on the basis of the information given in the following case.
Due to increased competition, Ginger Automobiles, the Indian subsidiary of Pepper Automobile Company (PAC) reported lower sales and profits. PAC expects its new model Limo, developed especially for value conscious customers of India and China, would revive its fortunes. In order to prevent customers from uying competing products, PAC announced the launch of Limo six months before schedule. Due to unrest in its Indian supplier’s plant, deliveries of essential components for its main plant was hampered, and hence it decided to launch Limo in China only as per the original plan. Within a short span of time, Limo captured 30% market share in China, which was 200% higher than expected. Indian customers who had looked forward to purchasing Limo were becoming increasingly unhappy to the non-availability of Limo in India. Ginger’s dealers were worried about loss of business from the customers who might switch to other cars.

Question 35

Statement I: In the Chinese market, Baft, and Hebe, are competing models in Limo’s target
market. Due to increase in sales of Limo by 200%, Baft and Hebe saw their market share decline by 10%.
Statement II: Baft and Hebe were not desired by the customers due to their new features.
Which of the following conclusions can be most justifiably made?


In statement 1 :

It was informed in statement 1 that the 30 percent market share reached was 200 percent higher than what was originally expected. Hence the ideal was originally 10 percent market share and hence an increase of 20 percent in total.

Since Baft and Hebe are the competitors it does not necessarily mean that each of them exactly lost 10 percent market share each. There are multiple possibilities on how this case can be generated.

Statement 2 :

Statement 2 cannot be confirmed because no detail has been informed about the new features of Baft and Hebe. The work on the Limo model has been described but nothing about Baft and Hebe.

Create a FREE account and get:

  • All Quant Formulas and shortcuts PDF
  • XAT previous papers with solutions PDF
  • XAT Trial Classes for FREE


    Boost your Prep!

    Download App