For car companies, road to growth lies in countryside - Times of India

The author has posted comments on this articleNandini Sen Gupta, TNN | Mar 30, 2013, 05.46AM IST CHENNAI: With their breadand-butter metro markets showing no signs of a demand pick-up, car companies are increasingly focusing more on non-metro, semi-urban and rural markets. Big volume carmakers like Maruti, Hyundai and GM currently get upwards of a quarter of their total sales from rural markets. With rural and semi-urban demand for cars ruling at 19-25 % in sharp contrast with the industry average of negative growth, carmakers are stepping on the gas to drive further into hinterland markets. Hyundai Mot or India (HMI), for instance, has been steadily pushing its retail footprint into rural markets. The result: In 2012, 25% of the company's total sales volume came from rural markets. 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 firsttime buyers." To achieve that objective, the company is looking to increase its access footprint. "In 2013, we will increase our sales and service network in these markets," said Seo. "Our target is to increase the dealership network from the current 355 to 385, rural sales outlets from 264 to 350 and sales branches from 173-190." Same is the case for General Motors India, which has also been pushing into hinterland markets along with its new diesel focus. Like Hyundai, a healthy share of GM India's total sales come from rural markets. "Rural market's share in GM India's total sales is around 28-30 %. And the growth in rural markets is approximately around 25%," said P Balendran, spokesman, GM India. "We are increasing network, doing road shows, etc, to improve our rural presence and we are running additional schemes for these markets in lieu o f corporate discounts in metros," he added. In Maruti's case, company officials announced earlier this month that its rural sales were up 19% this year. Maruti started its rural focus five years ago and since then, sources say, much of its market share gain has been on the back of sales in rural and semi-urban markets. Rural markets' share in Maruti's total sales has also increased sharply from around 4% in 2008 to around 28% now. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFw31blxq5RMAwuc2Fh-Wx2s-cRKQ&url=http://timesofindia.indiatimes.com/business/india-business/For-car-companies-road-to-growth-lies-in-countryside/articleshow/19286376.cms

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