Generally, one would always assume that if Indian automobile market is blossoming in terms of sales, it is due to the fact that demand is high in urban areas. This fact becomes all the more relevant when it comes to the festive season as people living in urban areas buy vehicles during this time period owing to the auspiciousness. However, this time around in the Indian auto market, it is rural areas that are keeping auto makers stable. According to reports, car buyers in rural areas of India have not been affected by the slump going on in the market. In fact, statistics suggest that some people living in villages have seen a rise in their incomes, thereby giving them affordability levels to buy new vehicles. Industry experts have found this to be really strange as in most cases, people in urban areas have higher income levels.
Reports claim that a festival was organised in an Indian village by a prominent car company's dealership, which was attended by a high number of families. Not only did they attend the event, some of them also drove home a new car, which had been their dream for quite sometime. It is being said that only urban areas of the country are experiencing the economic slowdown, which has led to their reluctance in purchasing a new vehicle. On the other hand, people living in villages, whose primary activity is agriculture, do not get affected by happenings as they are only concerned by their farm productivity.
Figures can determine the terrific growth rural areas have shown in terms of their contribution in sales of auto makers. According to reports, an incredible 31 per cent of sales of India's largest passenger car maker, Maruti Suzuki, in the first six months of current fiscal has been contributed by rural areas. The same figure in the corresponding period of financial year 2008-2009 was 3 per cent, which signifies the kind of growth in the rural car market. Experts believe that this sort of development will augur well for auto makers, who have had a pretty rough festive season as far as urban areas are concerning.
Statistics suggest that rural areas have shown tremendous growth patterns for a number of car companies. As per reports, year-on-year growth of rural areas for Maruti Suzuki was 24 per cent as compared to 4 per cent for urban regions. Maruti Suzuki's competitor Hyundai and Mahindra & Mahindra have also experienced similar trends, if sources are to be believed. In fact, sources suggest that if non-metro towns and rural had not shown this sort of progress, the decline in Indian car market would have reached double figures
Sources close to this development have said that this progress is likely to give auto makers the incentive to expand their operations in rural regions. The fact that rural areas are helping auto makers to sustain themselves shows the kind of growth taking place. To capitalise on this, car companies are focusing a lot on villages and small towns. In recent times, firms have organised a number of fairs, creating brand awareness through salesmen and making people aware about financing options. Also, setting up of dealerships is something that companies have laid a lot of emphasis on to benefit their performance in the long run.
One thing that is quite noticeable is the definition of rural region is different for various car makers. For a brand like Maruti Suzuki, expansion would be aimed at regions that have a sparse population whereas Hyundai would be targeting cities that do not come in top 100. There are a few other companies, like Honda and Toyota, which refer to these areas as II-tier and III-tier. Analysts feel that whatever the definition maybe, things are changing in the Indian car market for the good. The setting up of huge establishments in small towns has had a direct effect on standard of living of people with several improvements taking place.
