Last Updated 20 Jun 2022

Consumer Decision Making in Automobile Industry

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Demand in Automobile, FMC and retail is growing at a faster pace than anticipated due to rise in its consumption patterns which is creating demand and margins for Indian Inc. India is the second-largest producer of two-wheelers in the world. In the last few years, the Indian two-wheeler industry has seen spectacular growth. The country stands next to China and Japan in terms of production and sales respectively. The present scenario of especially decision making process of purchasing vehicles, and its importance, current trends are highlighted. In this article study for the emend of vehicles and influencing factors like family, friends, dealers, service and mileage for the process of purchasing vehicles is done.

Automobile Industry

The automobile industry is one of the fastest-growing industries of the world. With more than 2 million new automobiles rolling out each year, on roads of India, the industry is set to grow further. The automobile industry made its silent entry in India in the nineteenth century. Since the launch of the first car in 1897, Indian automobile industry has come a long way.

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Today India is the largest three-wheeler market in the oral and is expected to take over China as the second-largest automobile Industry in the coming year. Indian automobile industry; manufacturing cars, buses, three-wheelers, two-wheelers, commercial vehicles, heavy vehicles, provides employment to a large workforce. The abolition of license raja in 1991 opened the doors for international automobile manufacturers. A number of leading global automotive companies entered into Joint ventures with domestic manufacturers of India and thus started the large-scale production of automobiles in India.

Some of the well- now players of the Indian automobile industry include Hindustan Motors, Marti Dogs, Fiat India Private Ltd, Ford India Ltd. , General Motors India Pet. Ltd, Toyota Karakas Motor Ltd among others. The production of automobiles in India is mainly for domestic customers. Cars with 79% of automobiles in India, dominate the automobile industry in India. The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1. 5 million every year. The dominant products of the industry are two-wheelers with a market share of over 75% and passenger cars with a market share of about 16%.

Commercial vehicles and three heelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USED 35 billion and provides direct and indirect employment to over 13 million people. Some facts on the Automobile industry in India: India has the fourth largest car market in the world India has the largest three-wheeler market in India India is the second-largest producer of two-wheelers in the world India ranks fifth in the production of commercial vehicles. Hounded Motors ranks second in car production in the world.

Consumer Decision Making Process

"Consumer behavior describes how consumers make purchase decisions and how they use and dispose of the purchase goods or services" therefore we can understand the importance of consumer behavior for a marketer and as a vital process during the decision purchase process. A marketer needs to identify who their consumers are in order to be capable of selling their products, generate revenue and profitability but also to be able to satisfy them for future purposes such as market share through recognition, and only once identifying their consumer"s behavior can succeed be achieved. In relation to purchasing a car why would it be essential for a marketer to be able to understand its consumer's behavior in order to target them more effectively, this is mainly due to the fact of the car industry having a wide range of variety"s that car manufactures offer its consumers making it competitive.

Consumer Buying Behavior: Problem Recognition

In this information processing model, the consumer buying process begins when the buyer recognizes a problem or need. When we found out a difference between the actual state and a desired state, a problem is recognized. When we find a problem, we usually try to solve the problem. We, in other words, recognize the need to solve the problem. Information Search: When a consumer discovers a problem, he/she is likely to search for more information . We actively seek information by visiting stores, talking to friends, or reading magazines, among others. Through gathering information, the consumer learns more about some brands that compete in the market and their features and characteristics.

Evaluation and Selection of Alternatives

How does the consumer process competitive brand information and evaluate the value of the brands? Under this, a consumer is trying to solve the problem and ultimately satisfying his/her need. In other words, he/ she will look for problem-solving benefits from the product. The consumer, then, looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees each product as a bundle of attributes with different levels of ability to deliver the problem-solving benefits to satisfy his/her need. Decision Implementation: To actually implement the purchase decision, however, a consumer needs to select both specific items (brands) and specific outlets (where to ay) to resolve the problems.

Once the brand and outlet have been decided, the Post-purchase Evaluation: "Did I make the right choice? Should I have gone with another brand? " This is a common reaction after making a difficult, complex, relatively permanent decision. This type of doubt and anxiety is referred to as post-purchase Evaluation.

The Objective of the Study

To study the consumer decision making process of consumers. To identify the factors influencing consumers, in brand selection while purchasing the automobile. To identify the consumer"s choice of preference while purchasing the automobile.  Sings (1981) conducted a survey on A study of brand loyalty in India". The primary objective of this study was to examine the state of art regarding brand loyalty among consumers in India. Mishear Mohamed N. (1997) examined the factors determining purchase and post-purchase behavior of two-wheeler users. His findings revealed that friends and neighbors' form the most important source which is followed by one"s own experience, family members, newspapers and observation. Parker and Anderson (1994) examined the consumer"s preferential expectation nickering attributes, the objects and their post-trial perception of the attributes.

The findings suggested that differences did exist among individuals in terms of the appropriateness of various preference models. Argue Chowder (2006) has remarked that brand commitment is an important determinant in buying behavior for consumers. Rachel Diarist and Harrisonburg-Fearer (1994) have investigated the rapport between automobile attributes and household characteristics to consumer preferences for cars. The analysis was confined to households that purchased new cars in 1986 and employed outages profit analysis.

Results indicated that the coefficients of most household characteristics were not significant. Households were interested in more fuel efficient and heavier cars as well as cars with lower depreciation rates and a lower frequency of repair are more likely to buy Japanese than non-Japanese cars. Gary A. Knight (1984) has compared the consumer preferences on automobile made abroad and made in the home country by both home country and foreign firms. Indeed he has suggested that the country of manufacture and product quality strongly influence consumer decision making in globally available product categories.


A survey method was used to collect the primary data from the respondents. A structured questionnaire was prepared to extract responses from the respondents. The study was conducted on a sample of 96 consumers. Secondary Data: Secondary data was collected from books, articles, the Internet and previous research papers that had been conducted by the company representatives and officials.

Respondent Profile Age group: 45% below the age of 30 years.

Education: 50% of the respondents were educated up to SC.

Occupation: Agriculture (4%), private service (70%), small businessmen (24), others 2%).

Consumer Decision Making in Automobile Industry essay

Related Questions

on Consumer Decision Making in Automobile Industry

Why is it important for car manufacturers to measure market perception?

It is the market perception that determines the success of a company and so it is very important for the car manufacturers to measure the “willingness of existing users of a product to recommend it to others”. The same is a lot of interest to customers as well for it helps them make the purchase decision.

Why is car buying behaviour a complex one?

This buying behaviour is a complex one because it involves a high amount of involvement due to the fact of their being a wide range of car brands to buy from which meet the needs of different characteristics of a consumers.

What should the car manufacturer expect from its customers?

If the customer rates the car very high in satisfying his or her needs, the car manufacturer should expect more referrals and this is reflected in the analysis that 73% customers says that they will refer their friends even if they move to other segment or other brand. Q5. Will you buy your new car in the 1. Same segment, same manufacturer 2.

What is consumer behaviour and why is it important?

“Consumer behaviour describes how consumers make purchase decisions and how they use and dispose of the purchase goods or services” (Lamb, 2009. p140), therefore we can understand the importance of consumer behaviour for a marketer and as a vital process during the decision purchase process.

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