Maruti Suzuki Reports Slump in Sales

Tuesday 22 July 2008, 00:00 AM by Satish

Maruti Suzuki reported a net 7 percent fall in its quarterly net profits attributing the decline to rising costs of steel, plastic, aluminium, copper and other materials including rubber. The new depreciation policy also contributed outweighed the rise in sales.

It reported a decline in profit to Rs. 4.66 billion in the first quarter of the current fiscal that ended on June 2008 from Rs. 4.99 billion in the same quarter last year. It is facing tough competition in the small car segment in the country especially from Hyundai which is India’s second largest car manufacturer and has some of the most promising models like Santro and i10 in its small car product portfolio in India.

The net sales rose to 21 percent to Rs. 4.73 crores as the company sold 192,584 units in June quarter. However, it reported a drop in its operating margin to 10 percent from 14.6 percent a year. Maruti recorded its benefits due to cut in excise duty on small cars that fell from 16 percent to 12 percent and it raised its prices on nearly all models to nearly up to Rs. 15000.

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