IOSR Journal of Business and Management (IOSR-JBM)

e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 17, Issue 7.Ver. III (July. 2015), PP 84-88
www.iosrjournals.org

Determinants of Preference towards Passenger Cars – The Case

of Madurai City in Tamilnadu
Dr.T.Rajasekar Dr. S.Rameshkumar
Pirncipal Thiagarajar College Madurai – 625009 Tamil Nadu.
Assistant Professor Department of Commerce Thiagarajar College Madurai- 625009 Tamil Nadu.

Abstract: India is the second fastest growing car market in the world. The Indian passenger car industry is
made highly competitive because of the stiff competition between the domestic as well as foreign manufacturers.
The survival and success in this competitive environment relies largely on the introduction of the innovative
products or services with potential for need-fulfilment. The manufacturers or sellers must fully understand the
factors which influence the consumers’ choice towards a particular brand of car. In this context, the present
paper attempts to identify and analyse the factors influencing the selection of a particular brand of car by the
car owners in Madurai City. This paper is based on both the primary and secondary data. The primary data
were collected by the researcher from a sample size of 150 respondents by adopting Proportionate Random
Sampling Technique. The results of the study show that price and fuel efficiency are the dominant factors and
the pick-up and comfort and the latest technology are the least and last factors that influence the sample car
owners in the study area while purchasing selected brands of cars.
Key words: Brand Image, Automobile Industry, and Passenger Car.

I. Introduction
The Indian automobile industry has been growing in leaps and bounds in the recent past which enables
it to reach zenith of prominence and pride in the Indian economy. The extraordinary growth that the Indian
automotive industry has witnessed is a result of two inter-related factors namely, the improvement in the living
standards of the middle class leading to increase in their purchasing power. Moreover the liberalization
measures, such as, relaxation of the forex and equity regulations, reduction in tariffs on imports, and reforms in
the banking sector initiated by the Government of India (GOI), have made it easy and possible for the Indian
automobile industry to scale new heights. Added to these is the institutionalization of automobile finance which
has further paved the way for a sustainable long-term high growth of the industry.
The unprecedented growth in demand for luxurious models, SUVs and mini-cars chiefly because of
increased purchasing power of middle class people has made the Indian automobile The small and compact cars
together occupy around 80 per cent of the Indian car industry, leaving the mid-segment and luxury cars in terms
of sales and volumes behind (Ramesh Sardar, 2012).
The Indian passenger car industry is made highly competitive because of the stiff competition between
the domestic as well as foreign manufacturers. Most of the 13 car manufacturers in the Indian passenger car
industry are multinational corporations, who received a red-carpet welcome after the Indian economy opened
up. Maruti is one of the few Indian manufacturers with 50 per cent of the market share in the mini and compact
cars segment (Ramesh Sardar, 2012). The survival and success in this competitive environment relies largely on
the introduction of the innovative products or services with potential for need-fulfilment. Further, a company
should have adequate level of competency to overcome the tough competition in the market efficiently and
effectively Besides, a dramatic change in the expectation of customers and the competitive climate in the Indian
automobile market have forced the car manufacturers or sellers to manufacture various innovative products to
generate and sustain the confidence and satisfaction of the customers. Today, the consumers have a number of
brands and variants of cars from among which they can select a particular brand with the hope of drawing more
satisfaction from the choice. But, before making final choice, they have to consider a number of factors.
An identification and thorough analysis of various factors influencing the consumers‟ decision towards the
purchase of particular brand of car alone would guide the manufacturers to develop and deliver the right product
at the right time. The manufacturers or sellers must fully understand the factors which influence the consumers‟
choice towards a particular brand of car. In this context, the present study entitled „Determinants of Preference
towards Passenger Cars in Madurai City‟ is an attempt to identify and analyse the factors influencing the
selection of a particular brand of car by the car owners in Madurai City.
This paper is organized broadly into four parts. Part I presents the literature review. Part II prescribes
the objectives and methodology while part III presents the profile of the sample car owners. Part IV analyses
the factors influencing the brand preference by the owners of passenger cars in the study area followed by a
short summary and a few concluding remarks.
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 Determinants of Preference towards Passenger Cars – The Case Of Madurai City In Tamilnadu

