Maruti drives parent Suzuki’s profit
Mumbai, Aug. 3: Japanese automaker Suzuki has recorded a seven-fold jump in first quarter profits, thanks to Indian subsidiary Maruti. For the June quarter, Suzuki recorded a net profit of 15.16 billion yen (Rs 753 crore) versus 2.14 billion yen (Rs 108.1 cr) for the same period in 2009. The company has attributed the jump in profits to higher sales in India.
“Overseas sales also exceeded that of the same period of the previous fiscal year because of sales increase in India by release of the new “Wagon R” in addition to favourable sales of the “SWIFT”, the company said in its statement.
Suzuki saw a big increase in its ‘Asia’ sales – of which India forms a substantial chunk. Meanwhile, other markets such as the US and Europe have seen sales drop.
Elaborating on overall Asian operations, SMC said: “Sales increased by 56.2 billion yen (about Rs 3,025 crore) to 233.5 billion yen (about Rs 12,567 crore) because of the sales increase in automobiles and motorcycles in various countries such as India.”
Interestingly, Maruti saw a drop in its profits during the first quarter – because of higher raw material costs and an increase in the royalty payment made to Suzuki.
During the first quarter, Maruti paid out 5.1 per cent of its revenues as royalty to the parent company, versus 3.6 per cent earlier. Total revenues of Suzuki for the quarter stood at 656 billion yen (Rs 32,576 crore).
The automobile business accounted for almost 88 per cent of this total. The company sold a total of 6.1 lakh cars in the period. The Indian arm, Maruti, sold 2.83 lakh cars over the same period. Its market share also declined to 47.59 per cent from over 55 per cent earlier in the 15 lakh units per annum domestic passenger car segment in India.
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