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While going through the concept of substitute goods, the graduation thing that propped in my mind was the introduction of world cheapest railroad car, Tata Nano into the Indian auto mart. No other vehicle ever attracted large media attention as Nano did. The reason for hype was the price of car which was set as one hundred thousand Indian rupees, almost half the price of cheapest car available in India. Some auto experts considered Nano as a substitute to 2wheelers in India and hence a threat to the 2wheeler industry. I was really muzzy by the idea of a car being a substitute of a 2wheeler. India has got a very strong 2wheeler market which has been consistently growing at more than 15 % annually for more than 5 years. The reason for growth is demand compulsive and demand is increased due to following factors 1) Indian per capita gross domestic product has grown over 7% consistently for last 6 years and this has made 2 wheelers more affordable. 2) Indias approbative demographic proposition which consists of relatively younger population has a strong choice of 2wheelers. 3) India is relatively under penetrated market in automobile comp atomic number 18d to other emerging economies which gives a headroom for tho growth Indian 2wheeler industry consists of mainly 3 parts.

In the lower segment we have 100-125 cc bikes which come in a price sphere of 35-45k INR. Then we have the middle segment which consists of 150-200cc bikes in a price barf of 50-80k INR and the high(prenominal) segment consists of bikes above 200cc in a price range of above 100k INR. The price difference between lower range 2wheelers and Nano is too large to be considered for substitution and in the higher segment, people are not very price affectionate and they buy 2wheelers out of their choice and preference. So it is the mid segment under which some volume of the sales is highly supersensitised of being substituted. Increase in the disposable income in urban area, easier availability of credit and very aggressive pricing of Nano are some... If you want to get a full essay, order it on our website: Orderessay

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