II. Literature Review

The buyers‟ purchase behavior is not only influenced by current price of a product but also by the price
they expect in future (Krishna, 1994). The owners of passenger cars in the major cities of the state of Punjab and
the Union Territory of Chandigarh perceive that safety and comfort are the most important features of the
passenger car followed by luxuriousness (Mandeep and Sandhu, 2006). The speed, comfort and safety are the
most significant factors which influence the purchase of Sedan car by the customers in the US market (Chen
Lihua, 2007). The country of origin, brand name, lower price, and distributor‟s reputation completely has a
significant impact on the sale of passenger cars (Brown et.al, 1987). The passenger car owners in Coimbatore
City give more importance to fuel efficiency than other factors and they prefer to purchase the passenger cars
which offer high fuel efficiency, good quality, technology, durability and reasonable price (Chidambaram and
Alfred, 2007). Safety, value for money, and riding comfort are the most important factors that influence the
purchasing decision of the Chinese consumers towards passenger cars (Dongyan and Xuan, 2008).
The name of the company, durability, driving comfort, brand popularity, spare parts availability, travel
convenience and overall look are the major factors that led the customers to prefer Maruti product to others
(Purohit, 2009). The influence of peer group is higher for the purchase of small sized and mid-sized cars in
Coimbatore District (Clement and Venkatapathy, 2009). The price of the car is the most important factor for
selecting Nano followed by the name TATA which stand quite tall in the country. The factors like global
presence, worldwide reputation and quality have played a pivotal role in the decision-making of customers in
Puducherry City towards preference of local and global brands. One of the most important factors influencing
the purchase of passenger cars in India is the availability of auto finance or consumer credit (Joseph and
Kamble, 2011). The demographic factors such as age, monthly household income and the number of earning
members in the family have a significant impact on the positive attitude towards the imported, used cars
(Johnson and Sargunam, 2012).
The factors like sources of information need for fuel economy and necessity, cost and durability,
warranty and prestige, comfort, and value are the motivating factors for the purchase intention of car owners in
Vellore District of Tamilnadu (Akbar and Ashok, 2012). The price of the car, advanced technology, market
re-sale value of the brand and model, security features, safety features and driving comfort were the
prominent factors which influenced the consumers‟ purchasing behaviour of passenger cars in the State of
Kerala (Balakrishnan and Jagathy, 2012). The product reliability, monetary factor, trendy appeal, frequency of
non-price promotions offered, trustworthiness and customer feeling or association towards brand are the most
dominant factors influencing customers‟ brand preference towards SUVs and MUVs (Prasanna
Mohan Raj et. al, 2013). The value consciousness, price, and quality are the parameters that influence the
customer purchase behavior towards small cars within the city of Pune (John and Pragadeeswaran, 2013). Price
is one of the most important factors and safety measures in car are least preferred factor that influences the
consumer behavior with special reference to small cars in the cities of Jaipur and Jodhpur (Joshi, 2013).
Though, there are a number of studies focusing on the determinants of brand preference only a limited
number of studies have attempted to analyse the determinants of branded cars in general and medium-sized cars
in particular. There is no extensive and exhaustive study which has focused on the factors influencing the
purchase behavior of the car owners in Madurai District in general and Madurai City in particular. Hence the
present study attempts to fill this gap in the existing literature by shedding light on the factors determining the
selection of passenger cars by the car owners in Madurai City.

III. Objective And Methodology

Objective
1. To analyse the factors influencing the brand preference by the owners of passenger cars in Madurai City.

