India
Indian carmakers see strong sales but shrinking profits on rising costs
Passenger vehicle makers in India are selling record numbers of cars, but higher commodity costs and currency pressures are eating into profits. Maruti Suzuki's June-quarter sales rose sharply, yet its net profit fell.
Indian carmakers are reporting strong sales volumes, but rising commodity costs, adverse currency movements, and production disruptions are squeezing margins. This trend was illustrated by Maruti Suzuki, whose total sales volume jumped 29.3% year-on-year to a record of over 6.8 lakh units in the June quarter. Net sales rose 36% to Rs 49,959 crore, but net profit fell 10.8% to Rs 3,352 crore. Operating EBITDA declined 6.7%, and the margin contracted to 8.6% from 12.6% a year earlier. Ravi Bhatia, director at Jato Dynamics, said higher volumes normally provide operating leverage, but "in the current environment, part of that benefit is being absorbed by higher input costs."
India
Indian carmakers see strong sales but shrinking profits on rising costs
Passenger vehicle makers in India are selling record numbers of cars, but higher commodity costs and currency pressures are eating into profits. Maruti Suzuki's June-quarter sales rose sharply, yet its net profit fell.
Indian carmakers are reporting strong sales volumes, but rising commodity costs, adverse currency movements, and production disruptions are squeezing margins. This trend was illustrated by Maruti Suzuki, whose total sales volume jumped 29.3% year-on-year to a record of over 6.8 lakh units in the June quarter. Net sales rose 36% to Rs 49,959 crore, but net profit fell 10.8% to Rs 3,352 crore. Operating EBITDA declined 6.7%, and the margin contracted to 8.6% from 12.6% a year earlier. Ravi Bhatia, director at Jato Dynamics, said higher volumes normally provide operating leverage, but "in the current environment, part of that benefit is being absorbed by higher input costs."