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India’s largest car maker, Maruti Suzuki, on Friday reported a 35.5% fall in net profit to Rs 800.05 crore for the quarter ended March 31, missing analyst estimates, as a protracted slowdown and increased expenses on marketing and advertising eroded its profitability.
Net sales also declined during the quarter by 9.48% to Rs 11,818.13 crore on the back of a 5.5% year-on-year decline in sales volume to 324,870 units.
Ironically, the government’s excise duty cut in mid-February, to boost sales, backfired for Maruti as it had to compensate its dealers to the tune of Rs 143 crore for existing inventory.
“The market conditions in this fiscal are not very different from last year,” said RC Bhargava, chairman, MSIL. “We are hoping that after elections, under the new government, there will be an improvement in the economy though it may not be very dramatic.”
For the full year 2013-14, Maruti’s net profit grew 15.53% to Rs 2,852.92 crore, its highest ever, from Rs 2,469.28 crore in 2012-13. The previous record was Rs 2,497.6 crore seen in 2009-10.
The company said it will launch 3 new cars in 2014-15 including mid-size sedan Ciaz showcased at the Auto Expo.
It also said it will approach its minority shareholders for an approval to allow a Suzuki subsidiary to build and operate its upcoming Gujarat factory by August or September.