Buzz is back in rural markets after 9 months

After remaining lackadaisical for nearly nine months, rural growth is gradually showing signs of improvement thanks to three key reasons. Real rural wage growth remains strong at 5%, the highest in four years, while nominal wage growth has been largely stable, according to the labour ministry. The hike in minimum support price is the most in the past two years. And, monsoon has been normal for the second year in a row.

India’s largest car maker Maruti Suzuki’s rural sales volume grew 22%, outperforming the total by five percentage points. Hero MotoCorp, which gets half its sales from the rural market, indicated that it’s gradually catching up with urban sales. Mahindra Bolero utility vehicle, sold mostly in rural areas, rose 48% in the first half of FY18 to 41,222 units.

Tractors sales have picked up too with first-half growth at 22% compared with a 20% contraction in the first half of FY16.

On the consumer goods side, Dabur’s rural sales volume rose 15% in the quarter. Marico’s rural growth, in value terms, was 14% compared with 10% in urban areas. Godrej Consumer’s rural growth outperformed that of the urban market.