Maruti Suzuki has posted large increases in sales and profits for the third quarter of fiscal 2009/10.
Net sales reached INR73.34bn (US$1.59bn) during the third quarter of 2009-10, up 62.5% year on year. Net profit rose 222% to INR6.9bn ($148.6m).
“The results of the quarter have to be seen in the context of the low base in the same quarter in fiscal 2008-09,” Maruti said in a statement.
“In the October–December 2009 quarter, favourable conditions in the domestic market supported by the government’s stimulus package and ease of automobile finance helped achieve good sales. Commodity prices were favourable for a major part of the last quarter but started to harden in the last few weeks.”
Exports, led by the A-star/Alto, continued to be “strong”, Maruti said. “The scrappage schemes offered by some European governments, an appreciating euro and efforts in the non-European markets resulted in the growth in exports.”
Maruti said its board had approved capacity expansion at its Manesar facility. An investment of about INR1,700 crores (INR17bn of $367.5m) would boost capacity by about 250,000 cars a year with production starting by April 2012.
Maruti Suzuki currently can build a million units at its existing facilities at Gurgaon (0.7m) and Manesar (0.3m).
Maruti said it remained “cautiously optimistic” about sale volumes this quarter because margins would be under pressure due to the introduction of new emission control technology in its larger volume models and “hardening” of commodity prices.
“The focus on cost reduction and Kaizen in operations continues,” it said.
Third quarter domestic sales volume grew by 37.8% to 218,910 units, led by the Alto and Wagon R. It also launched an updated SX4 with an automatic transmission option.
The company’s exports during the October-December 2009 quarter grew 167% to 39,116 units. The company shipped just 14,634 units in October-December 2008 period.