Maruti Suzuki reports a net profit drop of 24.7 per cent
India's largest automobile manufacturer Maruti Suzuki released their financial results for the year FY 2019-20 along with Q4 (January-March 2020). The company reported a drop in net profits by 24.7 per cent compared to the same last year. The reasons for that are drop in sales, higher expenditure on sales promotion as well as on depreciation. Additionally, efforts in cost reduction, reduction in corporate tax rate and lower operating expenses too have resulted in the above.
During the financial year, April 2019 - March 2020, Maruti Suzuki sold a total of 15.63 lakh vehicles, which was 16.1 per cent lower as compared to what the company achieved in the previous year. The domestic sales were 14.61 lakh vehicles, lower by 16.7 per cent. While this was the performance in the domestic market, the exports too have been affected with a six per cent drop (compared to the previous year) clocking a sale of 1.02 lakh vehicles. The net sales are down too at Rs. 7,16,904 million in FY 2019-20, making it 13.7 per cent lower than the same in the previous year.
In the Q4, January-March 2020, a total of 3.85 lakh vehicles were sold, down by 16 per cent over the previous. The domestic sales stood at 3.60 lakh units while exports were 24,597 vehicles. This amounted to a drop of 16 per cent and 16.9 per cent in domestic and export sales, compared to the previous year, respectively. The net sales in this period was 1,71,857 million, down by 17.1 per cent, while the net profit was lower by 28.1 per cent at 12,917 million.
Due to the lockdown initiated by the government as a measure to control the spread of the virus, Maruti Suzuki sold no cars in April 2020, since the manufacturing facility and the dealerships were shut throughout the month. With the easing of the lockdown for manufacturers and dealers, Maruti Suzuki delivered 1,600 cars in the country.