Maruti Mar sales down 2%, FY08 sales up 12%

Maruti Suzuki today reported a marginal (2.1%) decline in March sales at 70,296 units as against 71,772 units sold in March 2007.

The company witnessed a fall of 11% in the A2 segment that includes models like Zen Estilo, Wagon R, Alto and Swift. The combined segment sales were at 41,869 units when compared with 47,068 units sold in March 2007. Exports declined more than 18% to 5,875 units.

The company reported an annual growth of 12% for the year ended March 2008 at 711,818 units when compared with 635,629 units sold in FY07.

Maruti Suzuki launches Swift DZire

Maruti Suzuki today launched its new entry level sedan Swift DZire, making it the seventh model to be launched by the company in the last three years.

Variants of the DZire will be available in the range of Rs 4.49 lakh to Rs 6.7 lakh (ex-showroom Delhi). The petrol variant is being priced in the range of Rs 4.49 to Rs 5.9 lakh while the diesel one will be available between Rs 5.39 to Rs 6.7 lakh.

Launched as an replacement of the earlier mid size sedan Maruti Esteem, the DZire will have features like including integrated stereo, steering mounted audio controls, automatic climate control, power windows and dual airbags.

Maruti, Bajaj, Hero Honda Feb sales decline

Maruti Suzuki (MSIL), India's largest car maker, registered a marginal (0.4%) rise in domestic sales in February at 59,311 units when compared with 59,095 units sold in February 2007.

The company said the marginal increase is due to customers postponing their purchase decision in anticipation of the excise duty cut in the budget.

Finance Minister P Chidambaram yesterday proposed to bring down excise duty on small cars to 12% from 16%. Maruti has decided to pass on the complete benefit of the excise cut to customers, and has cut prices of its cars in the range of Rs 6,500 to Rs 18,030.

Sales in the A2 segment, including cars like Swift and Alto, increased 2.7% to 44,059 units. The company sold 1,958 units in the A3 segement including SX4 and Esteem - an increase of 8.9%. Exports increased 15.5% to 4,511 units in February.

General Motors India today reported a 80% increase in sales at 5,563 units in February when compared with 3,087 units sold in February 2007.

The company sold 1,681 units of Tavera, 1,102 units of Aveo, 360 units of Optra, 2,229 units of Spark and 191 units of Captiva.

P Balendran, vice president, GM India, said: "We are very pleased to see such a robust growth for all our carlines under the Chevrolet brand. With the consistent surge in monthly sales, our key focus remains to address the changing customer needs while providing them world-class products and best-in-class service."

Bajaj Auto and Hero Honda have witnessed a decline in sales in February on the back of falling demand for entry-level models and restricted availability of finance.

Bajaj Auto reported an 8% decline in motorcycle sales at 158,662 units for February as against 171, 780 units sold in February 2007. A release from the company said: "A degrowth of about 13% in the 100cc segment offset stable sales in the 125cc + segment resulting in an overall degrowth of 10% for the motorcycle industry."

Hero Honda had its biggest fall (5%) in monthly sales in this financial year at 265,431 units from 280,515 units in February 2007. The company has blamed lack of finance as the reason for the decline in sales.

Hyundai, Maruti, GM to cut prices

Hyundai reducing prices in the range of Rs 8,700 – Rs 20,000.

Maruti small segment cars will be cheaper by Rs 6,500- Rs 18,000.

GM price cuts will range from Rs 7,500 to Rs 14,000 on Spark, U-VA.

Car makers have been quick in responding to the announcement in the Union Budget of reduction in excise duty on small cars. Enthused by the excise duty cut, most car makers have announced reduction in the prices of their small cars to pass on the cost benefits to customers.

A short while after the Budget announcement, Hyundai Motor India said that it would reduce the prices on Getz, i10 and Santro. Hyundai announced reduction in prices in the range of Rs 8,730- Rs 13,278 on its flagship model Santro, Rs 11,047- Rs 16,324 on its newly launched premium compact car i-10 and from Rs 13,169- Rs 19,419 on its hatchback Getz.
A major boost

“At a time when the industry sales seemed to be tapering off, this has come as major boost and it will help the industry maintain its growth rate. Today, 75 per cent of the car sales are in the compact segment and this cut in excise duty will benefit manufacturers and customers alike,” said Mr Arvind Saxena, Senior Vice-President, Sales and Marketing, Hyundai.

