Rural India is the new battleground for car brands. All major players are slugging it out in the country's hinterland in search for potential car buyers.

Ask Mayank Pareek, managing executive officer of Maruti Suzuki India. He will tell you which is the best place to source quality turmeric, delicious mangoes and apples, fine cut granite, blue marble pottery or even fresh catch fishes. Country's largest carmaker's sales & marketing head and his team is on a major mission to identify the niche rural customers having potential to buy cars. Pareek makes it a habit to travel about 1,000 km on road every month across the country in search of unexplored locations and areas to connect with people and identify opportunities.

Even in the recent past, small towns and rural areas were a not a priority for most of the carmakers for years as they were happy, in their comfort zone, that the swelling affluent population in metros and big cities would keep the growth momentum alive for long.

While additional growth potential in cities and metros pose several emerging challenges, small towns and rural areas have spawned potential future growth opportunities for car brands. With increasing government policy interventions, big push to rural credit, and higher income levels, besides lower car penetration levels, these small towns and rural areas have become a market to be now taken up seriously by the car brands.

Although these areas were just a possibility a few years ago, now they have turned into potential targets and 'go rural' mantra has gathered momentum.

"Rural market contributes 35% to industry sales now," said Arvind Saxena, director-sales and marketing, Hyundai Motor India.

Companies like Maruti, Hyundai, General Motors, Toyota and Ford are adopting various strategies and initiatives to tap the rural potential. Besides network expansion, roll out of compact cars has been aiding the emerging players like Ford and Toyota to penetrate more into rural areas.

"Minimum support prices of most commodities have risen 100% over the last couple of years leaving more cash with farmers. Besides, growing aspirations of rural folks, global exposure is also driving car sales in rural areas," said Pareek.

"These smaller towns and rural areas also don't have issues such as traffic congestions or lack of parking space being faced by the cities and metros. Since more wealth is being created in these areas, we anticipate significant opportunities for growth," said Michael Boneham, president and managing director, Ford India.

Here are some impressive growth figures of select brands: For Maruti, overall sales declined by about 11%, but rural markets have grown by 10% this year. About a third of total sales came from rural markets for Hyundai in 2011. Ford garnered about 50% of sales from tier II, III and IV locations. General Motors gets about 60% of sales from non-metros, with a year-on-year growth of 15-20%.

Besides penetrating deeper into every nook and corner of the country, Maruti is also on a drive to identify niche customer segments having significant disposable incomes. This cluster or niche approach will tap the potential customers among turmeric farmers of Erode, Alphonso growers in Ratnagiri, granite industries in Andhra, blue pottery makers in Jaipur, fishermen in Howrah, among others. The company has so far identified over 270 such niche customer segments.

Moreover, Maruti has over 35 offices across the country to expand the business in these areas. Target for each office is to add at least one niche or cluster every month. While Maruti has already made strong inroads into tapping rural customers through its range of models and vast network, other companies have chalked out aggressive plans as well.

"Vehicle industry is yet to fully tap into the demand in rural areas. Previously, consumers from these areas would go to automobile dealerships in the nearest towns and cities to purchase a vehicle. In the recent years, market players have turned to the rural markets as well and have received encouraging response. There has been a gradual but steady growth in demand for passenger vehicles in rural markets," said Sandeep Singh, deputy MD-marketing, Toyota Kirloskar Motor.

Admitting that the potential is strong in smaller towns and rural areas, P Balendran, vice president-corporate affairs, General Motors India, said increasing income levels, changing lifestyle, financing options, product options suiting everybody's requirements and improving facilities, among others, have turned these locations into good consumption centres.

"Our rural sales, which accounted for little over three% in 2007-08, now constitute over 26% of overall sales. We have big focus on rural areas. "For example, there are 210 taluks in Tamil Nadu (and we are present in each and every taluk and rural contributes about 35% of sales in that state," said Maruti's Pareek.

Hyundai assesses purchase trends through surveys and chalk out strategy accordingly. "We offer special customised finance schemes to rural customers. Rural promotions are done through mobile vans in mandis and fairs besides test drives and free check up camps," said Saxena. "Our strategy is to encourage our dealers to open more sales branches in smaller markets where full-fledged dealerships are not viable. We, currently, have 340 dealerships and more than 1,000 rural sales outlets across India and we will further increase the number this year," he added.

Toyota's Singh said the company studies size of the market in these locations and estimate the potential demand for our products in these areas. "We also gauge the expectations and aspirations of the customers in these areas in terms of proximity (of outlet) sales and service," he added.

It is looking at improving its reach and is targeting at setting up additional 25 outlets in semi urban and rural areas this year. The rural sales constitute a very small portion of its total sales currently. Last year, 10% of the total sales constituted of sales in rural areas. "We plan to bring this up this year especially with the latest introduction of Etios and Etios Liva. Innova is our bestseller in rural areas," he added.

General Motors also undertake customer mapping exercise, various surveys to understand the customer profile, buying patterns, their specific requirements, competition presence and the volume they generate and financing options before opening outlets. As on today, we have some 279 sales points and 272 service outlets across the country and our intention is to put in place 300 sales points and an equal number of outlets by the close of this financial year. There is now renewed focus on rural marketing initiatives.

Ford's Boneham said the company has been closely working with its retail banking partners to target the rural customers besides opening more service points closer to the people in tier III and IV cities. Ford has a pan-India network of 230 sales and service outlets in 123 locations. Of this, over 40% of the sales and service network is in tier III and tier IV cities.

Some of highest selling car models small towns and rural areas include Maruti's all compact models up to Swift, Hyundai's i10, Santro and Eon, Ford's Figo, General Motors' Spark, Beat and Tavera and Toyota's Innova and now Etios models, according to the carmakers.