Car companies sense pleasant monsoon drive in India

The prospects of a good monsoon have revived hopes of carmakers in rural markets, where sales had languished following the government’s demonetisation drive last November. India’s largest automaker Maruti Suzuki, which saw rural sales grow by 17 per cent last year, expects the momentum to continue this fiscal as well. Rural sales account for a third of its domestic volumes. RS Kalsi, Executive Director (Sales & Marketing), Maruti Suzuki India, said, “Rural sales are showing an upward trend. In the first quarter of the last financial year, our sales in rural areas had grown by 1 per cent, which increased to 25 per cent by the fourth quarter of FY17. With normal monsoon forecast this year, we expect the momentum to continue.” Maruti’s sales in rural markets declined by 11 per cent last November in the immediate aftermath of demonetisation. With cash availability improving subsequently, rural sales increased by 18 per cent in December, and 17 per cent for the entire financial year (2016-17).