Maruti Suzuki India and Hyundai Motors admit that for them the rural markets hold the key of growth momentum. Both the carmakers have seen rise in their sales growth from the rural market, even if the demand in urban had slowed down.
Hyundai witnessed the share of its rural sale increase from 12 per cent in 2011 to 20 per cent as of August 2014, whereas Maruti has increased its penetration, in FY14 it sold vehicles in 93,000 villages, up from the 44,000 in FY13. The latter’s rural sales grew by 16 per cent during the year which accounted for 32 per cent of its sales, up from less than 30 per cent a year ago.
Following a hub-and-spoke model, Hyundai has opened 320 rural sales outlets over the last few years. Offering models such as Santro and Eon, they also provide service and repairs. Hyundai acknowledges that when its urban growth slacked, they were driving comfort from rural presence. It compensated for the losses there, it also helped them increase their market share. The company plans to take up its rural sales to up to 30 per cent of its total sales in few years.