Hyundai’s Rural Sales Hit Record High in Q3 as SUVs Gain Ground

Hyundai Motor India Ltd has reported its highest-ever quarterly contribution from rural markets, underscoring a structural shift in demand as sport utility vehicles gain popularity beyond urban centres.

Rural markets accounted for over 24% of Hyundai’s domestic sales in the December quarter, the highest level recorded so far, Managing Director and CEO Tarun Garg said during a media call held to discuss the company’s Q3 FY26 performance. “Rural markets continue to be a key growth driver for us,” he said.

The rising rural contribution reflects a steady multi-year trend. Hyundai’s rural sales share has increased consistently since 2019, supported by deeper network penetration, improving road infrastructure, and stronger consumer sentiment.

A notable shift has been the growing preference for SUVs among rural buyers. Garg said rural customers are now choosing SUVs at rates comparable to, and in some cases higher than, urban markets. Hyundai’s overall SUV mix stands at around 67-68%, while rural SUV penetration is slightly higher than that level.

The company has aligned its distribution strategy with this shift. Nearly 70% of Hyundai’s recent dealer network additions have been in rural areas, alongside an expansion of mobile service vans to strengthen reach.

Garg said policy support for rural development, including higher budgetary allocation for roads and infrastructure, has helped sustain demand sentiment. Hyundai has also rolled out targeted rural schemes to tap this opportunity.

The broader Indian passenger vehicle industry has also seen rural demand emerge as a key stabiliser over the past year. After a muted first half of FY26, the market witnessed a sharp recovery in the October-December period, aided by GST rationalisation, festive demand, and easing financing conditions.

While rural markets drove much of the industry’s growth over the past year, recent months have also seen urban demand begin to recover. Garg said this convergence is a positive sign.

“Earlier, it was only rural driving growth. Now urban markets have also started contributing,” he said. “This gives us a double engine, rural and urban, which is very positive going ahead.”

In Q3 FY26, Hyundai sold a total of 195,436 units, up from 186,408 units in the year-ago period. In the domestic market, the company sold 103,004 SUVs, while hatchbacks and sedans accounted for 25,134 units and 18,410 units, respectively.

“On the domestic front, we are well-positioned to drive stronger wholesales in the coming quarters with optimum dealer inventory levels, driven by our disciplined approach and favourable GST tailwinds,” Garg said.

“The momentum is already evident, with January recording the highest-ever monthly domestic sales, registering 9.5% year-on-year growth, alongside the highest-ever total monthly sales including exports, with 11.5% year-on-year growth,” he added. 

During the December quarter, exports formed a substantial portion of Hyundai’s India business, helping offset cyclical softness in some domestic pockets. Its international dispatches rose 21% year-on-year to 48,888 units, while domestic sales were largely flat at 146,548 units.

“On exports, while global uncertainties continue to evolve, our focus remains clear. By leveraging opportunities from the new Venue and exploring new markets, we are confident of sustaining growth momentum in Q4 and beyond.”