Rural green shoots for automakers as demand surges in June 2020

At a time when the automobile sector is witnessing an unprecedented sales disruption due to COVID-19, rural markets have brought some cheer. While the urban customers continue to face unprecedented income uncertainty due to widespread job losses and consequent income disruption, the uninterrupted rural economy is where green shoots have appeared, which has resulted in a cross section of vehicle dealers, manufacturers and financers wooing the rural customer.  Following a stringent nationwide lockdown in the months March and April, partial manufacturing and sales of vehicles began in May. The month saw most activity across showrooms of entry level bikes, used vehicles and tractors. In June, the rural-urban divide only amplified, with entry level cars and bikes as well as tractors and even small commercial vehicles staging a smart recovery. The country’s largest two-wheeler maker, Hero MotoCorp, sells one in two vehicles to rural customers. A sharp recovery in sales in June doesn’t come as a surprise, since the rural focus of the company has always been strong besides its large presence in the entry level segment. Hero sold 450,744 units last month, posting a record sequential growth of over four times over May when the company had dispatched just 112,682