Companies

Manesar stir dents Maruti net 5%

Our Bureau New Delhi | Updated on October 31, 2012 Published on October 30, 2012

The company doled out more discounts in the second quarter that was “at an all-time high” to attract customers.

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India’s largest car maker Maruti Suzuki India (MSI) on Tuesday reported a 5.41 per cent drop in net profit at Rs 227.45 crore, for the quarter ended September 30, largely because production disruptions at the company’s Manesar facility directly hampered diesel car sales.

“The market showed a marked preference for diesel cars, while demand for petrol vehicles dropped sharply. Despite scaling up production of diesel cars, the company has a customer wait list of nearly 1.25 lakh for its diesel vehicles,” a company statement said.

“The overall industry sales for petrol vehicles declined by 20 per cent, while that of diesel increased by 40 per cent during the quarter," said Shinzo Nakanishi, Managing Director and CEO, MSI.

Adverse exchange rate and excessive discounts given by the company to rev up the slowing market were other reasons quoted by the company.

“The company had given a discount of Rs 14,750 per car during the quarter, which was an all time high. It was Rs 12,600 in the first quarter. Forex impact during the quarter was 2.1 per cent on the net sales and discount impact was 1 per cent. We could make up for two per cent on account of cost reductions and price increases. So effectively there was a 1.1 per cent impact on net sales,” said Ajay Seth MSI Chief Financial Officer.

Net sales during the second quarter of this fiscal, however, went up by 8.53 per cent to Rs 8,070.11 crore, from Rs 7,435.85 crore in the corresponding quarter last year. The company attributed the growth in net sales to new model Ertiga and enhanced export realisation.

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Published on October 30, 2012
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