Maruti Suzuki will also slash prices on all its six models that qualify for lower excise benefit including Maruti 800, Omni, Zen, Wagon R, Swift Diesel and Alto. The reduction would range between Rs 6,500 for Maruti 800 to Rs 18,030 for Swift Diesel (ex-showroom Delhi).

General Motors said it would reduce prices in the range of Rs 7,500 –Rs 14,000 on its best selling Spark and U-VA. “The reduction in duty would make the compact car segment more competitive, apart from boosting sales,” said Mr P Balendran, Vice President, General Motors.

“Tata Motors will lower prices of its small cars and commercial vehicles including buses, bus chassis and bus body in view of the reduction of excise duties announced in the Union Budget. The new applicable prices will be announced in the next few days, after the company has studied the details of the policy changes,” a company statement said.

Q3 Results As on 29/01/2008

Maruti Suzuki Q3 net up 24%

Maruti Suzuki India today reported a 24% increase in net profit at Rs 467.04 crore for the third quarter ended December 31, 2007 when compared with Rs 376.41 crore in Q3FY07.

According to a release issued to the BSE today, total income increased to Rs 4,844.80 crore for the quarter ended December 31, 2007 from Rs 3,807.90 crore in Q3FY07.

SAIL Q3 net up 31%

Steel Authority of India (SAIL) today reported a 31.5% rise in net profit (standalone) at Rs 1,934.66 crore for the third quarter ended December 31, 2007, when compared with Rs 1,471.19 crore in the corresponding quarter a year ago.

According to a release issued by SAIL to the BSE today, total income increased 12.4% to Rs 9,847.64 crore for Q3FY08 from Rs 8,760.16 crore in the quarter ended December, 2006.

Nalco Q3 net down 43%

Nalco today announced a 42.46% dip in net profit at Rs 329.44 crore for the quarter ended December 31, 2007 as against Rs 572.60 crore in Q3FY07.

According to a release to the Bombay Stock Exchange, the company's total income decreased to Rs 1247.26 crore for the quarter ended December 31, 2007 from Rs 1546.40 crore for the quarter ended December 31, 2006.

Havells India Q3 net up 44%

Electrical and power distribution equipment company Havells India’s net profit jumped 44% to Rs 37 crore in the quarter ended December 31, 2007 as against Rs 26 crore in the corresponding quarter in the previous year.

Revenue during the third quarter also increased by 37% to Rs 535 crore as against Rs 301 crore during the corresponding quarter of the last year, the company said in a statement.

The performance of the switchgear sales continued with the healthy trend, showing a growth of 52% to Rs 141 crore from Rs 93 crores achieved in the corresponding quarter of the previous year.

The cable & wire business segment showed a growth of 28% with Rs 241 crore as against Rs 189 crore in the same period last year.

Anil Gupta, joint managing director, Havells India, said: "The quarter gone by has been remarkable for the company wherein we consolidated our market share reflected in the financial performance. This performance reflects the fundamental strengths of our business model, which is driving us towards becoming the leading player globally in the electrical product and power distribution equipment space."

Aztecsoft Q3 net down 80% at Rs 2.2cr

Aztecsoft today reported 80% dip in net profit at Rs 2.19 crore for the third quarter of 2007-08 when compared to the same period last fiscal.

The company has attributed the massive dip to certain one-time costs such as a provision of bonus due to a retrospective amendment of Payment of Bonus Act, 1965; training of campus hires and; reduction in the currency exchange rate for the quarter by 2.23%.

The revenue for the period was Rs 63.31 crore, a 11.25% dip when compared to the corresponding quarter last fiscal.

On a year-on-year basis, the revenue growth in US dollar terms was around 14%.

The company has continued to take a hit following the transfer of the Offshore Development Centre (ODC) operations of Dendrite International. The Dendrite ODC, which contributed about 10% of Aztecsoft's consolidated revenue, was acquired by Dendrite International in January 2007.

