Hyundai Motor India Ltd expects rural markets to account for 30 per cent of its total sales within three to four years, the managing director and chief executive officer Tarun Garg said. The company is planning two new products in the segment, a mid-size sport utility vehicle and a compact electric sport utility vehicle, which are expected to support the push into smaller towns and villages. HMIL is intensifying its rural focus through network expansion and targeted aftersales services.

In the first quarter of the fiscal year, rural contribution reached 25.9 per cent, up from 22.6 per cent in the same period of the previous fiscal, the company reported. Domestic sales in the April to August period rose to 247,980 units from 220,233 units a year earlier, an increase of 12.6 per cent. Rural growth in quarter one was 23 per cent while urban growth was 2.8 per cent, underscoring stronger momentum outside major cities.

Overall SUV penetration stood at 68 per cent and rural markets showed slightly higher penetration at 69 per cent, reflecting robust demand for higher body vehicles beyond metropolitan areas. The firm attributes the trend to improving road infrastructure across tier two and tier three locations and widespread access to affordable data, which has increased customer awareness and consideration of new models. These structural shifts are shaping product planning and marketing priorities.

Network development is being skewed towards rural areas, with six of every ten new outlets planned for smaller towns and villages and roughly 60 per cent of new network development coming from those markets. The company has deployed more than 100 mobile service vans dedicated to rural customers and continues to expand its footprint with over 1,510 sales outlets and more than 1,670 service centres nationwide. Management expects the combination of product launches and expanded service reach to drive further rural contribution in the coming years.