Hyundai targets rural markets to drive growth in India
What's the story
Hyundai Motor India Ltd (HMIL) is betting big on rural markets, with plans to generate 30% of its total sales from these regions in the next three to four years. The company's Managing Director and CEO Tarun Garg said in an interaction. He said that HMIL's overall SUV penetration stands at 68%, while it is even higher at 69% in rural areas.
Growth plan
Expanding network in rural areas
To tap into the potential of rural markets, HMIL is focusing on network expansion.
Garg revealed that six out of every 10 new outlets are being opened in these regions.
The company has also launched more than 100 mobile service vans exclusively for rural customers.
These initiatives are part of HMIL's strategy to strengthen its presence and cater to the growing demand in India's hinterlands.
Sales performance
Rural market growth and domestic sales performance
In the first quarter of this fiscal year, rural markets contributed 25.9% to HMIL's sales, up from 22.6% in Q1FY26.
The company's domestic sales during the April-August period stood at 2,47,980 units, a growth of 12.6% over the same period last year when it sold 2,20,233 units.
Garg said that rural market growth in Q1 was an impressive 23%, while urban growth lagged behind at just 2.8%.
Market potential
Improving road infrastructure and data access driving demand
Garg explained HMIL's bullish outlook on rural markets by highlighting the continuous growth of road infrastructure in India.
He pointed out that there is hardly any difference between Tier 2, Tier 3, and Tier 1 road infrastructure these days.
This development, along with affordable data access in rural areas, is driving the demand for HMIL's products such as SUVs.