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The passenger car & MUV industry is expected to report a robust 20.8 per cent y-o-y
gro th in sales revenues during the June 2012 quarter. Ne model launches like
the S iIt D`zire compact, the ne S iIt and the Ertiga coupled ith resumption oI
normal production activity at Maruti Suzuki`s plants is expected to result in a 14-15
per cent gro th in the industry`s sales volumes. The industry is currently oIIering
3-4 per cent discount on petrol cars o ing to a decline in demand. Ho ever, a richer
product mix (higher share oI diesel po ered vehicles and mid-sized cars in total
car sales) and price hikes are expected to more than oIIset the negative eIIect oI
discounts. Hence, e expect average sales realisations to rise by 5-6 per cent during
the June 2012 quarter.
Unlike the past three quarters, the industry’s net prots ar e expected to itness a
gro th, albeit oI a slo er 3.6 per cent during the June 2012 quarter. This ill be
eIIected by a robust gro th in sales, a slo er rise in ra material costs and other
expenses.
A likely tepid rise in prices oI ra materials and hedging oI Iorex exposure on direct
and indirect imports by Maruti Suzuki is expected to help the industry control its ra
material expenses during the quarter. The industry`s other expenses are also likely to
rise at a slower pace owing to benehts of economies of scale on resumption oI normal
production. Ho ever, operating expenses (net oI change in inventories) are expected
to rise by a Iaster 21.6 per cent as compared to the gro th in sales. Hence, operating
proets are likely to rise by a slower 11.6 per cent as compared to the gro th in sales.
The industry`s depreciation charges are expected to increase by 35.8 per cent during
the June 2012 quarter o ing to commissioning oI capacities orth Rs.1,700 crore
by Maruti Suzuki in September 2011. This is expected to limit the growth in proits.
Net proat margin is also likely to contract by two percentage points to 5.1 per cent
during the June 2012 quarter.
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May 2012
Ú·¹«®» ï Passenger car & MUV industry to report 24.6° gro th in income in 2012-13
(CMIE Forecast)
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04-05 07-08 10-11 13-14
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(CMIE Forecast)
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Indian Industry A Monthly Review Centre for Monitoring Indian Economy May 2012
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The passenger car industry recorded a healthy 15.1 per
cent y-o-y increase in sales in March 2012 o ing to
preponement oI purchases by buyers to avoid the ex-
cise duty hike and an increase in deliveries by Maruti
Suzuki aIter the resolution oI its labour issues.
The sales gro th, ho ever, as not uniIorm across all
the categories. Boosted by sales oI Tata`s Nano, micro
car sales rose by 18.6 per cent in March 2012. The su-
per compact & mid-size car category`s sales rose by an
impressive 65.1 per cent, aided by fullllment of pend-
ing orders by Maruti Suzuki (aIter the resolution oI its
labour issues) and a robust demand Ior Hyundai`s Verna
Fluence.
Ho ever, sales oI the most volume generating mini &
compact car segment rose by a slo er 6.4 per cent.
Thus, pulling do n the overall industry`s sales vol-
umes.
During the year 2011-12 as a hole, passenger car sales
rose by a mere 4.4 per cent on account oI labour issues
at Maruti Suzuki`s plants and a tepid consumer senti-
ment in the domestic market. Sales in the domestic
market rose by 2.1 per cent during the year. Ho ever,
exports rose by a healthy 14.1 per cent, supporting the
overall gro th in sales.
Ú·¹«®» î Car sales (nos)
2010-11 2011-12
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
160000
180000
200000
220000
240000
260000
280000
300000
320000
Ì¿¾´» ï Passenger car exports Iall by 2.2° in March 2012
Passenger Cars Vans
Sales Sales Exports Exports Sales Sales
(Nos.) (° chg.) (Nos.) (° chg.) (Nos.) (° chg.)