The operating profit stood at Rs 2.54 crore, a 78% decline when compared to Q3 2006-07.

On a sequential basis, the net profit declined by 68% while the revenue improved marginally by 2.1%. In US dollar terms, the revenue grew by 5% quarter-on-quarter.

Great Eastern Shipping Q3 net up 77%

Great Eastern Shipping Company today announced a 77% increase in net profit at Rs 293.57 crore for the quarter ended December 31, 2007 when compared with Rs 165.85 crore in Q3FY07.

According to a release to the Bombay Stock Exchange, the company's total income increased to Rs 744.28 crore for the quarter ended December 31, 2007 from Rs 519.85 crore for the quarter ended December 31, 2006

Eicher Motors Q3 net declines 11%

Eicher Motors registered a 11.2 % decline in net profit at Rs 15.8 crore for quarter ended December 31, 2007 as against Rs 17.8 crore in the previous quarter year-on-year (yoy).

The company's total income (net of excise) grew 11 % for the quarter amounted to Rs 554.1 crores as against a total income (net of excise) of Rs 499 crore in the previous comparable quarter. Its EBITDA for the quarter declined 3.4% at Rs 36.5 crores when compared with Rs 37.8 crores in the previous quarter.

Asian Paints Q3 net up 66%

Asian Paints today announced a 66.50% increase in net profit at Rs 118.87 crore for the quarter ended December 31, 2007 when compared with Rs 71.39 crore in Q3FY07.

According to a release to the Bombay Stock Exchange, the company's total income increased to Rs 1,190.82 crore for the quarter ended December 31, 2007 from Rs 943.27 crore for the quarter ended December 31, 2006

Maruti Suzuki: In top gear

Maruti’s sales numbers for the month of December confirm that the passenger car segment remains a growth area. This segment is an exception in the automobile segment, where commercial vehicle and two-wheeler volumes were disappointing in FY08.

After a year-on-year growth of 15.4 per cent in October 2007 and a whopping 26.6 per cent in November, the December sales growth of 9.7 per cent appears slightly tepid. But that’s because of Diwali purchases in November.

Even in terms of absolute numbers, the company had sold a record 65,216 vehicles in November, while December sales were lower at 62,515 units.

Domestic sales grew slower in December at 6.9 per cent, while the export growth was a robust 75 per cent. The growth in its key A2 segment, comprising Alto, Wagon-R and Swift, was low at 2.9 per cent.

The A3 segment grew by 54.7 per cent, thanks to higher SX4 sales. Maruti’s sales have been an impressive 18.5 per cent for the nine months ended December 2007, with domestic sales growth of 16.7 per cent.

The A3 segment grew at the rate of 61.4 per cent and A2 segment was up by 20.2 per cent in the same period. Exports have grown by over 50 per cent this year, though they account for just over 5 per cent of the total volumes.

The higher raw material costs had resulted in a dip in Maruti’s Q2 FY08 operating profit margin by a yearly 80 basis points and quarterly 150 basis points to 13.1 per cent. Going forward, the passenger car segment is going to be in the spotlight.

Steel prices are going up, and though car companies will raise prices this quarter, margins are going to be under pressure, as has been indicated by Maruti’s managing director. Also, Tata Motors’ small car will be unveiled next week.

The Maruti stock has been an outperformer within the sector. It grew 19.7 per cent in the first eight months of FY08 compared with 12.6 per cent in the passenger car industry. Maruti trades at about 13 times FY09 earnings, and should do well.

Suzuki may cut Maruti 800 prices to compete with Tata`s 1 lakh car

Suzuki Motor, facing growing threats to its 50 per cent share of India’s car market, may cut the price of its cheapest car in the country to counter Tata Motors’s proposed Rs 100,000 ($2,500) car.

“We will have to do at least that,” Shinzo Nakanishi, managing director of Suzuki’s local unit, Maruti Suzuki India, said in an interview at the company’s head office in Hamamatsu, Japan, yesterday. Suzuki’s cheapest car in India, the Maruti 800, now costs from Rs 192,124 in New Delhi showrooms, according to Maruti’s website.

