Market segmentation for automobiles

In todays 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.
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 isnt determined by length only. A shorter car might be priced higher
than a lengthier model. Also the features and configuration of the car models doesnt 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
mid size cars
Sedan
executive cars
premium cars
luxury cars
super luxury cars
van
utility vehicles
MUV/MPV
SUV
convertibles
sports cars
super cars