Methodology
This paper is based on both the primary and secondary data. The secondary data required for this paper
were collected and compiled from both the published and unpublished sources. The primary data were collected
through a scientifically developed questionnaire during the period of June to August 2012. The questionnaire for
the present study was framed based on the information gathered from the review of the previous studies
undertaken on this topic. An in-depth discussion and interaction by the researcher with the experts in this field
and car dealers in Madurai City have helped him make the questionnaire respondent-friendly. Further, the
questionnaire was subjected to extensive pre-testing and refinement through a pilot study among the 30
respondents. The required data were collected by the researcher from a sample size of 150 respondents by
adopting proportionate random sampling technique.
There are three Regional Transport Offices in Madurai District. Of which the Regional Transport
Office, Madurai South, located in Madurai City, was selected for the present study. From the selected Regional
Transport Office, the details of total number of cars registered at this office in 2011 were collected for the

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 Determinants of Preference towards Passenger Cars – The Case Of Madurai City In Tamilnadu

purpose of designing the sampling plan. The records available with the Regional Transport Office have shown
that there were 1624 cars registered in 2011. The top five car manufacturing companies in terms of number of
units sold were selected for the present study. The selected companies were Maruti Suzuki India Limited, Tata
Motors Limited, Ford India Private Limited, Mahindra and Mahindra Limited, and Hyundai Motor India
Limited. Finally, one fast moving brand form each company was selected based on the number of units sold.
The fast moving brands selected from each company include Maruti Alto, Tata Indica, Hyundai i10, Ford Figo
and Bolero from Mahindra and Mahindra. Finally, the Proportionate Random Sampling Technique has been
adopted to select 150 respondents from the owners of these five brands. The list of sample companies, sample
brands, and the number of respondents selected from each category are presented in Table 1.

Table 1: Sample Size of the Study

Name of the Company Name of the Brand Number of Cars Registered Sample Size
Maruti Suzuki India Limited Alto 177 56
Tata Motors Limited Indica 81 26
Ford India Private Limited Figo 93 30
Hyundai Motor India Limited I10 65 20
Mahindra and Mahindra Limited Bolero 56 18
Total 472 150
Source: Regional Transport Office, Madurai.

Out of 472 car owners of these five brands who made a purchase in 2011, 150 were selected for the
present study by employing Proportionate Random Sampling Technique. The collected data were put to a
critical statistical examination with the help of tools such as the Percentile Analysis, Averages, Mean Scores,
Standard Deviation, and Garrett‟s Ranking Technique.

Profile of the Sample Car Owners

In this part, an attempt is made to present the socio-economic profile of the sample car owners in the
study area which will bring to the limelight various socio-economic factors like age, sex, marital status,
occupation, income, family type, and the like. Further, efforts have been made to understand the availability
and usage of car by the sample car owners in the study area. Table 3 presents the demographic characteristics of
the sample car owners in the study area.

Table 3 : Demographic Characteristics

Variables Categories Number of Respondents Per cent
Male 121 80.67
Sex Female 29 19.33
Total 150 100
Below 25 Years 13 8.67
25 to 35 Years 71 47.33
Age 35 to 45 Years 44 29.33
Above 45 Years 22 14.67
Total 150 100
Married 134 89.33
Marital Status Unmarried 16 10.67
Total 150 100
Joint family 57 38
Family Type Nuclear family 93 62
Total 150 100
School Education 37 24.67
Under Graduates 61 40.67
Educational Post Graduates 40 26.66
Qualifications Professionals 12 8.00
Total 150 100
Businessmen 34 22.67
Professionals 12 8.00
Occupation Private Employees 56 37.33
Govt. Employees 48 32.00
Total 150 100
Below Rs.20000 3 2.00
Rs.20000 to Rs.40000 22 14.67
Monthly Income Rs.40000 to Rs.60000 44 29.33
Above Rs.60000 81 54.00
Total 150 100
Source: Primary Data

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 Determinants of Preference towards Passenger Cars – The Case Of Madurai City In Tamilnadu

Table 3 reveals that a majority of the sample car owners in the study area are males and most of the car
owners in the study area are in the age group of 25 to 35 years. It could be understood that 113 out of the 150
sample car owners have completed their higher education. Most of the car owners in the study area are private
employees while the professionals constitute only eight per cent of them. It is crystal clear that the majority of
the sample car owners is married and belongs to the nuclear family category. More than three fourths of the car
owners in the study area earn more than Rs.40000 per month.