Cutting prices may help Suzuki maintain dominance in its biggest market as the company faces greater competition from Tata and foreign rivals including General Motors and Hyundai Motor. Other automakers including Renault have also proposed selling ultra-cheap cars in India, the world’s second-fastest-growing major auto market.

“By cutting prices, the profit margin will drop, and it may also hurt the brand image,” said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments in Tokyo. “Investors care more about profitability than market share.”

Suzuki fell 2.3 per cent to 3,370 yen at the 11 am close on the Tokyo Stock Exchange. The Topix Transportation Equipment Index declined 1.4 per cent. Today is the last trading day of the year, and the exchange closed after the two-hour morning session.

Concern about instability after the assassination of former Pakistani Prime Minister Benazir Bhutto may have contributed to today’s share decline, Ogawa said. Suzuki’s Pakistani unit, Pak Suzuki Motor — the country’s largest automaker — plans to increase production capacity to 250,000 vehicles by 2009, from 120,000 now to meet rising demand.

India sales
In India, automakers are spending $6 billion to increase capacity as economic growth and rising incomes make cars affordable to more people. Vehicle sales may triple by 2015 in the country, where only seven in 1,000 people now own an automobile.

Suzuki, which started selling cars in India in 1983, is relying on growth in the country and in Europe as demand wanes at home. Sales in India of the company’s Swift, Alto and other models rose 18 per cent to 336,758 in the six- months ended September 30, surpassing Suzuki’s sales in Japan for the first time.

The country’s annual passenger-car sales more than doubled in the past five years to 1.08 million in the 12 months ended March 31, according to the Society of Indian Automobile Manufacturers. The total is likely to reach 3 million by 2015, the government estimates.

Renault, Volkswagen
Aiming to tap the growth, Renault and Volkswagen began selling cars in India in the past two years, while Honda Motor — Japan’s second-largest carmaker — plans to unveil its first hatchback model in the country to take on Suzuki.

CSM Worldwide estimates Suzuki’s share in India may drop to 24 per cent in 2013, as cheap cars increase competition. “So far, it’s been easy to maintain a 50 to 55 per cent share, because there weren’t strong competitors,” Nakanishi said yesterday. “But from now on, it won’t be the case.”

Tata Motors, the country’s largest truckmaker, will unveil its $2,500 car in New Delhi on January 10. The yet-to-be-named model would be the nation’s cheapest car and target motorcycle buyers. India is the world’s second-largest motorcycle market behind China.

Suzuki won’t sell a car as cheap as Tata’s because it will be unprofitable, Nakanishi said.

“Demand for both Tata’s car and the Maruti 800, when prices are cut, will be immense,” said Amit Kasat, an analyst at Motilal Oswal Securities in Mumbai, who recommends buying shares in both automakers. “We need to see how much the price will be reduced and how Tata’s cars will be accepted.”

Nissan, Bajaj
Renault and Nissan Motor, Japan’s third-largest automaker, are planning to build a $3,000 model with Bajaj Auto, the country’s second-largest motorcycle maker, to compete in India. Renault, based in Boulogne-Billancourt, France, owns 44 per cent of Nissan.

Spending on expanding factories in India will bring down Maruti’s net income margin, Nakanishi also said. The profit ratio will fall to “7 or 8 per cent” beginning next year, compared with 10 per cent this year, he said.

Suzuki will spend 200 billion yen ($1.75 billion) to expand capacity and to build a research facility in the northern state of Haryana, already home to Maruti’s factories. The research facility will develop cars designed for the Indian market.

The company will invest an additional 200 billion yen by 2010, to raise factory capacity to build the new A-Star car. It will boost output capacity by 300,000 units, increasing total capacity in India to 960,000 by financial year 2009.

Suzuki will start exporting the A-Star to Europe next year. The automaker is counting on the new model to boost annual European sales to 420,000 vehicles from 310,000 last business year.

Maruti Suzuki will use its cash to fully-fund the investments, said Nakanishi. Suzuki will build 1.2 million vehicles in India in financial year 2009 — 1 million for India and the rest for exports, he said.