Maruti's rural sales drive heads for panchayats

In a bid to increase its sales from rural India, the country's largest car maker, Maruti Udyog Ltd (MUL), is offering over 2.1 million functionaries in panchayats (local self-governing bodies in villages) its cars at special discounts.

The offer, titled "Mera Sapna-Meri Maruti," retails the Maruti 800, the Alto and the Omni at a cash discount of Rs 5,000, Rs 4,000 and Rs 3,000, respectively, to panchayat functionaries, who are considered to be influential figures in rural India.

These discounts are in addition to other sops like zero insurance already available in rural markets. The scheme has been launched in Haryana and will go all-India in a few months.

The car maker is also considering offering exclusive after-sales service and convenient payment options.

To combat hardening interest rates on car loans, Maruti has tied up a retail finance pact with 14,000 branches of 196 regional rural banks as well as Mahindra Finance and Magma Leasing for first-time buyers in rural markets. These loans will cost 7-8 per cent.

In the first phase, Maruti has identified 200,000 representatives of the zila parishad and the panchayat samiti to sell the cars to. The target is to sell 15,000 units in the next few months.

MUL executives claim the initial impact of the drive has been felt in the 10 per cent increase in sales of the Maruti 800 in April this year. Sales of the Maruti 800 slid for the past 11 months but the company reversed the trend and sold 6,324 units in April this year.

Rural markets accounted for over 35 per cent of MUL's total domestic sales of 6,35,629 vehicles in 2006-07.