Maruti Suzuki goes in red, reports net loss of ₹249.4 crore in Q1
Maruti Suzuki on Wednesday reported a net loss of ₹249.4 crore in the first quarter of 2020 ending June. Operating loss and falling revenue - primarily owing to the Covid-19-related challenges and subsequent lockdown across the nation - bitterly hurt the country's larget car maker.
Maruti reported that revenue from operations fell substantially - by 79.2% to ₹4,106.5 crore - when compared to the same period from a year ago. However, the figures are still shades better than what was both predicted and feared previously. The company attributed this to lower operating expenses and higher fair-value gain on the invested surplus.
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Maruti managed to sell 76,599 vehicles in the June quarter which is a pale shadow of the over 4 lakh vehicles sold in the same period of last year.
In its BSE filing, Maruti stated that the pandemic and consequent developments led to a challenging quarter. "Operations and financial results for the quarter ended June 2020 have been adversely impacted by the outbreak of Covid-19 pandemic and the consequent lockdown announced by the Government of India due to which the operations were suspended for part of the quarter and gradually resumed with requisite precautions. The results for the quarter are, therefore, not comparable with those for the previous quarters."
The company has also chosen to highlight how it changed priorities in recent months. "The company’s first priority was the health, safety and well-being of all employees and associates across the value chain including its customers. Hence with carefully designed safety protocols, which went far beyond compliance levels, the production in the whole Quarter was equivalent to just about two weeks’ of regular working," it said in a press statement.
Reuters adds: This is the first time Maruti Suzuki India Ltd reported a quarterly loss since its listing in 2003. The loss at Maruti, controlled by Japan's Suzuki Motor Corp, comes days after its peers Mitsubishi Motors and Nissan Motor forecast record losses for the current fiscal year partly due to the pandemic.
While most companies have restarted production, showrooms continue to see lower footfalls and automakers are still waiting for signs of a return in demand.