Forbes India 15th Anniversary Special

New higher segment models power Maruti Suzuki's Q3 show

Waiting period helps India's largest car maker to post a growth in volumes despite demonetisation impact

Published: Jan 25, 2017 03:21:25 PM IST
Updated: Jan 25, 2017 04:07:55 PM IST

New higher segment models power Maruti Suzuki's Q3 show
Image: Anindito Mukherjee/REUTERS

It is the higher end models that have come to the rescue of India’s largest car maker – Maruti Suzuki during the third quarter of 2016-17 when demand was impacted by demonetisation. The long waiting period for some of its models such as Baleno and Brezza ensured that the volumes were unaffected (it is not clear if demonetisation had impacted the bookings for these models).  

During Q3 of 2016-17 the company managed to post a 3.5 percent growth in volumes at 3,87,251 units. The net sales, as a result, grew by 12.3 percent to Rs 16623.60 crore.  The higher margins these cars delivered also ensured that profit growth was even higher. It grew by 47.5 percent to Rs 1744.5 crore. Higher profits, according to the company, was also possible on account of the company cutting back on sales promotion and marketing expenses and other cost reduction efforts.

However, it appears that the company has not been entirely spared of the demonetisation impact, especially when it came to its entry level and older models. Its revenues and profits for Q3 were lower than what it posted in Q2 of the current fiscal. Revenues declined by 6 percent while the net profit declined by 37 percent.

For the nine month period (April-December 2016) the company has posted a gross revenue of Rs 55717.80 crore and a net profit of Rs 5628.70 crore. In volume terms the company sold 11,54,164 units in this nine month period, 8 percent more than what it sold in the same period last year.