Market Segmentation for Automobiles

Market segmentation for automobiles In today’s times, the automobile sector is robust with growth and more and more players are entering the automobile industry. The meaning of market segmentation was discussed in the last post and here an attempt has been made to get an overview of the market segmentation of automobiles. 

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Geographic segmentation Geographical segmentation is one of the most important basis of segmentation of the automobile sector, especially in large sized countries like India, where the conditions in different regions. Taking the segmentation in India itself, we find that manufactures of tractors would focus only on those areas where agriculture is of prime importance and would target those agriculturists who have sizeable land holdings and have the resources to buy a tractor. On the other hand, commercial vehicle companies would segment the market on the basis of concentration of industries in different regions. Luxury car makers would definitely target the metropolitan regions for the sale of their cars, whereas small car makers would also take into account developing cities and townships into account during the process of segmentation of their products. Demographic segmentation Another important basis for segmentation of the automobile sector is demographic segmentation. Demographic segmentation provides a base marketing of products according to the income, status, age, etc. Manufactures of small cars like Nano would primarily focus on the segment of the people belonging to the middle class and here comes lies the demographic segmentation. On the other hand, luxury car manufacturers would focus more on the high income segment. Similarly, demographic segmentation plays an important role in the two wheeler market. Bike manufacturers generally target young to middle aged people. More and more manufactures are coming with automobiles for women, which have special features and are easy to use. According to the age of the target market group, automobile manufacturers would come up with different colour variants, for instance bright and flashy colours for the young and vice versa. Psychological segmentation Based on psychological segmentation, automobile manufacturers come up with different variant of the models of their products. This has been largely seen in the case of cars, where companies generally come up with two or three variants of the same model, and it has been observed by industry analysts that the variant of the medium variant of the model sells the most. Tag-lines such as “Men are Back” (used by Maruti Suzuki for the launch of a new car) and “Definitely Male” (used by Bajaj for a popular bike) target a particular category of individuals and help to increase sales and popularity in that segment. Manufacturers of luxury cars like Ferrari, Porsche, etc target the section of the society with a large disposable income and high status, and this can be achieved by psychological segmentation. Behavioural segmentation As mentioned earlier, behavioural segmentation is done on the basis of the benefits sought, loyalty status, etc. This is another important means for segmentation in the automobile sector, and taking yet again the example of a car, Daimler, the manufacturer of luxury car Maybach, customises the cars according to the needs and requirements of the products.

FURTHER SEGMENTATION

The Indian car market has enjoyed a robust growth rate in the past and at present is the sixth biggest passenger and commercial vehicle producer in the world. In the fiscal year 2011 – 2012 almost three million passenger cars were sold in the sub-continent. Naturally proper segmentation of the Indian cars is a dire necessity. This segmentation allows for automobile manufacturers to plan and position their models for succeeding in the targeted consumer section precisely. Also a proper segmentation of the different models of cars is required to levy proper taxes by government of India on them. There are different parameters based on which the cars available in the Indian market are categorized. The technically defining parameters are based on the length of the car, engine capacity, features offered, seating capacity and structure of the car etc. SIAM or Society of Indian Automobile Manufacturers divides the Indian passenger vehicles in the segments A1, A2, A3, A4, A5, A6, B1, B2 and SUV. The classification is done solely based on the length of the automobiles. The details of the segments are mentioned as below……………….. Car Segment

Length of the car/Model type

Car model belonging to the segment

A1

Up to 3400mm

Nano

A2

3401 to 4000mm

Alto, i10, Zen, Wagon R

A3

4001 to 4500mm

Manza, Logan, Dzire, City

A4

4501 to 4700mm

Corolla, Octavia, Optra

A5

4701 to 5000mm

Accord, Camry, Sonata

A6

More than 5000 mm

Mercedes S class

B1

Vans

Versa, Omni

B2

MUV/MPV

Sumo, Innova

SUV

SUV

Vitara, CRV

However, though it is simple and easy to divide the passenger cars based on their length, it is not at all practical. The price of a car isn’t determined by length only. A shorter car might be priced higher than a lengthier model. Also the features and configuration of the car models doesn’t depend on the car length. Hence, to avoid all the confusions the Indian passenger cars are popularly divided into the below mentioned segments according to the following properties. Car Segment

Distinguishing feature of the cars in this segment

Car model belonging to the segment

A

Cars priced below Rs. 3.5 Lakh

Alto, Spark, Nano, Eon

A1

Hatchback priced lower than Rs. 6 Lakh

Santro, Indica, Beat

A2

Hatchback priced between Rs. 6 to 7.5 Lakh

Ritz, i10, i20, Swift, Figo

B1

Vans

Versa, Omni

B2

MUV/MPV

Sumo, Innova

C1

Sedan models priced below Rs. 8 Lakh

Indigo, Fiesta, Sunny

C2

Sedan models priced between Rs. 8 to 9.5 Lakh

Verna, Manza, Linea

D1

Premium Sedan models priced below Rs. 15 Lakh

Fluence, Corolla

D2

Luxury Sedan models priced below Rs. 25 Lakh

Sonata, Camry, Kizashi

SUV

SUV

Vitara, CRV

Body type is the other most popular factor for classification of passenger vehicles. This segmentation process is not only limited to the Indian sub-continent, this is a common method that enjoys popularity throughout the world. The popular segments according to the car body types are mentioned as below.   

Mini Compact hatchback

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mid size cars Sedan executive cars premium cars luxury cars super luxury cars van utility vehicles MUV/MPV SUV convertibles sports cars super cars