Maruti Suzuki India has announced achieving a new sales milestone, whereby the company's total sales from the rural market has now crossed the 50 lakh units mark. With over 1,700 customised retail outlets in the rural areas, the sales contribution from these tier-2 and tier-3 markets accounted for nearly 41 per cent of the company's total sales in Financial Year 2020-21. To give you a perspective, in FY 2008-09, the sales contribution from the rural market stood at 10 per cent.
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Commenting on the new milestone, Shashank Srivastava, Senior Executive Director (Marketing & Sales), Maruti Suzuki India, said, "Rural markets have a very special place in our business. Over the years, we have carefully studied the needs of this segment. While the aspirations of upcountry customers are very similar to those at metros, they demand more attention and care. We adopted the philosophy of 'Go Local' with 12,500 specially trained dealership personnel called Resident Dealer Sales Executives (RDSE), who understand the local culture and traditions to fulfil the expectation of these customers."
From 10 per cent in FY2009, Maruti Suzuki's sales contribution from rural market has risen to 41 per cent in FY2021
Commenting on the important role that the rural market plays for the auto sector, Sridhar V, Partner, Grant Thornton Bharat LLP. says, "Rural economy has been fuelling the demand across many consumer segments and its impact on the auto sector is no surprise. Some of the key factors playing an enabler are good road network, increase in purchasing power, availability of good financing means and aspirational needs of a consumer. Apart from this the widespread service and dealer network, marketing and information reach through various media, choice of vehicles at different price points and the introduction of subcompact & compact SUV's have facilitated the growth for many of the leading players. Considering the fact that the majority of the prospective consumers are located outside the Tier I towns the rural potential is still untapped. The largest player in the PV market has established that this is a market which is growing by leaps and bounds and cannot be ignored."
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Auto industry expert, Avik Chattopadhyay, said, "Maruti is a pioneer when it comes to creating and deploying a "relevant rural" strategy. While they might state 2008 was the starting year, I personally have experienced it much before with the strong participation in prominent rural fairs and events. If Maruti is to play the true role of 'democratising mobility in India', rural is critical to make it happen. And Maruti saw these 'white spaces' in the marketplace long before the others, interestingly even before Tata and Mahindra who traditionally should have had a better rural footprint given their vehicle portfolios." He further added, "Till now, all that MSIL has done for rural market creation and penetration has worked for it. The "first to market" move has worked very well. The only chink in the armour could be the "aspirational" level of the badge as it seems to be losing a bit of sheen when compared with a Hyundai and a resurgent Tata."
Maruti Suzuki has worked on several marketing campaigns and various local-level engagement initiatives focused on rural buyers
Talking about the company's rural strategy, Srivastava said that in 2008, when the urban market was affected by the global financial crisis, Maruti Suzuki strengthened its strategy with a focused and structured approach towards the rural hinterland. The company worked on several marketing campaigns and various local-level engagement initiatives focused on rural buyers. In fact, recently the company has also introduced Nexa, Maruti Suzuki's premium channel in upcountry markets, to address the changing aspirations of the rural customer.
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At the same time, commenting on how rural sales have helped balance the losses in the urban market, Sridhar said, "Rural market has also been a counter magnet for the volumes in the urban market whose growth can be incremental. Most players are dependent on the second and third vehicle options, though some real growth can also be seen coming from new entrants in the employment scene, migrant or not."
Maruti has set up more than 4,000 service touchpoints which include 235 'Service-on-Wheels' to provide after-sales support to the customers
Right now, Maruti Suzuki claims to have one of the largest rural networks which help it reach the diverse regions of India. The company has set up more than 4000 service touchpoints which include 235 'Service-on-Wheels' to provide after-sales support to the customers. The company has also trained Resident Dealer Sales Executive (RDSE) who understand the need of local customers, maintain interpersonal relationships with customers and educate them about our latest offerings. The company claims this has not only helped them reach rural customers but also play an important role in understanding markets and deeper reach to build new customers.
