| The main purpose of this study is to determine the market potential for consumer durables in India. However, the underlying purpose is to analyze the attractiveness of the Indian market for foreign direct investment. This is achieved by evaluating the business environment of the Indian market and identifying the characteristics of a typical buyer of consumer durables.The study indicates that the typical buying household of a consumer durable resides in an urban location of India. The household is in the middle income group for cassette recorders, refrigerators, and motorcycles. Low income households explain the variation in purchases of color televisions, and high income households explain the variation in purchases of washing machines. Urban location of a household explains the variation in purchases of black and white television sets.Whereas middle income urban households explain the variation in purchases of a majority of consumer durables, there is an indication of potential markets for consumer durables emerging in the rural sector and east region of India.To estimate the demand for consumer durables, the explanatory variables used in the study are income and location (urban/rural) of households grouped in four regions of India, North, South, East, and West. Regional implications on purchases of consumer durables are also examined. Consumer durables are selected from three product categories, viz., household appliances, transportation devices, and entertainment devices. The selection of consumer durables is done keeping in mind the buying power of a household at all levels of income. |
