheap finance, development of the used-car market, introduction of new technologically superior models, increasing levels of urbanisation, and changing consumer profiles.

RESEARCH GAP

1. The best fit line found out by the regression analysis cannot be entirely trusted as data was available for a period of seven years.

2. For simplicity, the demand is taken to be dependent only on the price of the product and the per capita income of the consumer. The factors like the taste and preferences