Regarding sales from rural markets, Maruti Suzuki, Hyundai Motor, Tata Motors, and Renault India had their highest-ever percentage in 2023. Inflationary pressures impacted rural consumers’ demand for consumer durables and fast-moving products, while double-digit growth was seen in rural auto sales.
Maruti Suzuki, Hyundai Motor, Tata Motors, and Renault India posted the highest-ever share of sales from rural markets in calendar year 2023 amid improving consumer attitudes and higher liquidity among the rural rich. Nonetheless, rural consumers’ desire for durable goods and fast-moving consumer items was affected by inflationary pressures.
The country’s largest automaker, Maruti Suzuki, saw a 45% increase in its rural sales share in CY2023, while Hyundai, Tata Motors, and Renault India saw 19.1% and 40% of their rural sales, respectively.
It has been observed by ET that even in rural markets, there is a disparity in income between different consumer groups, which has been driving demand towards the top end of the market. Over the coming quarters, it is anticipated that this demand will finally trickle down and create a broad-based recovery.
“Rural areas grew by 10.4% last year, surpassing urban centers (at Maruti Suzuki).” The company’s greatest level in many years, our rural penetration is now at 45%,” Maruti Suzuki’s senior executive officer of marketing and sales, Shashank Srivastava, remarked. Sales of Swift and Celerio automobiles increased by 7.3% in urban areas at the company last year. 2.73 million Maruti Suzuki vehicles were sold in the region in 2023.
Tarun Garg, COO at Hyundai Motor India concurred, “Rural (demand for cars) continues to be strong. The government’s focus on developing Road infrastructure, increased crop minimum support prices, and regular monsoons have given customers more disposable income, boosting car sales.”
The third-biggest automaker, Tata Motors, recorded its highest-ever sales proportion from rural markets in 2023. Over the year, the company’s sales increased by 10%, accounting for 40% of overall volumes. Tata Motors’ total PV sales increased by 5% in the previous year.
In the last ten years, the 1.4 billion-person country of India has relied more and more on sales of branded everyday necessities items from rural areas, where over 800 million people live and whose purchasing patterns are strongly influenced by agricultural output. But demand in rural areas, which was expanding twice as quickly as in metropolitan areas, has decreased during the last three quarters. Due to rising rural inflation, sales of FMCG and consumer durables have been under pressure, significantly reducing discretionary spending among cost-conscious consumers.