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Carmakers target low income group

Carmakers target low income group

Author | Source: The Economic Times | Thursday, Jan 12,2006 8:30 AM

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Carmakers target low income group

Drivers, gardeners, clerks, peons... A brand new low income category is fast emerging as an attractive target audience for carmakers.

While some volume carmakers are looking at two-wheeler customers in metros, others are looking for similar profile customers in smaller townships in their search of incremental growth. It's all part of volume car companies' search for alternative segments.

Take car market leader Maruti. The company has been targeting Rs 12,000-18,000 annual income, two-wheeler upgrade segment with its government employee schemes which has been contributing around 10% of its total monthly sales in the April-December period.

According to company sources, as much as 68% of the new owners covered by its government-employee scheme are first time car buyers. This includes a 52% two-wheeler upgraders.

As much as 45% of all buyers covered by the scheme are non-gazetted government employees including senior mechanics, senior division clerks, gardeners, drivers, senior loco inspectors in the Railways and peons.

The age-group, too, is overwhelmingly 40-plus-as much as 61% of all buyers under these schemes are in that age-group.

Says Maruti MD Jagdish Khattar, “We have only scratched the surface. The potential is immense. We have learnt that apart from offering the right product and service support, you also have to hand hold the customer, provide reassurance, change mindsets, before these customers are persuaded to buy a car.”

Arch rival Hyundai is also looking at alternative audiences but in a different category. “We are looking at people in the second-hand market who are upgrading to a new car,” says Hyundai Motor India president BVR Subbu. That segment is being targetted by the company's base-model non-AC Santro.

Hyundai is also looking for incremental growth from “under-10 lakh towns” and newer segments like BPO executives. A scheme targeting call centre execs in Delhi, Bangalore and Hyderabad fetched Hyundai around 1,000 units in three months alone.

Tags: e4m

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