Factors Influencing the Selection of the Passenger Cars

The purchasing decision of the consumers towards a particular product or service is not influenced by a
single factor but by a number of factors which do vary from one brand to another, from one product to another,
and from one person to another person. So, the identification and analysis of the factors which are considered
by the consumers before making the purchasing decision are essential for the manufacturers or traders for
success which in turn ensures survival in the competitive market.
In this part, an attempt is made to study and analyse the factors considered by the car owners in the
study area while purchasing cars. For this purpose, the respondents were asked to rank the following factors
according to their priority towards a particular brand of car.
1. Brand Image
2. Maintenance Cost
3. Latest Technology
4. Pick up and Comfort
5. Fuel Efficiency
6. Price
7. Model, Size and Style
8. Resale Value
9. After Sales Service, and
10. Availability of Spare parts

The order of merit thus given by the respondents was converted into rank by using the following formula.
100 (Rij – 0.5)
Percent Position = ----------------------
Nj
Rij = Rank given by the ith factor
Nj = Number of factors ranked by the jth individual
The per cent position of each rank was obtained and converted into scores by referring to the table
using Garrett‟s ranking. Then for each factor the scores of individual respondents were added together and
divided by the total number of respondents. Ranks were assigned and the important factors were identified.
The ranks assigned by the sample car owners are presented in Table 1.

Table 1: Factors Influencing Preference towards Passenger Cars

Source: Computed from the Primary Data.

Table 1 reveals that the important factors that influence the sample respondents in the study area on the
purchase of Maruti Alto include price, fuel efficiency, maintenance cost, resale value, and after sales service
while the factors like brand image, availability of spare parts, model size and style, latest technology, and pick
up and comfort occupy a secondary position. The price is the most influential factor and pick up and comfort is
the least influential one in the choice of Maruti Alto. As far as the purchase of Tata Indica is concerned, much
importance is given to fuel efficiency and less importance to the factor of pick up and comfort. It is clear that
out of the 10 factors identified the most important factors considered by the sample car owners in the study area
while purchasing Hyundai i10 and Ford Figo is price while the factor of pick up and comfort was given the last
and least rank. Further, it is understood that as far as the purchasing of Mahindra‟s Bolero was concerned, the

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 Determinants of Preference towards Passenger Cars – The Case Of Madurai City In Tamilnadu

sample car owners gave much priority to brand image and least importance to latest technology. So, these
ranking naturally lead to the conclusions that the price and fuel efficiency are the dominant factors influencing
the choice of passenger cars by the sample car owners in the study area and the factors that are least considered
by them are the pick up and comfort and latest technology.

IV. Summary And Conclusion

A dramatic change in the expectation of the customers and the competitive climate in the Indian
Automobile Market have forced the car manufacturers or sellers to manufacture various innovative products to
win the confidence and sustain the satisfaction of the consumers. Today, the consumers have a number of brands
and variants of cars. Though there are a number of brands available in the market today the consumers select
only a particular brand with the hope of drawing more satisfaction from the choice. But, before making the final
choice, they consider a number of factors. A clear identification and thorough analysis of the various factors
influencing the consumers‟ decision towards the purchase of particular brand of car alone would guide the
manufacturers to develop and deliver the right product at the right time. The manufacturers or sellers must
understand the factors that influence the choice of consumers. In this context, the present study is an attempt to
identify and analyse the factors influencing the selection of a particular brand of car by the car owners in
Madurai City. The results of the study show that the price and fuel efficiency are the dominant factors and the
pick-up and comfort and the latest technology are the least and last factors that influence the decision of the
passenger car owners in the study area.

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