Last year has been the most disruptive year for automakers in India in almost two decades where finances have taken a serious hit. Having said that, major automakers have posted marginal sales growth in the last two months giving a silver lining as we inch closer to the emission and safety norm deadlines which again is a major disruption the industry is gearing up for. India's largest carmaker, Maruti Suzuki has posted a sales growth of 2 per cent selling 437,361 units in the October-December period last year and in the same quarter its net sales went up by 3.8 per cent at Rs. 196,491 million. The progress in sales revenue has also reflected in its profit after tax (PAT) which has gone up by 5.1 per cent at Rs. 15,648 million.
That said, apart from minimal improvement in sales, the carmaker has also taken some cost ruminative steps to improve margins and increase profits. For starters, the company has mentioned that it has lowered its operating expenses along with cutting down on some permanent expenses. Maruti has also incurred lesser expenses in the third quarter on sales promotion expenses. Moreover, with over 10 BS6 vehicles in its line-up, almost 75 per cent of Maruti's product portfolio in now adheres to BS6 norms and the company has sold over five lakh units of BS6 vehicles as of now. The company had also cashed in the festive season demand by means of discounts on high selling models. Vehicles like the Vitara Brezza and Swift among others were under a discount of up to Rs. 1.5 lakh between September and November last year.
Nonetheless, downturn effects are yet inevitable in the cumulative sales and even finances. Overall sales in the first three quarters of FY2020 have gone down by 16.1 per cent at 11,78,272 units and net sales in the same period witnessed a dip of 12.5 per cent at Rs. 545,047 million. Net profit in the October-December period witnessed a slump of 23.6 per cent at Rs. 43,589 million. Sales of Maruti's higher realisation products like Vitara Brezza and Ciaz have been down substantially as well. The Vitara Brezza which has been India's bestselling SUV for long has lost volumes lately in its four year long lifecycle, more so due to unviability of a petrol engine at a time when sales of petrol models have picked up in the segment. Moreover, Mauti's first and second quarter sales were extremely under pressure and the company's cumulative sales in the April-December December recorded a year-on-year decline of 16.9 per cent selling 11,00,698 units as compared to 13,24,837 units which were sold in the same period a year ago.
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