(Bloomberg) — Maruti Suzuki India Ltd., the nation’s biggest carmaker, reported better-than-expected quarterly income as higher vehicle prices countered rising input costs.
Net income jumped 57% to 18.4 billion rupees ($240.9 million) for the three months ended March 31, versus 11.7 billion rupees a year earlier, the unit of Japan’s Suzuki Motor Corp. said in a statement Friday. The average estimate of analysts tracked by Bloomberg was for a profit of 14.8 billion rupees.
Revenue of 267.4 billion rupees also narrowly beat the 266.6 billion rupees forecast. Total costs rose 9.7% to 250.2 billion rupees.
Like their counterparts globally, Indian automakers are struggling to absorb commodity inflation triggered by the rising price of raw materials and a supply-chain crunch. Car manufacturers including, Maruti, Tata Motors Ltd. and Mahindra & Mahindra Ltd., have raised vehicle prices to pass on those higher costs to consumers and boost revenue.
“The prices of commodities such as steel, aluminum and precious metals witnessed an unprecedented increase during this year,” the company said in the earnings filing, adding that it was forced to raise prices as well curb costs. “This financial year has been unique owing to an unprecedented global crisis caused by the pandemic and electronic component shortages.”
Maruti Suzuki hiked prices by an average of 1.3% across its models earlier this month, following a previous hike of 1.7% in January. Maruti Suzuki Chief Executive Officer Hisashi Takeuchi, who took on the role April 1, has said the semiconductor shortage and climbing input costs are affecting its business.
Increasing the cost of cars has crimped the company’s sales in India’s price-sensitive market. Local sales in March fell 7.9% year-on-year to 137,658 units.
Japanese parent Suzuki is foraying into India’s electric car market with an investment of 104.4 billion rupees and plans to manufacture EVs and batteries in Gujarat.
Maruti was previously reluctant to sell EVs in the nation of 1.4 billion people because of their expensive price and sparse charging infrastructure, according to Chairman R.C. Bhargava.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
