There are short term issues, but the A3 segment is here to stay...

IIPM PUBLICATION

As the Tatas struggle with the idea of a Rs. 1 lakh car to cater to the bottom of the pyramid, they may have already missed the bus where it truly mattered the most. And that’s because the action in Indian car market is now moving towards value, rather than price. This is quite evident with the phenomenal performance of the A3 segment, where the competition is beginning to truly heat up.

As Rajeev Chaba, President and MD, General Motors India, states, “The first three box (A3) car has tremendous aspirational value for an individual, it is a statement of his having arrived in life.” Driven by this aspiration, coupled with easier finance options and more extravagant lifestyles, customers don’t mind spending that Rs.1-2 lakh extra for a better car. And automakers are religiously lapping up this opportunity.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative