MUMBAI, Oct 27: Maruti Suzuki India’s net profit surged 80.3 per cent to Rs 3,716.5 crore in the July-September quarter, driven by better sales, softening commodity prices, cost reduction efforts and higher non-operating income.
The company had delivered a net profit of Rs 2,061.5 crore in the second quarter of the fiscal year ended March 31, Maruti Suzuki India said in a statement.
Maruti said it is expecting the affordability of small cars in the domestic market to come back in the next two to three years in the face of rising income levels of people and a growing economy, among others.
During the quarter under review, the company registered net sales of Rs 35,535.1 crore against Rs 28,543.50 crore recorded in the same quarter of the previous fiscal, owing to higher sales volume and product mix, it noted.
The company sold 5,52,055 vehicles during the quarter compared to 5,17,395 units in the second quarter of last year.
Of the vehicles sold in the July-September period this year, 4,82,731 units were sold in the domestic market, while the remaining 69,324 cars were exported, the company said.
The carmaker also said that it recorded its highest-ever quarterly sales volume, net sales and net profit in this quarter.
“And given this kind of growth (rising income levels and growing economy), I expect that the affordability factor, which was in the past the reason for small cars (sales) going down, that factor is going to gradually get eroded and in the next, maybe two or two years, we will find that people once again, will be able to afford a small car and the market should gradually come back,” Maruti Suzuki India Chairman RC Bhargava said at the post-earnings virtual media conference.
The importance for small cars coming back, Bhargava said, is that without the growth at the entry-level and the small car market in a retail space like India, we cannot sustain good growth levels in the industry.
“I expect that given the kind of demography and consumers we have, there are 150-180 million two-wheeler users in India. I believe, demand for economic models should come, given that cost rises are controlled. So that those users can start adopting cars. The importance of small cars coming back is that without them in India, we cannot sustain good growth levels in the car industry,” Bhargava said.
The Indian economy, despite what is happening globally, is in a good position, growing between 6-7 per cent, and things are moving along as they should, he said, adding that “we feel that we are now in more normal circumstances”.
“I am told that the industry is not very optimistic about next year, and the growth projections for next year are virtually at a stagnation level. And partly, it is because perhaps there is degrowth in the small car segment, and India needs that segment to grow,” he added. (PTI)
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