Mar 2011 2,42,699 23.9 50,594 27.4 20,209 31.3
Apr 2011 2,02,372 11.6 42,075 12.3 18,571 38.5
May 2011 1,92,388 6.2 33,571 2.8 20,729 23.5
Jun 2011 1,87,701 5.5 44,331 20.2 18,772 26.9
Jul 2011 1,81,838 -5.7 48,091 40.8 21,466 15.4
Aug 2011 1,93,857 -1.7 49,341 35.2 20,451 6.0
Sep 2011 2,05,043 0.8 39,118 13.8 19,874 10.6
Oct 2011 1,71,420 -19.0 32,899 9.8 16,347 -18.0
Nov 2011 2,12,321 11.5 41,190 35.1 17,627 -8.6
Dec 2011 1,97,571 6.1 38,246 -2.9 16,220 -11.6
Jan 2012 2,43,116 12.9 47,103 44.9 21,427 14.3
Feb 2012 2,45,876 6.8 34,474 -20.3 23,163 24.8
Mar 2012 2,79,349 15.1 49,483 -2.2 22,468 11.2
Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar
2010-11 24,11,059 22.4 4,38,214 -0.8 2,15,940 42.2
2011-12 25,16,037 4.4 4,99,922 14.1 2,37,152 9.8
Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar
2011-12 25,16,037 4.4 4,99,922 14.1 2,37,152 9.8
Note: Monthly igures may not add up to the cumulative total du e to revisions.
Sales includes exports.
May 2012 Indian Industry A Monthly Review Centre for Monitoring Indian Economy
п--»²¹»® Ý¿®- ú Ó«´¬·óˬ·´·¬§ Ê»¸·½´»- 3
AIter gro ing by a strong 42.2 per cent in 2010-11,
sales oI vans rose by a moderate 9.8 per cent during the
year 2011-12. The sales gro th oI the industry ould
have been higher but Ior Maruti Suzuki`s supply issues.
O ing to supply constraints and absence oI diesel mod-
els in its portIolio Maruti Suzuki`s van sales declined
by 10.5 per cent during the year. The company`s mar-
ket share in the vans segment contracted by around 14
percentage points to 61.5 per cent during the year. Ho -
ever, supported by diesel models, Mahindra & Mahin-
dra expanded its market share by 11 percentage points
and Tata Motors gained an additional market share oI
Iour percentage points during the same time period.
Maruti Suzuki, the largest company in the industry it-
nessed a 11 per cent Iall in sales during the year 2011-
12 as a hole. This as eIIected by a 33 day long
labour strike at its production plants, inability oI the
company to service demand Ior diesel po ered cars and
intense competition in the mini & compact car segment
in hich it majorly operates. The company`s market
share contracted by 6.7 percentage points to 39 per cent
during the year.
Taking advantage oI Maruti Suzuki`s inability to ser-
vice demand, Nissan, Volks agen and Toyota Kirloskar
Motors (TKM) expanded their market share by 2-3 per-
centage points during the year 2011-12.
Ì¿¾´» î Maruti Suzuki`s market share shrinks
Sales Gro th Share
(Nos.) (°) (°)
Maruti Suzuki India Ltd. 9,81,424 -11.0 39.0
Hyundai Motor India Ltd. 6,24,703 5.5 24.8
Tata Motors Ltd. 2,65,254 0.9 10.5
Nissan Motor India Pvt. Ltd. 1,33,887 128.1 5.3
Ford India Pvt. Ltd. 1,16,039 7.9 4.6
Toyota Kirloskar Motor Pvt. Ltd. 91,784 377.4 3.6
General Motors India Pvt. Ltd. 87,285 0.0 3.5
Volks agen India Pvt. Ltd. 78,399 51.9 3.1
Honda Siel Cars India Ltd. 54,182 -8.2 2.2
Skoda Auto India Pvt. Ltd. 32,334 49.1 1.3
Mahindra & Mahindra Ltd. 17,839 49.7 0.7
Fiat India Automobiles Ltd. 17,498 -22.1 0.7
Renault India Pvt. Ltd. 3,597 0.1
B M W India Pvt. Ltd. 3,442 8.5 0.1
Mercedes-Benz India Pvt. Ltd. 3,098 13.4 0.1
Hindustan Motors Ltd. 2,953 -59.0 0.1
Audi Motors Ltd. 2,319 92.4 0.1
Force Motors Ltd. 0
Total 25,16,037 4.4 100.0
Ì¿¾´» í Sales oI micro cars rise by 18.6° in March 2012
Micro Cars Mini & Compact Cars Super Compact & Mid Size Cars
Sales Sales Sales Sales Sales Sales
(Nos.) (° chg.) (Nos.) (° chg.) (Nos.) (° chg.)
