4 Wheelers Case Study

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FACTORS AFFECTING DEMAND
1. PRICE OF RELATED GOOD
• Substitute goods
Let us analyse the four wheeler industry through its usage- commercial and passenger.
Passenger Vehicles: The number one substitute for 4 wheelers in India or rather the usage of 4 wheeler is the public transportation. If the ticket price is noticeably low, many people may choose to use public transportations. This is especially true for crowded cities and for millions of students around the world. In such a scenario, people would not want to buy their own personal 4 wheeler Consequently, this will affect the demand for 4 wheelers negatively. As followed, supply remaining constant, a fall in demand will cause a fall in price.
Again if there is an increase in the price
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An increase in the disposable income of the consumer implying an increase in his purchasing power of the consumer, would cause a rightward shift in the demand curve. In recent time we have seen that due to increase in the Income of the general public, there has been a shift from the Lower CC-segment cars to the Upper CC-segment cars. So, with higher income and a
3. CONSUMER EXPECTATIONS
The future expectations of the consumers range from common belief to individual belief that the price will rise or the supply would decrease or there might be a stockout. In either case, people purchase more or less automobiles. For example, currently, people think that the low demand for cars due to the slowdown in the world economy will bring the prices down. Therefore, they may have been postponing their purchases. However, determinants of the demand are not the only factors affecting the prices. To any change in demand, supply responds, too. Therefore, people postponing their purchases may not win as much as they expect.
Another important facet on consumer expectations with regard to price are brought to limelight during festive season. For say, during Diwali, consumers often expect discount bonanza offers from various automobile manufacturers. Owing to such expectations, they often delay their demands
4. ECONOMIC

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