Maruti's net profit falls 5 percent, lags estimates.

New Delhi, Tue, 30 Oct 2012 ANI

New Delhi, Oct. 30 (ANI): India's automobile major, Maruti Suzuki on Tuesday lagged

estimates with a five percent fall in profit, its fifth consecutive quarterly decline.

Shares in Maruti, however, rose as much as 4.2 percent after the earnings as the sales

volume in the quarter was better than expectations and traders expect a pickup in demand

in the months ahead.

Maruti, controlled by Japan's Suzuki Motor Corp said net profit fell to 2.27 billion rupees

in the second quarter of the fiscal year that began in April, from 2.40 billion rupees a year


Net sales rose 8.5 percent to 80.7 billion rupees, the company said in a statement, helped

by improved sales of its newly launched Ertiga.

The company's Managing Director (MD) and Chief Executive Officer (CEO) Shinzo

Nakanishi said in New Delhi that adverse macroeconomic situations had led to the

reduction in profits.

"There was a background of challenging macroeconomic situation and weak market

sentiment in the country, owing to huge distortion in the price of petrol and diesel," said


"The company had an unfortunate incident of large scale labour violence at the Manesar

plant in July, and was forced to lock out the plant for almost a month to ensure the safety

of our employees," he added.

Maruti was forced to close its Manesar unit for more than a month after labour unrest

erupted into a mob riot that left one manager dead and scores of other executives and

staff members injured.

Nakanishi said that the company had resumed operations at this plant, and expected the

operations to reach its full production capacity.

Earlier this month, the company made an aggressive move to boost sales of its largest

selling 'Alto' model, with the revamped 'Alto 800' launched in the entry-level segment.

Sales of Maruti's entry-level models are down 21 percent so far in the current fiscal year,

hit by greater competition from rivals including Hyundai Motor Company's Eon and Tata

Motors Limited's Indian-made Nano. (ANI)

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