Mar 2011 12,220 44.0 1,89,624 26.3 35,650 16.4
Apr 2011 14,040 107.8 1,49,991 4.3 32,589 26.7
May 2011 9,582 42.8 1,45,232 1.2 32,424 27.9
Jun 2011 8,430 -20.0 1,49,377 7.2 24,746 7.9
Jul 2011 5,912 -49.6 1,41,458 -4.6 29,769 9.2
Aug 2011 3,672 -66.9 1,47,412 -1.5 37,782 24.4
Sep 2011 5,779 -31.7 1,58,676 0.7 35,167 15.2
Oct 2011 6,558 -5.0 1,30,932 -22.8 30,038 0.0
Nov 2011 8,763 95.9 1,66,238 6.8 34,394 28.7
Dec 2011 10,516 24.6 1,52,774 4.0 31,524 14.6
Jan 2012 10,868 4.4 1,90,601 13.7 38,306 18.7
Feb 2012 12,646 8.6 1,78,125 -0.8 51,362 50.3
Mar 2012 14,493 18.6 2,01,695 6.4 58,873 65.1
Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar
2010-11 1,09,380 58.5 18,95,479 23.0 3,44,083 14.9
2011-12 1,11,259 1.7 19,18,600 1.2 4,33,496 26.0
Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar
2011-12 1,11,259 1.7 19,18,600 1.2 4,33,496 26.0
Indian Industry A Monthly Review Centre for Monitoring Indian Economy May 2012
4 п--»²¹»® Ý¿®- ú Ó«´¬·óˬ·´·¬§ Ê»¸·½´»-
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MUV sales rose by an impressive 34.1 per cent in the
month oI March 2012. The industry recorded its high-
est ever monthly sales oI 40,771 units during the month.
The gro th in sales as led by Toyota Kirloskar Motors
(TKM) hich recorded a 49.8 per cent rise in sales,
aided by the resumption in supply oI certain critical
components and the launch oI the ne Innova model.
The MUV industry closed the year 2011-12 ith a
healthy sales gro th oI 16.7 per cent. A robust 24.4
per cent gro th in sales oI MUVs ith length less than
4,400mm and price less than Rs.15 lakhs drove the in-
dustry`s sales gro th during the year. While Tata Mo-
tors` and TKM`s sales rose by a slo er 7-14 per cent,
Mahindra & Mahindra`s sales gre by an impressive
20.1 per cent.
Launch oI a ne SUVnamed XUV500 and capacity en-
hancement, boosted Mahindra & Mahindra`s sales dur-
ing the year. The company`s market share expanded
by 1.6 percentage points to 55.5 per cent in 2011-12.
Ho ever, Toyota Kirloskar Motors` market share con-
tracted by 1.7 percentage points to 18.6 per cent during
the year.
Ì¿¾´» ì TKM sales rise by 6.7° in April-March 2012
Sales Gro th Share
(Nos.) (°) (°)
Mahindra & Mahindra Ltd. 2,06,442 20.1 55.5
Toyota Kirloskar Motor Pvt. Ltd. 69,234 6.7 18.6
Tata Motors Ltd. 48,494 14.3 13.0
General Motors India Pvt. Ltd. 23,277 16.0 6.3
Maruti Suzuki India Ltd. 6,687 13.5 1.8
Force Motors Ltd. 5,088 47.1 1.4
B M W India Pvt. Ltd. 2,453 858.2 0.7
Ford India Pvt. Ltd. 2,242 -28.6 0.6
Hindustan Motors Ltd. 1,977 -23.0 0.5
Skoda Auto India Pvt. Ltd. 1,755 37.3 0.5
Hyundai Motor India Ltd. 1,611 248.7 0.4
Audi Motors Ltd. 1,062 54.6 0.3
International Cars & Motors Ltd. 494 -24.2 0.1
Mercedes-Benz India Pvt. Ltd. 403 104.6 0.1
Renault India Pvt. Ltd. 367 0.1
Honda Siel Cars India Ltd. 319 -37.7 0.1
Nissan Motor India Pvt. Ltd. 290 -37.0 0.1
Volks agen India Pvt. Ltd. 6 100.0 0.0
Total 3,72,201 16.7 100.0
Ì¿¾´» ë MUVs ith length bet een 4,401-4,700 mm itness 36.4° rise in sales in March 2012
MUV ( ä 4400 MUV MUV ( â 4700 MUV (Rs. 15 MUV (â Rs.25 MUV Total
mm, ä Rs.15 (4401-4700 mm, ä Rs.15 - 25 lakhs) lakhs)
lakhs) mm, ä Rs.15 lakhs)
lakhs)
Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
(Nos.) (° chg.) (Nos.) (° chg.) (Nos.) (° chg.) (Nos.) (° chg.) (Nos.) (° chg.) (Nos.) (° chg.)
