Maruti Suzuki India, the country's largest carmaker today reported its financial results for Q2 FY2020 and H1 FY2020. During the second quarter, the company reported revenue of Rs 16,120 crore, down 25.2 percent YoY, while the net profit came at Rs 1,359 crore lower by 39.5 percent. The company says the net profit declined on account of lower sales volume, higher sales promotion expenses and higher depreciation expenses, partially offset by cost reduction efforts, higher fair value gains on invested surplus and reduction in the corporate tax rate.
The carmaker says the results for the quarter (July-September) and half year (April-September) FY 2019-20 "have to be viewed in the context of an exceptionally weak demand environment. This year, the automobile industry has seen a significant decline in sales owing to several factors."
The company says one of the main factors is increase in the cost of acquisition of the car due to various reasons coming together like implementation of more stringent safety and emission (BS VI) norms, increase in vehicle insurance expenses and hike in road taxes in many states. Along with this, the lower availability of finance and increased down payment requirement have affected the affordability of customers to own cars.
In Q2 FY2020, the company sold a total of 338,317 vehicles, lower by 30.2 percent compared to the same period previous year. Sales in the domestic market stood at 312,519 units, lower by 31.4 percent, while exports came at 25,798 units.
For H1 FY2020, the company sold 740,911 vehicles, lower by 24 percent YoY, including 687,000 units in the domestic market (-25.3%) and exports at 53,911 units. During the period, the company reported revenue of Rs 34,857 crore, lower by 19.6 percent compared to the same period last year.
Net profit in H1 FY2020 came at Rs. 2,794 crore, lower by 33.7 percent compared to the same period previous on account of lower sales volume, higher sales promotion expenses and higher depreciation expenses, partially offset by cost reduction efforts, higher fair value gains on invested surplus and reduction in corporate tax rate.