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The various micro variables that affect the demand of cars in the country are given below:
Price of the car
On increase of price of cars, demand reduces and vice versa. People start looking at buying at more economic cars, or switching to ther options like using public transport system, buying second hand cars or postponing their decision to buy the car until the price of their desired car increases. Small and mid segment cars are specially sensitive to price rises or price decrease. Similarly there would be a spurt in demand when price reduces.
However this cannot be held to be universal, luxurious cars like porche, mercedes retain their attraction through their very high price which appeals a certain section of people who want exclusivity. In this case price decrease might have an adverse affect on their demand.
Price of the fuel
The operating and maintenance cost of the car plays a major role in decision making of many buyers of cars, the former being hugely determined by the price of fuel. Increase in prices of the fuel might lead to buyers to switch to a higher mileage car or postpone or abort his decision to buy the car.
After sales service
As mentioned before maintenance cost also has a major impact on the decisions of the buyers. Number of free services after sale, ease of availability of spare parts, cost of spare parts, he spread and availabilty of authorized dealers and service centers are other important attractions for the buyer. Maruti is extremely popular in this respect, its service centers can always be convieniently loctaed across India.
Availability of features
More the features provided with more optimal cost more will be the demand for the car. Customers desire better features with the car they purchase. Power steering, power windows, air bags, fog , air conditioner etc, there are many additional features that can be provided. Many companies have started providing a lot of these...