Hyundai India eyes record rural sales: expects 20% contribution to total sales

Rural India played a pivotal role in the remarkable surge in passenger vehicle sales during FY24, as indicated by sales data from the Society of Indian Automobile Manufacturers. Despite a decline in hatchback sales, traditionally a key driver in the Indian passenger vehicle market, the industry achieved a milestone by selling 40 lakh PVs for the first time in a financial year, following the registration of 41.2 lakh passenger vehicles in CY23.

Now though, Hyundai Motor India anticipates that sales from rural areas will continue to reach record levels in the current fiscal year, a report by PTI stated. This expectation is based on several factors, including the anticipation of a favourable monsoon, according to a senior company executive.

The automaker, the country's second-largest, reported an 11 per cent growth in rural areas in the last fiscal year, compared to a 4 per cent growth in urban centres. "We are confident that the contribution from rural markets to our total sales will grow further to around 20 per cent this financial year," said Tarun Garg, COO, Hyundai Motor India.

Hyundai plans to expand its presence in smaller towns, believing that the progress of both rural and urban regions is essential for the nation's prosperity. Garg highlighted that rural sales accounted for an all-time high of 19 per cent of the company's total sales in FY23.

In FY23, Hyundai Motor India achieved its highest-ever total sales of 7,77,876 units, with a year-on-year growth of 8 per cent. The company also reported its highest-ever domestic sales since inception, reaching 6,14,721 units in FY24.

Garg attributed this growth to increased access to information and internet penetration, leading to a transformation in rural consumer behaviour and rising aspirations. He emphasised that this growth is fueled by the government's emphasis on infrastructure development, rising income levels in rural areas, and favourable monsoon conditions.

Over the last five years, the company's rural network has grown by 33 per cent, compared to an 11 per cent growth in urban outlets. Currently, 40 per cent of Hyundai's total sales outlets are located in rural markets, with plans for further enhancement of the rural network in the coming years.

To capitalise on the momentum of rural growth, Hyundai has implemented various initiatives, including Grameen Mahotsav, improved collaborations with financiers, showroom-on-wheels, hyperlocal marketing, mobile service vans, and rural sports partnerships. These efforts aim to enhance brand recall and drive sales in rural markets.