By Sharmistha Mukherjee

Copyright indiatimes

AgenciesSenior industry executives told ET affordability has risen in rural areas on account of GST rate rationalisation.

Sales of cars, motorcycles, televisions, beauty products and premium watches are booming in rural markets, having more than doubled in several categories during Navratri (September 22-October 2), indicating a revival in demand at the entry level following the goods and services tax (GST) overhaul. Maruti Suzuki, Hyundai and Tata Motors have seen car sales grow 100-133% during Navratri from before the GST reform that rolled out September 22. Bookings for two-wheelers are also rising, companies said. Tractor sales are set to increase 30-40% in September, boosted by robust billings in the last five days, according to industry estimates, despite dispatches largely being on hold in the first three weeks of the month. Bookings for the country’s largest carmaker doubled in rural areas. “Beyond top 100 cities, we are seeing booking growth close to 100%,” said Partho Banerjee, senior executive officer, marketing and sales, Maruti Suzuki. Nationally, the company’s bookings have risen 35%. Good Monsoon, Harvest“We have witnessed a sharp surge in customer interest and demand across rural India,” said Tarun Garg, whole-time director and COO, Hyundai Motor India (HMIL). “During September 22-25, bookings from rural markets rose nearly 133% compared with the pre-reform period (September 1-21).”In the first four days of Navratri, HMIL saw a 1.5-fold growth in enquiries, and a doubling in rural bookings, versus the same period last year, indicating both heightened curiosity and strong conversion, Garg said.Live EventsSenior industry executives told ET affordability has risen in rural areas on account of GST rate rationalisation. This, coupled with an increase in sowing, good monsoons and higher crop prices, has led to buoyant consumer sentiment.Smaller towns are driving most of the growth for ecommerce platforms, according to data available with Amazon and Flipkart, which are currently running festive sales. The online sales of TVs, for instance, have been double that recorded in urban areas this Navratri.“The way online marketplaces have dropped prices during the ongoing Navratri sales, consumers in smaller towns and rural India will not get such lucrative pricing in stores there,” said Avneet Singh Marwah, chief executive officer of online-focused television manufacturer Super Plastronics. “Hence, even absolute sales are more in tier II-IV markets than metros and tier I cities.”His company sells televisions under the Kodak, Thomson and Blaupunkt brands.In the two-wheeler segment, where demand has languished so far this fiscal, market leader Hero MotoCorp has started seeing an uptick. The price reduction on account of the GST reset has been significant and benefits have started accruing, said Ashutosh Varma, chief business officer.“You have seen good monsoons, reservoirs are full, no extensive damage anywhere, barring one or two places, tractors are growing strongly,” he said. “Every time tractors do well, you have seen two wheelers doing well. We are very confident that this will be one of the best (festive seasons).”Varma said urban and rural demand are strong. “The rural demand is expected to get even better through the course of the festive season as harvesting gets completed,” he said. Rural markets account for as much as 55% of sales.With the tax recast, the two-wheeler industry is expecting to grow 7% in FY26. Two-wheeler sales dropped by about 1% to 8 million units in the first five months of the fiscal year, prior to the tax cut.“There is an awareness among rural consumers that in addition to tax cuts, there are attractive festive offers,” said an industry executive. “However, stocks are limited because of limited dispatches in September. If they do not make purchases or bookings right now, they will not be able to take deliveries in their preferred mahurat (auspicious period).”Retail momentum in rural markets will strengthen in the coming days, said Amit Kamat, chief commercial officer, Tata Motors Passenger Vehicles. “The festive season, coupled with pent-up demand and the recent GST rate cut, has fuelled strong momentum across rural markets for us,” he said. “Our booking rate has doubled post the new price announcement…with festive sentiment rising, we anticipate retail momentum to strengthen further in the coming days.”In addition to strong demand, Kamat said the company is also seeing rural customers steadily upgrading to cars that offer enhanced safety, premium features and advanced technology. Electronics companies too are noticing a demand for premium products in rural markets, outselling those in the entry to middle segments.Amazon said that in rural markets, smartphones have reported strong double-digit growth–the segment above ₹20,000 is up 50% from the year earlier. QLED TVs are up 23% and mini-LED TVs by 27%. Lab-grown diamonds have reported a 10-fold growth in sales, South Korean beauty products have tripled and premium watches have risen 1.5-2 times in this period.Sales of apparel have improved since the weekend with Dussehra around the corner, said Lalit Agarwal, managing director of small town and rural focused value fashion retail chain V-Mart Retail.“However, we need to monitor as the excitement is more for large-ticket items like electronics rather than fashion,” he said.The government reduced GST rate on small cars, measuring less than 4 metres and up to 1,200cc engine capacity for petrol/CNG/LPG and up to 1500 cc for diesel, to 18% from the earlier 29-31% (GST of 28% and 1-3% compensation cess) with effect from September 22. The tax cut has resulted in net benefits of 8.5-9.9% for car buyers. Together with promotional offers and festive schemes, price advantages on passenger vehicles on average are currently at an all-time high of 12-15%.Add as a Reliable and Trusted News Source Add Now!
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