Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Chatty Farmers Help Suzuki India Salesmen as GM Enters Cities

The Suzuki logo is displayed on a Maruti Suzuki India vehicle in Mumbai. Photographer: Adeel Halim/Bloomberg
The Suzuki logo is displayed on a Maruti Suzuki India vehicle in Mumbai. Photographer: Adeel Halim/Bloomberg

May 28 (Bloomberg) -- Maruti Suzuki India Ltd. salesman Ram Krishna Upadhyaya goes to a farmers’ market three times a week to find out who has had a good crop and can afford a new car.

“Many people think that the rich only live in cities, but there are lots of people with enough money to buy a car in villages,” Upadhyaya, 33, said in Mankapur, 400 miles southeast of New Delhi. “Also, there’s no competition to sell a car in rural areas.”

India’s largest carmaker more than doubled rural sales last year as Upadhyaya and 4,000 other agents used a personal touch in villages where televisions and newspapers are a rarity. The Suzuki Motor Corp. unit has built a network targeting India’s at least 700 million rural residents as General Motors Co., Volkswagen AG and Tata Motors Ltd. challenge its grip on cities.

“It’s a huge competitive advantage for Maruti,” said Juergen Maier, who helps manage 1.1 billion euros ($1.4 billion) of assets, including Indian stocks, at Raiffeisen Capital Management in Vienna. “Rural markets are difficult to enter as you need the volumes to attract dealers, so it will take some time for new players to get there.”

India’s nationwide auto sales increased 25 percent to 1.53 million in the year ended March, with New Delhi-based Maruti accounting for half the market. Sales may reach 3 million units by 2015, according to the government.

No Ties

Maruti increased the proportion of sales it got from rural areas to 16.5 percent in the year ended March from 3.5 percent two years earlier by reaching out to villagers who hadn’t previously considered owning a car, said Mayank Pareek, managing executive officer in charge of marketing and sales. About half of India’s more than 600,000 villages didn’t have all-weather roads as recently as five years ago, he said.

“We found that many people in villages don’t feel comfortable going to an air-conditioned showroom and talking to a salesman wearing a tie,” he said. “We have seen only the tip of the iceberg” in terms of rural sales.

Maruti fell 1.1 percent to 1,225.20 rupees at the close of trading in Mumbai today. The stock has declined 21 percent this year.

Prime Minister Manmohan Singh is boosting spending on agriculture and rural infrastructure under the “Build India” campaign, designed to create jobs and improve living standards. In China, government efforts including vehicle subsidies helped rural auto sales growth outpace urban areas for the first time last year, according to the nation’s commerce ministry. China passed the U.S. as the world’s largest auto market in 2009.

Market Tent

Maruti has 812 dealers across India, who can operate more than one outlet. Upadhyaya runs a small showroom near Mankapur and also displays cars under a tent each week at the farmers’ market. He sells about 10 cars a month, he said by phone. Sugarcane farmer Karta Ram Paswan bought an air-conditioned Maruti Alto hatchback, costing from 269,713 rupees ($5,700), after Upadhyaya invited him to view cars at the market and helped arrange financing.

“I know the salesman quite well and he has promised to look after any problems,” Paswan, 25, said by phone. “I’ve never heard of Volkswagen or General Motors.”

Maruti faces rising competition, including from Tata, which is working through 100,000 advance orders for the 123,360 rupee Nano, the world’s cheapest car. Other automakers are also pushing into rural markets amid increasing competition in Mumbai, New Delhi and other cities.

GM, Volkswagen

GM plans to have 300 dealerships and a similar number of service outlets in India by the end of the year, up from around 200, said Karl Slym, the head of its local operations. The company expects to open 60 percent of new dealers in towns of 500,000 people or less, he said.

Particularly in small towns, the carmaker wants dealers who are “connected locally,” he said.

Volkswagen, which has 43 dealerships in India now, aims to have 120 by 2012. It began selling the Polo, which costs 434,000 rupees in New Delhi, earlier this year. The carmaker will decide whether to move into rural areas after meeting demand in cities, it said in reply to Bloomberg News questions.

Ford Motor Co. has invested $950 million in a factory in Chennai and introduced the 350,000 rupee Figo this year. It also opened 28 facilities in 24 cities on a single day in February. It aims to have 200 dealerships and service stations by end of the year, from 164 in 97 cities now.

“Other manufacturers are playing catch up,” said John Bonnell, Asia-Pacific director of forecasting at JD Power & Associates. Maruti is “in a strong position and will do well over time.”

To contact the reporter on this story: Vipin V. Nair in Mumbai at

To contact the editor responsible for this story: Neil Denslow at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.