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Tapping the Rural Market- Tata Motors brings in Project Neev

Project Neev is Tata Motors rural initiative to discover potential markets in especially rural area and thereby empower the population. The project started off with only just three states in the year 2010 and has reached to 11 states like Uttar Pradesh, Bihar, Madhya Pradesh among others and covering over 60% of the total market.

  • Neev’s network expansion is happening through Tata Gramin Mitras, third-party outlets called Tata Kisan Mitra and an informal network of important local influencers. According to Tata Motors, nearly 80,000 vehicles have been sold through Neev yet. The project however covers rural areas with population of less than 50,000 and investments are also done quite prudently.
  • Also, the monthly outflow for a Neev outlet can come up to Rs. 20,000 to 30,000 and requires an investment of Rs. 45-50 lakh (except land cost). In this project, according to Tata Motors, human resources cost quite less. 5,000 people out of 6,000 Tata Gram Mitras are freelancers associated with the project and they consist of teachers, youth from villages, doctors, mechanics and few people from panchayats.
  • The main agenda is to “promote the idea of self-empowerment” via vehicle ownership. The Tata Gram Mitras receive regular stipend plus incentive if any enquiry converts into sale. Tata says that if they generate nearly 1 lakh enquiries in a month from urban markets, from the Neev markets the company gets around 50,000 enquiries in a month. Conversion also differs. If in urban markets they convert 8 to 12% into enquiries into sale, in Neev markets the rate lies somewhere between 3 to 4%.
  • This helps the Tata Motors to altogether achieve about 20% of sales from the Neev included markets. In big states like Bihar and Madhya Pradesh, 35 to 36% of total sales happen in the small markets. The company although expects the total sales from the Neev markets in all 11 states to reach to 35%. Tata Motor has partnered with Indian Oil Corporation’s Kisan Seva Kendras which are established in remote regions where there is very less to nil fuel distribution takes place. The owner of these Kisan Seva Kendras generally happens to be quite popular in the local community which thus helps Tata Motors to showcases vehicles, organize workshops and functions, loan fairs and educational programmes for the youngsters of the villages.

(Source: AutoCarpo)

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