Auto companies target smaller towns as rural sales growth beats urban

The road infrastructure in rural areas is improving, leading to better demand for vehicles, OEMs say.

Passenger vehicle (PV) sales growth in rural areas has consistently outpaced urban areas for several years, prompting original equipment makers (OEMs) to expand networks in smaller towns.

On a high base of 4.2 million PVs sold in 2023-24 (FY24), the industry projects moderate 3-5 per cent overall growth in the sales for FY25.
 

“Even during the pandemic years, when the urban growth was negative, rural PV sales were positive. Rural sales are now 32-33 per cent of overall PV sales at an industry level, and thus they are a significant volume that no one can ignore,” said Shashank Srivastava, senior executive