Hyundai's Sales Surge, SUVs Rule Rural India!
In January-April 2024, SUVs dominate rural India as evidenced by Hyundai's remarkable sales surge. Join us in this insightful exploration as we dissect the factors behind this SUV revolution, uncovering the driving forces reshaping the automotive landscape.
"Explosive Growth: Hyundai's Sales Surge, SUVs Rule Rural India!"
During January-April 2024, the top three selling vehicles in India were all SUVs. This marked the first time the small car Stupendous i10 was overtaken in the rankings, according to a report by The Financial Times. The shift underscores the increasing desires and purchasing power of rural buyers in India. Competitors such as Maruti Suzuki, Tata Motors, and Honda are also seeing growing demand for more expensive SUVs in rural areas.
Improved digital accessibility and income equality are narrowing the consumer preference gap between urban and rural areas. In the first four months of this year, SUVs like the Exter, Scene, and Creta accounted for 67% of Hyundai's rural sales, doubling their share from around 2020.
"The income gap between car buyers in rural and urban areas has decreased significantly in recent years," said Tarun Garg, chief operating officer at Hyundai Motor India, citing data from ET. "In just the past year, we have seen the number of first-time buyers increase by 300 basis points to 44 percent in rural areas."
In the last fiscal year, SUVs comprised 70% of Tata Motors' rural sales, while for Maruti Suzuki, rural areas accounted for 43% of Brezza sales, its top-selling SUV. Honda Cars India also reported that one-fourth of sales for its new SUV, Raise, came from Tier III and neighboring markets.
Carmakers attribute the surge in rural SUV demand to rising incomes, aspirations, and improved roads. Garg noted that increased rural infrastructure development, better road connectivity, and higher disposable incomes are fueling aspirations and, consequently, strong SUV demand in these markets.
The Reserve Bank of India defines rural areas as those with populations under 49,000 (Tier III-VI). A study by the State Bank of India (SBI) indicated that rural poverty declined by 440 basis points between FY19 and FY23, compared to a 170 basis point decrease in urban poverty, narrowing the rural-urban gap. Rural poverty fell to 7.2 percent in FY23 from 25.7 percent in FY12, while urban poverty decreased to 4.6 percent from 13.7 percent over the same period.
What's Your Reaction?
