No Alto, not so Swift
Maruti Suzuki posts nearly 60 per cent decline in quarterly net profits; announces new manufacturing unit in GujaratMaruti Suzuki posts nearly 60 per cent decline in quarterly net profits; announces new manufacturing unit in Gujarat
Automobile company Maruti Suzuki reported a decline of 59.81 per cent in its net profit for the quarter ended September 30, it said, in a regulatory filing to the Bombay Stock Exchange (BSE). It also announced that the company board has also approved a plan to buy land in Gujarat for a new production facility. "The board granted approval to purchase land in district Mehsana, Gujarat, for future expansion of manufacturing facilities," the regulatory filing said, adding that it is planning to buy around 1,400 acres of land in Gujarat, part of which will be coming from the state government.
The announcement comes after consultations between the Gujarat government and Maruti officials over the last few months. Suzuki Motor Corporation chairman Osamu Suzuki and Maruti chairman RC Bhargava met chief minister Narendra Modi last month to discuss the proposed plant.
Gujarat already houses plants of car firms like Ford and General Motors.
The company posted a net profit of Rs 240.44 crore for the quarter, as compared to Rs 598.24 crore during the same period of the previous financial year, due to the prolonged labour unrest and strike by workers at its Manesar facility during the period.
The total income during the quarter under review stood at Rs 7,949.36 crore, down 14.36 percent from Rs 9,282.3 crore in the like period of last fiscal.
The company's domestic sales were dented the hardest in the volume-driven A2 segment, which includes cars like Alto, WagonR, Zen, Swift, Ritz, and A-Star, where sales declined by 23.5 percent at 1,52,260 units.
Compared to the sales in July-September quarter, 2010, sales in A3 segment, SX4, D'zire - dropped by 21.3 percent to 24,680 units.
According to the company, during the quarter, the domestic auto industry remained sluggish on account of increase in fuel prices and hardening interest rates, leading to higher sales promotion expense. The bottom line was also affected due to adverse foreign exchange rates.