Maruti eyes presence in 100,000 villages by March

Rural sales -- which accounts for about 30% of the company's total sales -- have grown by 18% in the Apr-Nov period this fiscal: MSI Chairman

As the going gets tougher in the Indian auto industry, Maruti Suzuki India (MSI) is driving into the rural markets to boost sales.

The company, which devised a plan to tap rural markets five years ago, is planning to have presence in a total of 100,000 villages across the country by March next year.

"The industry has seen a decline in sales by about 4-5% this year. On the other hand, rural sales -- which accounts for about 30% of our total sales -- have grown by 18% in the April-November period this fiscal," MSI Chairman R C Bhargava told reporters here.

He said had it not been for the rural market, the company would have had an even tougher time and "we would have been in similar mess like the rest of the industry" as demand in urban areas has slowed down by 5-6%.

"We have been giving emphasis on rural markets. Last year, we had covered 44,000 villages and till November this year, we have presence in 60,000 villages and by March next year, we will have presence in one lakh out of a total of 6.51 lakh villages in India," Bhargava said.

At present, MSI has a total of 700 rural outlets, which are accompanied by workshops that are authorised to carry out repairs under warranty to an extent.

In addition, it has 650 mobile vans that has helped in servicing even at the customers' home, he added.

Commenting on the overall market situation, Bhargava said the market continues to be down due to the overall condition of economy and the political situation.

"In terms of retail sales, for the fiscal till November we are 1% up from that of last year. We are hopeful that we will be able to match last fiscal's numbers," he said.

Commenting on exports, Bhargava said the company will fall short marginally due to changing policies in some of the key markets like Sri Lanka and Algeria.

"We were aiming 1.2 lakh units of export this year, which we think we will fall short. All overseas markets have uncertainties associated with policies and economy," he said.

Asked about future expansion, specially the company's Gujarat plant, he said the project is currently "in cold storage" at the moment.

"There is no point in creating additional capacity when there is no demand. We have the land, boundary wall has been erected but we are not undertaking any capacity creation. We have not decided when we will start work at the Gujarat plant," Bhargava said.

He said the company will wait and watch for the outcome of the upcoming general elections next year and what steps the new government takes in order to boost economic growth and manufacturing.