Answer to Question #239875 in Economics of Enterprise for dev

Question

Aston Martin ,the car immortalized by the superspy James bond, is the latest entrant into the Indian ultraluxury car market. In 2011 alone, this is the fourth super car to be launched in India after the Rs.4.5 crore worth Maybach in Feb., the Rs.12.5 crore-koenigsegg Agwera in March and the Rs.1.4 crore Maserati in early April. The top – end of the Indian luxury car market is already crowded with more than two dozen models carrying a price tag of over Rs.1 crore. Aston Martin has added nine more to the array of super luxury cars: amoung them One-77 at Rs.20 crore, is the priceiest car to be launched in India. As for the rest of the models priced between Rs.1.4 -2,6 crore, Lalit Choudhury, Managing Director, Performance cars, the dealer of Aston Martin in India said they expect to sell 30 units this year. The company has sold just 55,000 cars in its 97 year history and about 5000 cars Explain consumer behaviour in the case of such high priced cars, by comparing them with other similar products.

Answer 1

As price goes up, consumers tend to focus on cheaper items to meet their standards. However, aspects such as quality of performance tend to make customers look for the current products. Considering that time contributes to total outcome, this makes consumers prefer the expensive vehicles. Similarly, the customers go for products which last for long periods. In this case, they go for the current innovative projects despite their prices.