Sidhu.docx - Intro In this case we notice a classical...

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Intro: In this case we notice a classical problem faced by a middle income group family. How to transition from a newly married couple into a fledgling nuclear family. The finances take a major hit to ensure the child has a good education. This is exactly the problem this family faces. Summary: One of the major problems faced by then is a lack of proper planning before buying the car. They did not take into account how the car would not satisfy their primary need of flexibility. Cultural factors in India dictate that buying a car is a sign of prosperity and success for a middle income group rather than buying a two wheeler even if the latter is more functional. This is reinforced by the status that such a family is expected to maintain at this point in their lives. The car not serving the purpose is what led to the decision to consider an additional scooterette. Interestingly, their were two major factors that influenced them (apart from the primary need for flexibility).
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Unformatted text preview: A strong recommendation from someone they trust and the attractive hoarding from the major brands. Also, a symptom of the lack of planning resulted in Mr. Sidhu’s developing back pain. The story played out as a perfect storm where the critical hinge that is the loan fell through. The bank manager should have accounted for any issues that mine hamper this crucial deal. This forced Mr. Sidhu to withdraw the entire amount. This coupled with the pressing requirement to procure the vehicle in a matter of days for his son’s transport to school ensured that he bought the two wheeler. Recommendations: It is important to note that as of May 2010 he has paid of Rs 1.56 lakhs of the loan. Considering they are in a tight spot selling the car would repay the outstanding car loan (1.8 lakhs is reasonable after 2 years depreciation and minimal usage). Selling the family jewellery should be the last resort....
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