Maruti Suzuki eyes expansion in rural markets

For us, the rural markets did better than urban last year, says Srivastava

Buoyed by a faster pace of sales growth in rural India compared with urban centres, country’s largest car maker Maruti Suzuki is aiming to expand sales operations to cover the remaining over two lakh villages as it expects the growth trend to continue driven by factors such as rising rural incomes and increasing motorisation.

The company has till now sold cars in about 4.40 lakh villages out of the over 6.40 lakh villages in the country, Shashank Srivastava, Senior Executive Director (Marketing & Sales), Maruti Suzuki India, told The Hindu.

“For us, the rural markets did better than urban last year…Rural markets have now been outperforming urban markets since 2007 when we started monitoring the sales separately, except for a couple of years,” Mr Srivastava said.

The company sold 5,47,490 vehicles in the rural market in 2019-20 with these markets accounting for 38.5% share of the total sales, increasing to 5,83,300 units (40.9% sales share) in 2020-21 and 5,91,800 (43.6% sales share) in 2021-22, when the overall industry was struggling.

“If you take the last three years, the urban growth has been negative, otherwise both markets have been growing with rural growing at a faster pace…and this trend will continue largely because of factors such as rising rural income, increased pace of motorisation…monsoons have also been good in the past couple of years,” he said.

He added that up till 2015, the company had covered only about 1.9 lakh villages, and aggressively worked towards increasing this number to over 4.40 lakh villages now. “That is the true rural story, how motorisation in rural areas is increasing…but we are not taking delight in the fact that we have covered so many villages but are looking at why we have not covered the rest of the villages,” he said.

Mr Srivastava added that the company has a concept of RDSE or rural dealer sales executive, who are present in nearby bigger villages or smaller cities and given charge of all the villages around. “We have increased our rural manpower or RDSE from about 11,000 people in 2015-16 to more than 17,000 today. Because you can’t have outlets in every village, RDSEs is one way of increasing the penetration in rural areas,” he said, adding that the overall outlet network in rural areas has also been increased to 1,220 outlets in 2015-2016, to about 1,900 outlets today.