Maruti’s Q2 net profit slips 60%; to buy land in Guj
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The country's largest car-maker Maruti Suzuki India on Saturday reported 59.81 per cent fall in net profit at Rs 240.44 crore for the quarter ended September 30, mainly due to production loss at Manesar because of labour unrest.
The company's board, meanwhile, has approved to purchase land in Gujarat to set up manufacturing facilities.
The company had posted a net profit of Rs 598.24 crore in the same period in 2010, Maruti Suzuki India (MSI) said in a statement.
MSI's total income from operations during the second quarter also declined by 14.38 per cent to Rs 7,831.62 crore, from Rs 9,147.27 crore in the year-ago period.
During the quarter, the company's vehicle sales dipped by 19.56 per cent to 2,52,307 units from 3,13,654 units in the same period in 2010, MSI said.
"The company lost 28,539 units during the quarter due to instances of industrial unrest at its Manesar facilities," the statement said.
MSI's bottom line was also impacted due to adverse foreign exchange rates, it added.
"During the quarter, the domestic auto industry remained sluggish on account of increase in fuel prices and hardening interest rates, leading to higher sales promotion expense," the company said.
Meanwhile, the board of directors approved MSI's third manufacturing facility, to come up in Gujarat. It will be the company's first major establishment outside its base Haryana.
The board "granted approval to purchase land in district Mehsana, Gujarat, for future expansion of manufacturing facilities. This purchase would be subject to final negotiations on price and all legal formalities being completed", the statement said.
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