Forecasting Compact Car Market in India
Forecasting Compact Car Market in India
Contents
Executive Summary 3 Problem Statement 4 1. Demand Analysis 5 2. SupPly Analysis 7 4. Forecasting model 11 5. Cost/Profit Analysis for KIa 12 Conclusion 13 References 14
Executive Summary 1.
Problem Statement
KIA has decided to enter Compact Car market in India. KIA proposes to introduce cars in the range of 5-8 Lacks that will compete with Maruti Dzire, Hundai Accent, Maruti SX4 rtc.
The current size of market for cars in this range is :
Quantity of cars produced in this range is:
Current Market Share of various cars in this market
From the Supply perspective KIA expects
Fixed Costs as:
Marginal Costs as:
Average variable costs as
<We need to assume something here based of any other company cost structure : for example say KIA need to spend 3.5 lacks per car to produce at quantity 2000 nos per yesr>
The objective of this study is to find out based on market and competitor analysis number of cars Kia need to produce to recover their investment in 5 years.
1. Demand Analysis
The Law of Demand states that the relationship between a good’s price and the quantity demanded of that good is negative. This is referred to as a “change in quantity demanded”. Own-price changes cause movements along a given demand curve.
The demand for automobiles for is dependent of certain factors:
The demand function for X:
XD = f (PX, Ps, Pc, I, T&P, Pop, A, O, PPP, R, SP, Av, In, Tr, F)
Where:
XD = quantity demanded
PX = X’s price; the price of a car
Ps = the price of substitutes
Pc = the price of complements
PPP=Purchasing Power parity of the consumers
R= Rising income level of the consumer
I= Inflation of the country
A=after sales service cost
T&P=tastes and preferences
Pop=population in market or market size
O=Oil prices
SP= Price of Spare Parts
Av= Availability of nearby service station
In=Lack of proper roads
Tr= Traffic Condition on the
Contents
Executive Summary 3 Problem Statement 4 1. Demand Analysis 5 2. SupPly Analysis 7 4. Forecasting model 11 5. Cost/Profit Analysis for KIa 12 Conclusion 13 References 14
Executive Summary 1.
Problem Statement
KIA has decided to enter Compact Car market in India. KIA proposes to introduce cars in the range of 5-8 Lacks that will compete with Maruti Dzire, Hundai Accent, Maruti SX4 rtc.
The current size of market for cars in this range is :
Quantity of cars produced in this range is:
Current Market Share of various cars in this market
From the Supply perspective KIA expects
Fixed Costs as:
Marginal Costs as:
Average variable costs as
<We need to assume something here based of any other company cost structure : for example say KIA need to spend 3.5 lacks per car to produce at quantity 2000 nos per yesr>
The objective of this study is to find out based on market and competitor analysis number of cars Kia need to produce to recover their investment in 5 years.
1. Demand Analysis
The Law of Demand states that the relationship between a good’s price and the quantity demanded of that good is negative. This is referred to as a “change in quantity demanded”. Own-price changes cause movements along a given demand curve.
The demand for automobiles for is dependent of certain factors:
The demand function for X:
XD = f (PX, Ps, Pc, I, T&P, Pop, A, O, PPP, R, SP, Av, In, Tr, F)
Where:
XD = quantity demanded
PX = X’s price; the price of a car
Ps = the price of substitutes
Pc = the price of complements
PPP=Purchasing Power parity of the consumers
R= Rising income level of the consumer
I= Inflation of the country
A=after sales service cost
T&P=tastes and preferences
Pop=population in market or market size
O=Oil prices
SP= Price of Spare Parts
Av= Availability of nearby service station
In=Lack of proper roads
Tr= Traffic Condition on the
References: