Betting on Eon, Grandi10 and Xcent: Hyundai sharpens rural focus

Rural sales expansion much higher to urban

Korean auto major Hyundai has sharpened its rural focus and aims to get more than one-fourth of its sales from buyers in villages and small towns this year. The second -largest car maker in the country got about 23 per cent of sales from rural markets in 2016 calendar year.

“The focus will be on rural for future growth. We have set up a new department to focus on the rural market. We will create a different communication strategy on the products that are well suited for these markets. Every regional office and most dealership now have a rural team. The matrix has been completed,” said Rakesh Srivastava, director (sales & marketing) at Hyundai.

Increasing rural focus has helped the company to grow the contribution from rural from 14 per cent in 2011 to 23.5 per cent in 2016. This translates into more than 117,000 vehicles in a year. Hyundai believes there is a lot of potentials to grow the rural share further. Market leader Maruti Suzuki gets one-third of its sales from rural buyers, probably the highest for any car maker in India.  

Hyundai’s rural thrust is understandable. In 2016, its urban sales grew less than three per cent to 383,129 units. In the same year, the rural volume grew at a strong 14 per cent. The rate of growth in the rural market has been higher even in 2015 though on a smaller base.

Srivastava said cars like the Eon, Grandi10 and Xcent are sought after in the rural markets. “But upwardly mobile people in the rural market also seek Creta and Elitei20. Volume in rural market is growing along with spend per vehicle. We see an increasing aspiration to own cars,” he said. Interestingly, it is not the company’s entry segment car, Eon, which brings the bulk of the rural sales. The biggest contribution of 26 per cent comes from its bigger hatch, the Grandi10. Also, the contribution from Eon is similar to that from premium hatch Elite i20, both at twenty per cent each. Its popular SUV Creta also brings about sixteen per cent of rural sales.

The company, which is not physically present in interiors of the rural markets in spite of more than 300 rural sales outlets, is exploiting the concept of float vans to market products. A float van has one display car and it communicates about the brand and attractive schemes for the rural buyers. In total, Hyundai has seventy float vans which keep moving in various rural markets. The company also has several advocates of its brand in rural markets from among the owners. They educate locals on the brand and value proposition of Hyundai vehicles. 

Hyundai India MD & CEO Y K Koo (left) and other company officials at the launch of a new compact sedan, Xcent, on Thursday. The firm aims to sell 60,000 units in a year, and the car comes in the range of Rs 5.38 lakh and Rs 8.41 lakh.