Maruti Suzuki India ended 2019 with a drop of 12.3 per cent in its annual sales. The fall, the steepest in almost a decade, came on the back of poor economic growth and a slowdown in overall consumption. India’s economy grew at an anaemic 4.5 per cent in the September quarter, the lowest in five years.
Entering 2020, Maruti is optimistic, even as it remains cautious of the disruptions expected in the next couple of months, ahead of the implementation of BS-VI and high cost of ownership, said a top executive of the company.
Shares of automobile companies gained on Monday after Maruti Suzuki India (MSI) increased its production in November. At 10:30 AM, the S&P BSE Auto index climbed 1.5 per cent as compared to a flat benchmark S&P BSE Sensex and was the top gainer among BSE sectoral indices.
Among individual stocks, Maruti Suzuki India, Tata Motors, and Motherson Sumi rose over 2 per cent each. Eicher Motors, Ashok Leyland, Mahindra & Mahindra, TVS Motor, Hero MotoCorp were all up in the range of 1-2 per cent, while Bajaj-Auto was also trading higher.
Even as automobile sales have hit a record low, the country's largest carmaker, Maruti Suzuki, on Tuesday announced a price hike across models from January. Others are likely to follow suit as they gear up to liquidate the stock ahead of rolling out new models in 2020.
Rising input cost, along with the transition of auto firms from BSIV to the more expensive BSVI models, has prompted the industry to hike prices, analysts pointed out.
Suzuki Motor Corp said it was no longer gung-ho about India's auto market, the world's fourth-largest, where it has seen relentless growth in the past seven years. And the parent of the country's biggest car maker is not alone.
The Japanese automaker issued the warning after it reported a slump in quarterly profit this week on tumbling sales at its Indian unit, Maruti Suzuki, which accounts for half the number of cars sold in India.
Maruti Suzuki and Toyota Tsusho Group on Wednesday announced a joint venture for vehicle dismantling and recycling.
In the joint venture -- Maruti Suzuki Toyotsu India Pvt Ltd (MSTI) -- Maruti Suzuki India (MSI) will have 50 per cent share, while Toyota Tsusho Group companies -- Toyota Tsusho Corporation and Toyota Tsusho India Pvt Ltd -- will hold the remaining stake.
Maruti Suzuki India (MSIL) reported a Q2FY20 Ebitda margin of 9.5% (Nomura: 8.5%, Consensus: 9.3%), helped by a 30 bps benefit to gross margin (Our estimate: 50 bps fall). The company said that the cost reduction helped margins. A fall in commodity prices and better inventory absorption may have also helped gross margins.
MSIL’s retail sales were slightly positive during the festive period, which is a good sign. However, the management said it needs to see if the turnaround sustains as the average `26,000/vehicle discount (was ~`17,000) helped demand.
The higher cost of buying a new car and weak sales in the low-cost model category impacted the company’s earnings substantially in the second quarter of FY20, Maruti Suzuki India Limited (MSIL) Chairman RC Bhargava said. It comes as the country’s largest car manufacturer reported a 24 per cent drop in sales in the first half of the ongoing fiscal. Volume sales during the quarter under review stood at 3,38,317 units, down 30.2 per cent as compared with the same period last fiscal.
Maruti Suzuki India Ltd (MSIL) said on Tuesday that it invested over Rs 154 crore towards its corporate social responsibility (CSR) initiatives during the financial year 2018-19.
The efforts were focused on community development, road safety, and skill development. These are aligned with the United Nations Sustainable Development Goals (SDGs) corresponding to good health and well-being,
Maruti Suzuki India (MSI), the country's largest carmaker, reduced its production for the eighth straight month, as the automobile sector continued to reel under a slowdown. The company cut its production by 17.48% in September.
The company produced a total of 1,32,199 units in September as against 1,60,219 units during the same month last year, Maruti Suzuki said in a regulatory filing.
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