Maruti suffers quarterly loss for first time in 17 years
The country’s largest car maker, Maruti Suzuki India, on Wednesday reported its first ever quarterly loss since the company went public 17 years back as the coronavirus-induced lockdown disrupted the supply chain and brought demand to its knees.
Maruti reported a consolidated net loss of Rs 268.3 crore against a net profit of Rs 1,376.8 crore in the April-June quarter of 2019-20. Maruti was listed way back in July 2003.
Net sales declined to Rs 3,679 crore in the first quarter against Rs 18,738.8 crore in the year-ago period.
On a standalone basis, the company reported a net loss of Rs 249.4 crore during the period under review. It had posted a net profit of Rs 1,435.5 crore on a standalone basis in April-June of 2019-20. Net sales declined to Rs 3,677.5 crore compared with Rs 18,735.2 crore in the year-ago period.
During the first quarter, Maruti sold a total of 76,599 vehicles. Sales in the domestic market stood at 67,027 units, while exports were at 9,572 units. The company had sold 4,02,594 units in the first quarter of the previous fiscal.
“Owing to the global pandemic of Covid-19, it was an unprecedented quarter in the company’s history wherein a large part of the quarter had zero production and zero sales in compliance with a lockdown stipulated by the government,” MSI said.
The country went into a lockdown for over two months beginning late March. Maruti said manufacturing during the quarter was equivalent to about two weeks. Production and sales started in a very small way in May, it added.
The company’s first priority was health, safety and wellbeing of all employees and associates across the value chain, including its customers, the auto major said.
“Hence, with carefully designed safety protocols, which went far beyond compliance levels, the production in the whole quarter was equivalent to just about two weeks of regular working. The results have to be viewed in this context,” it noted.
Due to the lockdown, the auto maker had suspended operations at both its Manesar and Gurgaon facilities on March 22.
The facilities, with a cumulative production capacity of over 15.5 lakh units per annum, resumed operations on May 12 after 40 days of closure. The suspension of operations led to zero sales for the company in domestic market in April.
In May, Maruti sold 18,539 units, a dip of 86.23 per cent from 1,34,641 units in same month last year.
Similarly, in June the company’s total sales declined 54 per cent to 57,428 units compared with June 2019.
TVS Motor Company on Wednesday reported a standalone net loss of Rs 139.1 crore for the first quarter ended June 30, with Covid-19 severely impacting sales during the period.