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201220 Jul



Indian automaker Maruti Suzuki is increasingly focusing on the rural market to drive their overall sales. Currently, the company sells one of every three cars in the rural areas. Maruti Suzuki expects that by 2015-16, the rural market will contribute almost half of its total sales figures.


In a slowing Indian market where sales have hit bumps led by higher fuel prices and expensive finance, rural market has become a key for Maruti Suzuki's success. To overcome the negative market sentiments and dip in sales figures, Maruti has opened 23 new retail outlets in towns and hamlets in the last three months.


Maruti's share of rural sales has witnessed a steady growth over a period of time and last month it got a big boost with 55 per cent growth in sales, taking its overall share to an all-time high of 33 per cent from just 3 per cent in 2007-08.


Maruti Suzuki identifies human settlement of around 10,000 as rural markets and has sold more than 23,000 cars in such markets in June 2012. Maruti rural marketing initiative started in 2007, when it identified many small clusters to sell cars and roped in panchayat functionaries to generate potential customers. Now, many of these small clusters - apple growers in Himachal Pradesh, turmeric farmers in Tiruchengode in Tamil Nadu - are generating consistent sales. According to company data, many of these customer groups account for 35-50 vehicle sales a month that double during the harvest season and festivities.


Maruti Suzuki’s research reveals that only 40 per cent of the rural buyers are farmers, whereas traders, school teachers, state government employees and shop keepers make up the remaining clientele. Rural markets have several inherent strengths and generate intrinsic demand. Though it largely depends on a good monsoon, the huge investments in roads and other infrastructure have helped sustain demand in recent years.


Maruti Suzuki also boasts of the largest network in India. Its current strength stands at 1,119 new car sales outlets in across 811 cities. Around 40 per cent of these are purely based in rural markets. In addition, it also has 421 pre-owned car business outlets.

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