The share of rural sales in Maruti Suzuki’s total sales rose during the pandemic to 41 per cent in October from 38.5 per cent a year ago

While the rural sales growth has been happening over the past seven to eight years, post pandemic this growth story will continue to run its course while sales from urban centres might slow down because of decreasing income levels.

Talking to The Telegraph, Shashank Srivasta, head of sales and marketing, MSIL said: “During the pandemic rural sales have grown because of a number of factors. Since rural economy is largely dependent on agriculture, a good monsoon, excellent rabi crop and the relatively less spread of the virus in rural areas has helped in the continued growth in sales. While urban centres have witnessed a contraction, rural sales grew by 3 per cent.”

With the average rainfall at 891mm, which is a seven per cent increase over last year, rabi crop production was at 152 million tonnes, which is a six per cent rise from last year’s 134 million tonnes. Except barley, urad and moong dal, there has been a good growth in cereals and pulses. The government has raised the minimum support price of rabi crops.

Besides, the area under kharif crops has increased to 11,000 lakh hectares from 10,050 lakh hectares last year.

“All these factors combined with the fact that Covid concentration is in urban areas will contribute to the rural growth story in 2021 too. While it is hard to predict how the urban centres will perform next year given the GDP fall, one can safely say that rural growth will continue,” said Srivastava.

Share of rural sales has been increasing because of the greater motorisation of the country, spread of income, better infrastructure and more roads.An increasing need for mobility and greater integration brought aspiration levels of rural India closer to urban India, said the marketing head. Post pandemic income levels of urban India will come down as the urban economy is more dependent on services and manufacturing.

To make the most of this rural growth story, MSIL will continue to expand its network. “At present we cover 3.5 lakh villages where we sold at least one car. But India has 6.5 lakh villages. Digital sales has definitely picked up even in rural areas but we still need to have a physical showroom because people while making a high value purchase will want to see the vehicle before they buy,” said Srivastava.

Talking about the need for a rural portfolio of cars, he said: “Our Eeco vans and small cars including the Alto and Wagon R sell well in the rural areas.”

Asked if the absence of diesel will hurt Maruti in its rural penetration, Srivastava said: “Barring a few places like Punjab and Telengana, all other places have switched to petrol following the BS VI adoption. We are also communicating with our customers about the positives of petrol vehicle.”