Rural Areas Drive India's Auto Market Forward

India has grown a lot in 2010 and carmakers who are selling cars in the country instantly tried to benefit from the huge potential the local auto market has when it comes to new car sales. Suzuki, Volkswagen, Ford, General Motors and other companies pumped a lot of money into local operations and investments are very likely to continue this year as all auto producers expect further increases in the country.

But where does the huge market increase come from in India? According to a report by Rush Lane, a part of the boost the country has experienced in 2010 comes from rural areas, as more and more people living in these zones have purchased a new car. Maruti, Hyundai, General Motors and Mahindra recorded surprising sales in rural markets and figures are predicting a bright future for this particular areas.

20 percent of the sales posted by Maruti Suzuki came from rural markets, although statistics prove that only 2.3 percent of those living in non metro markets have purchased a new vehicle. Although 10 percent of urban residents are now driving a car of their own, 63.5 percent of the rural buyers pay for the new cars they buy in cash, the aforementioned source notes.

Such a boost obviously leads to increased interest from companies that are willing to invest in the country and Ford is probably the best example in this direction. The US-based auto manufacturer has already announced that its Indian best-seller Figo will be exported from India into 50 other countries, while other products will be based in a higher percentage on parts manufactured in local plants.

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