Maruti, Hyundai and GM Shift their focus to Rural and Semi-urban Markets

The Indian auto industry is going through a very bad phase and the company's major (metro city based) markets are not showing any growth in demands. Now-a-days, car manufactures are focusing more on non-metro, semi-urban and rural markets. Largest car manufacturer Maruti along with Hyundai and GM have registered a growth in total sales (quarterly) in rural markets. When the industry average is in negative growth, rural and semi-urban demand for cars is overriding at 19-25 per cent. Car makers are looking to invest more in backward and rural markets to make most of it.

Hyundai Motor India has been regularly improving its dealerships intu rural markets. Last fiscal, 25 per cent of total sales of the company came from rural markets. Speaking to ET, Bo Shin Seo, CEO & MD, Hyundai Motor India (HMI), said, "Hyundai has a strong network of touch points across the country. Our rural market strategy is to penetrate these markets by engaging customers to sustain growth and increase volumes. Our objective is to make our products easily available to first time buyers." In order to facilitate all its products to buyers, Hyundai is looking to increase its footprints in rural areas. The company targets to increase its dealership network from the current 355 to 385, rural dealerships from 264 to 350 and sales branches from 173 to 190.

Similarly, General Motors India is also aiming to increase its footprints in hinterland markets along with its new diesel focus. GM India's total sales too come from rural markets. P Balendran, spokesman, GM India said that “ Rural market's share in GM India's total sales is around 28-30 %. And the growth in rural markets is approximately around 25%," The company is increasing its rural network via road shows, etc, in order to enhance their rural presence and the firm is also giving special schemes to lure more customers.

Maruti Suzuki India has officially announced that its rural sales were up 19 per cent this year. Five years back, the largest car manufacturer had shifted its focus from urban market to rural industry, and sources say that much of its market share came from the sales in rural and semi-urban markets. The company's total rural sales has increased from 4 per cent in 2008 to around 28 per cent now.

Source : ET