Led by the government’s infrastructure development push and their own network expansion plans, original equipment manufacturers (OEMs) said that passenger vehicle (PV) sales in rural areas have grown exponentially and the trend is expected to continue in the next financial year.

For companies like Maruti Suzuki India (MSIL), the growth in rural sales is much higher than the urban market.

“The rural growth for PVs this fiscal has been higher than urban by a fair margin. Rural PV growth is at 11.7 per cent against eight per cent for urban areas. For Maruti Suzuki, the rural penetration is at around 45 per cent and sales are expected to cross eight-lakh units,” Shashank Srivastava, Senior Executive Officer, Marketing and Sales, MSIL, told businessline.

Good rural sales came on the back of near normal monsoon and Rabi sowing of eight per cent higher than last year, he said adding that “ the large investment in rural infrastructure also helped .”

MSIL sold 16,07,163 PVs in the domestic market between April 2023 and February this year, compared with 14,74,107 units in April-February 2022-23.

Tata Motors also said that its new generation products including the Nexon, the Punch and the Tiago were well received in these markets.

“With 40 per cent of the total sales being generated from rural markets, Tata Motors rural sales volumes in FY24 are five times higher than those in FY20. To get closer to our customers, we have expanded in both sales and service workshop set-ups, resulting in over 800 outlets being located in nearby towns, catering specifically to our rural customers,” Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, told businessline.

He said the company has also deployed 135 Anubhav vans (mobile showrooms) and going ahead, it is working extensively with dealer partners on expanding sales and service networks, increasing manpower and providing more test drives for a wholesome customer experience.

Tarun Garg, Chief Operating Officer, Hyundai Motor India (HMIL), said the contribution from rural market to its total sales has gone up significantly in the last few years.

“From 17 per cent in calendar year (CY) 2021 to an impressive 20 per cent in 2023, it is evident that the rural market is becoming a significant pillar of our success. One big reason for this increase in contribution is the growth in road infrastructure which is bringing the hinterland more and more closer to us,” Garg said.

The company sold a total of 6,02,111 PVs in the domestic market in CY 2023, up nine per cent compared with 5,52,511 units in CY2022.

“We believe rural markets have further potential to grow faster in the future and we remain committed to serving and engaging with rural customers, leveraging our expertise and innovative approach to meet their evolving needs and preferences,” Garg added.

“Rural sales will grow backed by expansion of dealer network, growing infrastructure. Private and government capex investment will fuel job demand and on other side boost in agricultural income will support growth,” Puneet Gupta, Director, Vehicle Sales & Powertrain Forecast - India and ASEAN at S&P Global Mobility, said.