Maruti Suzuki India Limited (MSIL), India's largest car maker, has been able to surge its sales volume in Q1 of current fiscal through extensive focus on rural regions and exchange schemes. The boost in the sales was despite the fact that the market continued to remain sluggish. Such was the success of the exchange schemes and popularity of brand in rural regions wherein the company sold 1,24,476 units, accounting for 47 per cent of its total sales volume.
Chief Operating Officer (COO), Marketing and Sales, MSIL, Mayank Pareek, said, “Over a third of our sales used to come from customers who buy new vehicles in exchange of older ones before the slowdown hit the industry last year. These buyers had been deferring purchase due to the negative sentiment prevalent in urban markets. We intensified focus on expanding volumes through our loyalty programmes and have been able to grow sales by over 18 per cent in the category.”
In the first quarter of fiscal 2013, Maruti Suzuki sold a total of 60,467 new models with the help of its exchange programs. The total sales volume of the auto maker stood at 2,63,264 units, which showed a YoY surge of five per cent over same period of 2011. Pareek stated, “Around 1.5 million customers service their vehicles every month, 10 per cent of whom own vehicles which are more than 10 years old. We identify these consumers and offer them loyalty bonus to exchange their cars for new ones.”
To better utilise its wide-spread distribution network, Maruti Suzuki has pinpointed more than 500 new targeted customer groups in the non-metro cities, which will help the company in generating more sales. According to Pareek, several customers in these areas are not much affected by the slowing economic conditions. The company is looking out for such potential buyers and has already garnered more than 5,000 bookings in the first quarter of the current fiscal from its rural areas’ distributors with over 2,500 bookings from the farmers.
The biggest concern for MSIL in these areas was to make the first-time buyers realise the need of a car. As per a senior Maruti Suzuki official, people in such regions enjoy a steady influx of income, which is unhampered by turbulence in urban markets. Such individuals are quite rich but however fail to realise the need and utility of a personal mode of transportation. To educate such customers about the same, MSIL has established mobile theatres in their regions.
The automotive giant sold a total of 64,009 units across whooping 7,950 villages during the quarter ended in June with an increase of 37 per cent against the same tenure last year. In order to deliver an improved after sales service to its new segment buyers, MSIL has set-up 3,000 workshops in 1,464 villages across the country. By 2015, the company anticipates the rural regions to contribute 50 per cent of its total sales volume. In India, rural market is indeed a crucial market for those who wish to progress and Maruti Suzuki has realised its potential ahead of its rivals, which will only benefit the car maker.
