Rural auto demand set for festive revival

economictimes.indiatimes.com:

rural markets — which had remained weak in the past three years due to the economic impact of the pandemic — are revving up and expected to spur demand for passenger cars, motorcycles and tractors as the country heads into the festive season later this quarter. Moderating rural inflation, higher non-agricultural income and an increase in minimum support price for all kharif crops are expected to put more money in the hands of consumers in rural markets, boosting demand and bridging the divergent recovery seen in the country since the easing of Covid, said several senior industry executives.

The country's largest carmaker, Maruti Suzuki, saw sales of passenger vehicles rise 14% in rural areas last quarter, outpacing an 11% increase in urban centres. Shashank Srivastava, senior executive officer (marketing and sales), Maruti Suzuki, told ET: «Rural markets are reasonably strong.

There was some (rain) deficit early on, but now with the spread of the monsoons, demand should remain healthy going ahead.» The company is «keenly watching the monsoon spatial pattern this year in light of the El Nino phenomena to see if it would adversely impact agricultural output that is so crucial to good rural sentiment», he said. Rural markets account for 43.5% of sales at the manufacturer of the Swift, Belano and Brezza.Hindustan Unilever, the county's largest consumer goods company, has also indicated an uptick in the rural markets.

«Rural market volumes which at one point were declining in double digit has just been positive in this quarter,» said chief financial officer Ritesh Tiwari. While Tiwari cited the base effect as one of the reasons for the pickup, he also stressed on the need to be watchful of the progress of monsoon and