India's largest selling car maker, Maruti Suzuki India Ltd, posted a lower-than-expected first-quarter profit on Thursday, as forex losses and increased costs of raw materials partially offset higher sales of compact and utility vehicles. The company, majority-owned by Japan's Suzuki Motor Corp, reported a profit of 19.75 billion rupees ($287.38 million) for the quarter ended June 30, versus 15.56 billion a year earlier. That compared with an average estimate of 22.71 billion rupees by 18 analysts, according to Reuters.
Total revenue from operations rose 13.6 percent to 224.59 billion rupees, the company said. Maruti's operations are key for Suzuki as it provides the bulk of the Japanese automaker's revenues, and has a market value of more than $43 billion, around 1-1/2 times that of its parent.
Maruti Suzuki had recently crossed the production milestone of 20 million vehicles in India at its Gurugram and Manesar facilities. According to the company, the distinctive feat has been attained in 34 years and 6 months since the start of production in December 1983. Apart from this, Maruti had also made a statement that it will proactively and voluntarily undertake a recall for 1,279 vehicles (566 new Swift and 713 new Dzire) manufactured during May 7 to July 5, 2018 to inspect for a possible fault in the airbag controller units.
Maruti sold 490,479 vehicles during the quarter, up 24.3 percent from a year earlier. Sales of compact vehicles, which include the Swift and Baleno, rose 49.8 percent, while sales of utility vehicles, including the Ertiga and Vitara Brezza, climbed 15.1 percent. Suzuki this year announced an agreement with Toyota Motor Corp for the Indian market, by which Suzuki will supply its Baleno hatchback and Vitara Brezza to Toyota, while Toyota will produce the Corolla sedan for Suzuki. Shares of the New Delhi-based car maker were down 3.6 percent.
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