Rural Focus Helps Keep Maruti Suzuki on Top in India

MUMBAI –  A growing portfolio and attention to India’s rural markets are helping Martuti Suzuki hold fast to its position as the country’s leading automaker.

Indian light-vehicle sales declined 1.9% to 2.99 million units in calendar 2014, according to WardsAuto data, but Maruti deliveries rose 8.3% to 1.15 million. In the automaker’s fiscal year ending March 31, sales totaled 1.17 million. More than one-third of those sales – 415,380 – came in rural areas, a 23% year-over-year improvement.

Indian automakers operate outside major cities through a network of some 4,000 resident dealer sales executives. Maruti increased its rural presence about 34% in the last fiscal year to cover about 125,000 of India’s 600,000 villages, and is working to raise that figure to 150,000.

This increase has not come at the expense of Maruti’s urban network, which it grew 23% to 1,619 dealerships in 1,290 cities.

Maruti has learned personal involvement, not sophisticated showrooms or celebrity endorsements, is the key to attracting customers. A village fair attended by Managing Director Shinzo Nakanishi drew 8,000 visitors who examined vehicles on display. In Punjab, the automaker collaborated with the government to run 32 driver’s training schools that attracted 10,000 participants (and potential car buyers) in the program’s first two years.

Chairman R C Bhargava predicts Maruti will exceed the industrywide growth rate of 6% to 8% predicted by the Society of Indian Automotive Manufacturer, citing an improving economy, stable commodity prices, favorable foreign exchange rates and launches of three new models and a half-dozen facelifts or variants.

The new models, all due in showrooms by March 2016, are Maruti’s first SUV, the S-Cross, which will compete with the Renault Duster; a multipurpose vehicle called Super Carry; and a premium hatchback codenamed YRA. The facelifts or variants are the popular Dzire compact sedan, the Ertiga compact MPV, the Ritz compact hatchback, Eeco van and Celerio and Swift diesels.

Maruti all told offers 13 models with more than 80 variants. Prices range from Rs290,000 ($4,675) for the entry-level Alto 800 hatchback to Rs1.4 million ($22,175) for the Ciaz midsize sedan. The automaker also has six models in its lineup that run on either gasoline or compressed natural gas; sales of those vehicles approached 69,000 units last fiscal year, a 23% increase.