Lower commodity prices and a cost-cutting drive also aided the financials of the carmaker which has popular SUVs like Grand Vitara and Fronx.
The company said it expects SUVs to remain the dominant category in the Indian market, adding that it will continue to launch new vehicles in the segment to strengthen its market share. However, small car sales, once its bread and butter, are unlikely to revive in the next two years, it said.
Outlook Optimistic: Bhargava
The company reported a net profit of ₹3,877.8 crore for the quarter to March, a 47.8% increase over ₹2,623.6 crore a year ago.
In a statement, the Delhi-based Indian subsidiary of Japan’s Suzuki Motor Corporation attributed the strong growth in net profit to “higher sales volume, favourable commodity prices, cost reduction efforts and higher non-operating income”. Non-operating income stood at 3% of net sales in FY24.
Net sales in the three months to March increased 19% year-on-year to ₹36,697.5 crore. Total expenses went up 16.3% to 34,355.1 crore, the company said.
“I am optimistic about the outlook for FY25,” said Maruti Suzuki India chairman RC Bhargava. “The new government will come to power shortly and will have a very good base from which to go forward. One should see several measures which will propel the economy forward at a much faster pace. The car industry should have a good year.” The company is on track to commission its first assembly line of 250,000 units in Kharkhoda, Haryana, by the end of this fiscal. Thereafter, it plans to add one new production line every 12 months to meet the anticipated increase in consumer demand.
Inflation is expected to be under control, Bhargava said, adding that this should trigger rate cuts in the second half of the year which would help drive growth in the industry. He said while double-digit sales growth may not materialise, given the company’s high base, it will aim to come close to such an increase in 2024-25.
In January-March, the company sold a total of 584,031 vehicles, up 13.4% year-on-year. While sales in the local market went up 12.2% from a year ago, exports surged 21.7% to 78,740 units.
In 2023-24, Maruti Suzuki India surpassed total sales of two million units for the first time in a fiscal. It continued to be the top exporter for the third consecutive year, accounting for 41.8% of total passenger vehicle shipments from India during the financial year, the company said.
It sold a total of 2,135,323 vehicles during the fiscal, an increase of 8.6% year-on-year. Sales volume in the domestic market stood at 1,852,256 units and exports at 283,067 units. The company is looking at exporting over 300,000 vehicles from India in FY25.
Maruti Suzuki India MD Hisashi Takeuchi said while there are some challenges pertaining to questions over policy continuity as the general election is underway, the company “would like to maintain this momentum”.
Industry stakeholders are awaiting the outcome of the polls, in which the Narendra Modi government is seeking a third straight term in office. The geopolitical environment too remains fragile amid the tensions in West Asia.
Separately, Bhargava said Maruti Suzuki India is scheduled to start production of its first electric vehicle (EV) this fiscal, with the first lot of vehicles slated to be shipped to Europe. Substantial sales of the company’s EV in the local market are likely to happen only next fiscal. Overall, he said while all carmakers have accepted that they need to have EVs, how the market for these vehicles evolves will depend on customer acceptance, development of charging infrastructure and government policies.
“As a manufacturer, despite the desire to meet carbon neutrality goals as quickly as possible, we have to take into account what the customer wants in terms of technology or variants of that technology,” Bhargava said.
He said Suzuki Motor Corporation is also working on developing new technologies to bring the advantages of hybridisation to smaller cars but is not yet ready.