Name: Reena Liju Pozholiparambil

Roll No.: 17041823078

Batch: 1
MECO Supplementary Internals Assignment_Sem-1

Managerial Economics Project: Sedan Cars in India

1. Market Structure

a. No. of Buyers and Sellers:

BUYERS

While exact numbers of sedan buyers in India fluctuate year by year, sedans remain a popular
choice among various consumer segments for their blend of comfort, style, and practicality.
Buyers for sedan cars in India can be broadly categorized into several segments based on
their preferences, needs, and purchasing power. Here are the key buyer segments for sedan
cars in India:

1. Individual Consumers: Urban Middle-Class Families, Young Professionals, Corporate

Executives, Retirees and Senior Citizens.

2. Fleet Operators: Rental Companies and Corporate Fleets.

3. Government and Institutional Buyers: Government Agencies and Educational

Institutions.

4. Luxury Segment Buyers: Affluent Individuals.

5. Rural and Semi-Urban Buyers: Small Towns and Rural Areas.

6. Emerging Markets: First-Time Car Buyers.

Buyer Preferences and Considerations:

 Price Sensitivity: Price is a critical factor influencing purchase decisions across all
segments, with affordability being a key consideration.
 Features and Technology: Buyers prioritize safety features (ABS, airbags), comfort
(air conditioning, seating capacity), infotainment systems, fuel efficiency, and design
aesthetics.
 Name: Reena Liju Pozholiparambil
Roll No.: 17041823078
Batch: 1
MECO Supplementary Internals Assignment_Sem-1

 After-Sales Service and Maintenance: Availability of service centers, warranty

coverage, and maintenance costs play a crucial role in buyer satisfaction and brand
loyalty.
 Resale Value: Consideration of resale value and depreciation rates influence
purchasing decisions, particularly among individual buyers and fleet operators.

Understanding these buyer segments and their preferences helps automakers tailor their
offerings and marketing strategies to effectively target and cater to diverse consumer needs in
the sedan car market in India.

SELLERS

In India, several automobile manufacturers sell sedan cars across different segments, catering
to various consumer preferences and budget ranges. The sedan car market in India has seen
some consolidation and changes in recent years, with several automakers focusing on SUVs
and compact cars due to shifting consumer preferences. The number of active sedan sellers
currently includes major players like Maruti Suzuki, Hyundai, Honda, Toyota, Volkswagen,
Skoda, Tata Motors, and Nissan. Luxury and premium sedan sellers also contribute to the
market, catering to affluent consumers. The exact number may vary as automakers adjust
their product portfolios and market strategies in response to evolving market conditions and
consumer demands.

1. Maruti Suzuki: Popular Models: Maruti Dzire, Maruti Ciaz

2. Hyundai: Popular Models: Hyundai Verna, Hyundai Aura

3. Honda Cars India: Popular Models: Honda City, Honda Amaze

4. Toyota Kirloskar Motor: Popular Models: Toyota Camry

5. Volkswagen India: Popular Models: Volkswagen Virtus

6. Skoda Auto India: Popular Models: Skoda Slavia, Skoda Superb

7. Tata Motors: Popular Models: Tata Tigor

 Name: Reena Liju Pozholiparambil
Roll No.: 17041823078
Batch: 1
MECO Supplementary Internals Assignment_Sem-1

9. Nissan India: Popular Models: Nissan Sunny

Other Sellers:

 Luxury and premium sedan sellers include brands like Audi, BMW, Mercedes-Benz,
and Volvo, catering to affluent consumers seeking high-end features, performance,
and luxury.

