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News of relief in the auto sector, Maruti Suzuki sales increase

Thursday - January 30, 2020 11:19 am , Category : BUSINESS
Increase in the net profit of Maruti Suzuki
Increase in the net profit of Maruti Suzuki

…So the Indian auto industry recovered from the economic slowdown 

JAN 30 (WTN) – The global economic slowdown has affected India's fast-growing economy for many months. The economic slowdown that began with the US-China trade war has had a very negative impact on the Indian economy. But the most impact of the economic slowdown has been seen in the auto sector. Whenever there were talks of the economic slowdown in the country, low sales of vehicles were presented as an example of the economic slowdown. It is also true that for the last 18 months, the economic slowdown in the auto sector has had such a huge impact that the sales of vehicles have historically been declining.

According to the International Monetary Fund, the economic slowdown has affected 90 percent of the world's economies, including India, in some way, but after the recent trade deal between the US and China, the effect of the economic slowdown is gradually decreasing, and the Indian Auto sector is giving a similar indication. Explain that the country's largest car-making company Maruti Suzuki has announced a net profit of Rs 1587.4 crore during the October-December quarter of FY 2019-20 which is 4.13 percent higher than in the same period last year.

For your information, let us know that in the October-December quarter of the last financial year 2018-19, Maruti Suzuki had a net profit of Rs 1524.5 crore. Explain that Maruti Suzuki has a close to 53 percent share in the Indian car market. In such a situation, based on the increased profit of Maruti Suzuki, it can be said that the slowdown in the auto sector is slowly ending.

Let us know that during the October-December Quarter of the current financial year, Maruti Suzuki has sold a total of 4,37,361 cars, in which the company has exported 23,663 cars, and sold 4,13,698 cars in the Indian market. According to the data, this time in the domestic market car sales is 2 percent higher compared to the same quarter of the last financial year. At the same time, the Maruti Suzuki Company has also achieved a growth of 5.29 percent in the consolidated revenue from operations. Explain that the consolidated revenue of the company in the third quarter of the current financial year was Rs 20721.8 crore, while this figure was Rs 19680.7 crore in the same quarter of the last financial year.

On the increase in vehicle sales, Maruti Suzuki says that a lot of money has been spent on the promotion to increase the sales of vehicles. At the same time, the company says that during the third quarter of the current financial year, several measures were taken to make a profit, such as cost-cutting and low operating expenses, etc. At the same time, the company has made a profit in this quarter due to lower raw material prices and reduced corporate tax. However, the company feels that its expected profit has been lower, and the company expected net profit to be around Rs 1647 crore. The company is, however, buoyed by its performance in the ended quarter, as the company has made this profit at a time when auto loan terms have tightened in the third quarter of the current financial year, and there has also been an increase in the insurance cost.

After the encouraging sales figures of Maruti Suzuki cars, experts in this field are of the opinion that the quarterly figures of Maruti Suzuki Company are not very encouraging but based on these figures, it can be said that the bad days of the auto sector are over now. However, in the remaining time of the current financial year, there may also be seen fluctuations in the auto sector. By the way, it is being said that how the sales are going to continue in the auto sector will be seen in the first quarter of the new financial year 2020-21.

Actually, as you know, the central government is trying to encourage people to buy more and more electric vehicles instead of diesel and petrol vehicles. It is possible that in this year's budget, the government may announce a concession in the registration, etc. on the purchase of electric vehicles. Here, the auto sector is also undergoing changes. Actually, on the one hand, auto companies are moving from BS-IV directly to BS-VI, on the other hand, they are also under pressure on electric wheels. 

However, Maruti Suzuki's third-quarter sales figures for the current fiscal are quite encouraging for the auto sector. The economic slowdown has had a negative impact on the auto sector for quite some time. During this time, vehicle sales were so low that some auto companies had to cut their production due to the economic slowdown or to stop production for a few days. The economic slowdown also had an impact on the auto sector jobs, and thousands of people had to lose their jobs. However, now that the auto sector has recovered from the impact of the economic slowdown, it is to be hoped that this will increase the profits of auto companies and will once again increase employment opportunities in this sector.