The Hindu Business Line : Hyundai gears up for rural market

WITH an eye on the increased demand emanating from semi-urban/rural areas for cars, Hyundai India is betting on tie-ups with varied organisations to expand its reach in these areas.

The company has seen a growing percentage of its sales coming from these areas, with its luxury sedan Sonata showing a significant leap in demand in the past two years.

Currently over 30 per cent of Hyundai's sales come from the semi urban/ rural markets, compared to about 26 per cent two years ago.

The demand for its cars in these areas can be seen across the segments. Currently, 33 per cent of sales for the compact car, Santro come from semi urban/ rural markets compared to 29 per cent in 2001. In the case of Accent, it is 26 per cent compared to 22 per cent in 2001. For the Sonata, about 13 per cent of sales are now rural/semi-urban based against 7.5 per cent in 2001.

As a result the company is looking to offer attractive finance schemes and better its service network to consolidate and increase penetration in these areas.

Says Mr WS Min, Executive Director - Marketing and Sales, Hyundai Motor India Ltd (HMIL): "As we penetrate semi urban/rural markets, we have to live with the fact that organised retail financing is not very strong in these markets and nationalised and PSU banks are the primary financial services providers. We have tied up with Punjab National Bank for car loans and this is in addition to the tie-ups with SBI subsidiaries such as State Bank of Mysore, and State Bank of

Travancore, and other financial service providers such as Sundaram Finance, Mahindra Finance and Bank of Punjab, who have a strong rural consumer base."

Speaking about the high growth for cars being seen in these markets, Mr Min says, "Increasing educational levels and the satellite revolution have ignited a new consumerism wave in these markets. Good monsoons, new cropping patterns and availability of easy finance has put more disposable income in the hands of farmers. There is also a desire to keep abreast of their city counterparts".

Meanwhile, for extending the reach of its service to these areas, Hyundai has also tied up with Indian Oil Corporation (IOC) to set up service points. "The tie-up with IOC will give HMIL access to set up 'Authorised Service Points (ASPs)' that will be housed in identified IOC outlets across the country. These ASPs will be manned by a well-equipped Hyundai trained technician and will be able to provide emergency care for Hyundai cars. We expect such outlets to come up on every important state and national highway over a period of time," says Mr Min.

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