Cost pressure: Carmakers see strong sales but lower profits
NEW DELHI: Carmakers are selling more vehicles, but higher volumes are not necessarily translating into fatter profits. Rising commodity costs, adverse currency movements and production disruptions are squeezing margins at some of India's biggest passenger vehicle makers even as demand remains strong.
Maruti Suzuki is the clearest example. Its total sales volume jumped 29.3% year-on-year to a record over 6.8 lakh units in the June quarter, while net sales rose 36% to Rs 49,959 crore. Yet net profit fell 10.8% to Rs 3,352 crore. Operating EBITDA declined 6.7% and margin contracted to 8.6% from 12.6% a year earlier.
Maruti Suzuki is the clearest example. Its total sales volume jumped 29.3% year-on-year to a record over 6.8 lakh units in the June quarter, while net sales rose 36% to Rs 49,959 crore. Yet net profit fell 10.8% to Rs 3,352 crore. Operating EBITDA declined 6.7% and margin contracted to 8.6% from 12.6% a year earlier.
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