Auto Components

Maruti to deliver 111 Alto 800s to customers in Kerala

October 31, 2012: Maruti Suzuki India is set to set a second milestone delivering 111 of its recently launched Alto 800 cars to customers on November 1 in Kerala. The delivery will be by dealer KVR in Kasargod. This follows the delivery of 200 Altos on a single day (October 19) at a single outlet by a single dealer to multiple customers -- AM Motors at Kottakkunnu in Mallapuram district near Calicut in Kerala. Maruti claims this was the first time in India when so many cars were delivered to 200 customers at the same time.

The new Alto 800 has already notched bookings of 31,000 units of which about 13,000 units are expected to have been retailed by now, as per industry estimates.

The Alto has received bookings across India but some of the key cities where it has been most popular are Kerala, Guwahati and Punjab. It is believed that entry level buyers are in larger numbers in these regions compared to cosmopolitan cities and metros like Delhi where the Alto would be a second buy.

Meanwhile, Maruti which revealed the financial results for the second quarter ended September 30, 2012, has had a tough half-year in 2012-13. The results are clearly indicative of the challenges faced by the company: the month-long Manesar plant lockout due to labour trouble, the subsequent slow ramp-up to normalcy and lower production of diesel-engined vehicles like the Swift hatchback and Dzire saloon, despite the huge pent-up consumer demand for them. In fact, Maruti says it has a waiting list of nearly 125,000 for its diesel vehicles. Of these, around 90,000 units are for the popular Swift hatchback and Dzire saloon, with the Ertiga accounting for the rest.

Further, the sharply dwindling demand for petrol vehicles has hit Maruti hard. In a bid to push petrol vehicle sales, it offered customers bigger discounts than before, which has impacted profitability. As against an average discount of Rs 11,650 in Q1 (April-June 2012), discounts rose to an average of Rs 14,150 per vehicle in Q2 (July-September 2012).

Overall, net profit for Q2 2012-13 fell by 5.41 percent to Rs 227.45 crore, compared to Rs 240 crore in Q2 2011-12 (July-September 2011). Worryingly for the company, Q2’s net profit is nearly half of Q1’s Rs 423.77 crore. Maruti says the bottomline has also been impacted by lower non-operating income during the quarter.

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