Korean automaker plans to enter the Indian passenger car market, aiming for 5% market share within four years. The Indian car market has grown significantly since liberalization in the 1990s. Passenger vehicle sales are expected to nearly triple by 2020, driven by rising incomes, a young population, greater financing options, and government support for manufacturing. As a new entrant, the automaker should initially focus on the passenger car segment priced between 2-5 lakh rupees, and CNG vehicles, which are expected to grow. Challenges will include developing brand recognition and a dealer network in India. A marketing strategy should create hype around new models and educate customers about quality, service, financing options and value.

1. Korean Automobile Giant
Case Study

2. Case Summary
Planning to enter Indian passenger car segment
Target – 5% market share in next four years
 Which four wheeler segment ?
Right from the commissioning - achieving customer delight and
the organisation’s goals

3. Market Background
 Till 1980, Indian passenger car market was dominated by two players
- Ambassador, Hindustan Motors
- Fiat Padmini
 The Government also controlled the design & make of the cars. It had following impact
on the Indian Auto market
-Low CAGR (3.5%)
 Owning a car remained a distant reality for the common man
 In 1980, GOI allowed a JV between Maruti & Suzuki to manufacture cars in India
which resulted in a 18.6% CAGR for the next decade
 In 1993 GOI de-licensed the auto industry, making way for new players in the industry

4. Expected growth of Indian market
 Passenger vehicle sales to nearly triple by 2020
 Passenger vehicle sales to increase from 3.2 million in
FY2013 to 9.0 million in FY2020
0
2
4
6
8
10
Passenger Vehicle
3.2
5
9 2013
2015
2020

5. Rising income, young population
Greater availability of credit and financing options
Growing Demand

6. Policy support
Goal of making India a hub for small car, MUV, Two & three
wheelers, tractors and components
Policy sops, FDI encouragement
R&D focus; GOI has set up a technology modernisation fund

7. Innovation and Rising investments
Rising investments from domestic and foreign players
Demand projected to remain strong, making returns attractive
Greater product innovation; market segmentation
Tata Nano and the upcoming Pixel have opened up the potentially
large ultra low-cost car segment.
Innovation is likely to intensify among engine technology and
alternative fuels.

8. Advantage India
Growing
Demand
Inviting
Policy
support
Welcomes
fresh
investment
and new
technology

9. Notable trend in Indian Automobile sector
New product
launches
• Large number of products - across various segments - entry of a number of
foreign players
• Reduced product lifecycle - quick product launches
Improving
product-
development
capabilities
• Increasing R&D investments
• Innovation has been a key – example: Tata Nano and Tata Pixel; -former is
successful in India, - latter is intended for foreign markets
Alternative
fuels
• CNG cars and taxis are expected to grow at a CAGR of 10.64 % over the period
2012-16
• The CNG distribution network in India is expected to increase to 250 cities by
2018
New
financing
options
• Carmakers such as BMW, Audi, Toyota, Skoda, Volkswagen and Mercedes-
Benz have started providing customised finance to customers through NBFCs
• Major MNC and Indian corporate houses are moving towards taking cars on
operating lease instead of buying them

10. Segmentation based on price
http://www.authorstream.com/Presentation/vikasindian001-643311-passenger-car/

11. Passenger vehicles Segment
Passenger
vehicles
Passenger
cars
Utility
vehicles
Multi-
purpose
vehicles

12. Which four wheeler segment ?
As a new entrant, in market condition like India it is ideal
to concentrate on passenger car with price range of 2lakh
to 5lakh as base.
And also on CNG cars. It seems to have healthy market
in near future.

13. Challenges to face
I. To ensure that Indian consumers develop a positive association
with Korean car makers.
I. To develop a corporate image.
Since cars are high involvement product, customers will make a choice
looking on the maker, service support, spares availability
III. About the design
IV. The grip of Maruti and other competitor on the Indian car
market.

14. Strategies at the time of Launch
Three sided approach
 Educate the customer about the corporate’s image
 Create hype and expectations about New Segment Car
 Explain the virtues of New Segment Car
Market Survey

15. Marketing strategy
Marketing Strategy :
• To develop a positive association with Indian consumers
• To develop the brand image for Korean car
• To reposition the brand
• Focused on developing a strong distribution chain in India
• Advertisement through various media like TV, News
paper, websites, mobile apps etc.
With celebrities as a brand ambassador

16. Achieving customer delight and the organisation’s goals
Exhaustive study and matching the needs and expectations of the
customer.
Special offers for target area -
Extended credit period, Free electronic accessories , Free fuel
vouchers etc
Conducting/sponsoring Cultural and Social events, and Medical
Camp - Helps to build brand image
Tie-up with private banks for easy financing of cars

17. Conclusion
Quality of product and service – Value for money
Availability of spares and Authorised Service centres
Innovation and new technology

18. Thank you