The sedan car market in India is diverse, with several automakers competing across different
price points and consumer preferences. Each seller focuses on unique selling propositions
(USPs) such as design, technology, safety features, fuel efficiency, and after-sales service to
attract and retain sedan buyers in this competitive automotive market.

b. Product (Differentiated or Identical):

 Differentiated: Sedans in India exhibit significant product differentiation based on

design, features, performance, and brand image.

c. Examples of Prominent Firms and Market Share are mentioned in the table below:

No Sedan Name Apr-24 Apr-23 Diff Growth % % Market Share

YoY Apr-24
1 Maruti Dzire 15,825 10,132 5,693 56.19 52.42
2 Hyundai Aure 4,526 5,085 -559 -10.99 14.99
3 Tata Tigor/ EV 2,153 3,154 -1,001 -31.74 7.13
4 Honda Amaze 1,796 3,393 -1,597 -47.07 5.95
5 Hyundai Verna 1,571 4,001 -2,430 -60.73 5.20
6 Skoda Slavia 1,253 1,586 -333 -21.00 4.15
7 VW Virtus 1,183 1,481 -298 -20.12 3.92
8 Maruti Ciaz 867 1,017 -150 -14.75 2.87
9 Honda City 824 1,920 -1,096 -57.08 2.73
10 Toyota Camry 179 63 116 184.13 0.59
11 Skoda Superb 13 121 -108 -89.26 0.04
Total 30,190 31,953 -1,763 -5.52 100.00
 Name: Reena Liju Pozholiparambil
Roll No.: 17041823078
Batch: 1
MECO Supplementary Internals Assignment_Sem-1

2. Demand Curve Faced by Producers (producer’s behaviour):

 The demand curve for Maruti Dzire and other sedans in India slopes downwards,
indicating that as prices increase, the quantity demanded decreases. Producers adjust
pricing and features based on consumer preferences and competitive dynamics.

3. Factors Determining Consumer Demand (consumer’s behaviour):

 Price: Affordability is critical; consumers often compare prices and value-for-money

propositions.
 Brand Reputation: Reliability, service network, and brand loyalty influence
consumer choices.
 Features: Advanced safety features, technology (infotainment, connectivity), and fuel
efficiency are crucial.
 Design and Comfort: Styling, interior space, and comfort features play significant
roles.
 Fuel Efficiency: Given rising fuel costs, fuel efficiency is a primary consideration.

4. Industry Rivalry

a. Numerous Companies operate in the Business segments: Multiple players compete

fiercely in the sedan segment, driving innovation and competitiveness. Ref the table in
page 3 and seller on page 2.

b. Product/Service Differential: Differentiation through design, features (safety,

connectivity), and performance variants.

c. Price Leadership: Market leaders like Maruti Suzuki set benchmarks, influencing
pricing strategies.

d. Switching cost for customers from competition: Moderate switching costs exist due
to brand loyalty, service network preferences, and familiarity.
 Name: Reena Liju Pozholiparambil
Roll No.: 17041823078
Batch: 1
MECO Supplementary Internals Assignment_Sem-1

5. Threat of Substitutes and Risk of New Entrants

 Substitutes: Alternatives include SUVs, hatchbacks, electric vehicles (EVs), and

public transportation.
 New Entrants: High barriers due to capital requirements, established brand loyalty,
and regulatory compliance. EV startups pose potential disruption.

6. Bargaining Power of Buyers

 High: Buyers have significant bargaining power due to the availability of choices,
promotions, and discounts. Price sensitivity drives decision-making.

7. Bargaining Power of Suppliers

 Moderate to High: Suppliers of critical components (engines, electronics) wield

bargaining power due to specialized nature and limited alternatives.

8. Market Failure and Government Intervention

 Government Intervention: Regulations on emissions (BS6 norms), safety standards

(BNVSAP), and incentives for electric vehicles (FAME India) impact industry
practices.
 Market Failures: Issues include information asymmetry (consumer awareness about
vehicle safety, emissions), externalities (environmental impact), and market
concentration.

In summary, the sedan car market in India, including Maruti Dzire, is characterized by
intense competition, evolving consumer preferences, technological advancements, and
regulatory influences. Understanding these dynamics is crucial for stakeholders to navigate
challenges and capitalize on growth opportunities in this dynamic sector.

Reference:

The Markert Share Table info taken from: https://www.rushlane.com/top-10-sedans-

april-2024-dzire-amaze-city-verna-slavia-virtus-12496312.html