Months of slowing car sales at the largest carmaker in the country, Maruti Suzuki, have struck the company’s profit growth. Maruti Suzuki reported a 39 percent drop in his net profit in the quarter ended September 30 to Rs. 1,359 crore on Thursday.
Maruti Suzuki said his sales stood at Rs. 16,120 crores in the second quarter of the current financial year in a regulatory filing during market hours, showing a decline of 25 percent over the same period a year ago. Shares fell more than 2 percent at the end of the session after the release of earnings before cutting most of those losses.
Seventeen analysts had on average expected the company to post a profit of Rs. 1,076 crore for the July-September period, news agency Reuters reported citing Refinitiv data.
Maruti Suzuki announced his eighth straight monthly fall in vehicle sales and cut the number of temporary workers in August to cope with the auto sales slowdown.
During the quarter, the company sold a total of 338,317 vehicles-down 30.2 percent over the span of the year. Domestic sales dropped 31.4 percent to 312,519 units, while exports fell to 25,798 units, according to a press release by Maruti Suzuki.
The findings must be viewed in the context of an atmosphere of exceptionally weak demand, Maruti Suzuki said.
This year, due to several factors, the automotive industry experienced a significant decline in sales. One of the main factors is the increase in the cost of buying the car due to a variety of reasons that come together, such as introducing tougher safety and emission standards (BS6), rising vehicle insurance costs, and raising road taxes in many states, Maruti Suzuki said.