Apr 2011 9,845 6.7 14,743 3.1 298 VL 1,651 7.3 323 46.8 26,860 6.2
May 2011 10,547 18.7 14,518 -4.2 287 34.1 1,722 9.3 289 133.1 27,363 5.4
Jun 2011 8,780 9.1 15,518 3.4 612 -51.4 2,215 35.3 294 46.3 27,419 4.9
Jul 2011 9,177 24.6 16,596 9.9 600 131.7 2,558 32.3 263 60.4 29,194 17.6
Aug 2011 8,586 25.1 15,672 3.8 573 130.1 2,102 15.1 315 104.5 27,248 12.6
Sep 2011 11,063 20.2 18,243 7.7 943 171.8 2,343 23.5 307 10.4 32,899 14.8
Oct 2011 9,818 13.4 16,338 -5.4 920 46.5 1,681 -18.6 142 -2.7 28,899 0.5
Nov 2011 9,844 42.0 17,034 30.6 569 36.5 1,535 -4.7 17 -19.0 28,999 31.7
Dec 2011 11,843 42.2 18,326 19.5 664 29.2 1,540 -3.8 16 -33.3 32,389 25.5
Jan 2012 12,130 22.6 20,357 15.0 1,060 61.6 1,666 -22.8 9 50.0 35,222 15.8
Feb 2012 11,706 33.4 21,341 31.7 1,061 141.7 1,882 -10.9 52 136.4 36,042 30.8
Mar 2012 13,872 35.7 23,695 36.4 1,116 121.9 2,056 -7.8 32 -50.8 40,771 34.1
Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar
2011-12 1,25,573 24.4 2,12,371 12.6 8,929 57.5 23,181 4.5 2,147 44.0 3,72,201 16.7
Note: Sales includes exports.
May 2012 Indian Industry A Monthly Review Centre for Monitoring Indian Economy
п--»²¹»® Ý¿®- ú Ó«´¬·óˬ·´·¬§ Ê»¸·½´»- 5
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Supply constraints and deIerment oI purchase by cus-
tomers o ing to high o nership costs resulted in a
muted 4.8 per cent gro th in passenger cars & van sales
during the year 2011-12. With the resolution oI Maruti
Suzuki`s labour issues and addition oI ne diesel en-
gine capacity, the industry`s concerns on the supply side
have no easened.
Further, ne model launches like the ne S iIt and
the S iIt D`zire compact by Maruti Suzuki in Febru-
ary 2012, the ne Sonata by Hyundai in April 2012
and the likely launch oI the Up by Volks agen and the
Cervo by Maruti Suzuki in the second halI oI the year
is likely to increase consumer interest in the passenger
car segment. Corporate salaries are expected to rise by
14-15 per cent during the year, increasing the purchas-
ing po er oI consumers and thus, boosting demand Ior
cars.
Ho ever, petrol prices have been rising continuously
and car makers passed on the hike in excise duty to
customers in April 2012. We expect auto loan rates to
soIten by only 50 basis points during the year. These
Iactors are likely to limit the gro th in passenger car
sales to a healthy yet, moderate 12.4 per cent during the
year 2012-13. Van sales are also expected to gro by
11 per cent during the year.
Multi utility vehicle (MUV) sales rose by 16.7 per cent
during 2011-12, driven by ne model launches like
Mahindra & Mahindra`s XUV 500, Ford`s EcoSport,
BMW`s X1 and Skoda`s Yeti. Aided by a buoyant do-
mestic demand, addition oI ne capacities by Mahindra
& Mahindra and resolution oI Toyota Kirloskar Motors`
supply issues, MUV sales are expected to gro by a
healthy 12.5 per cent during the year 2012-13.
Car manuIacturers completely passed on the 2-4 per
cent excise duty hike to customers in April 2012. Prices
oI major ra materials like steel and aluminium are
likely to rise by 3-6 per cent during the year. O ing
to the price sensitive nature oI customers, car makers
are expected to be able to pass on the input price hike
only partially to customers. While car makers are sell-
ing petrol po ered cars at around 3-4 per cent discount,
an expected increase in the share oI diesel po ered cars
in total car sales is expected to boost the industry`s over-
all realisations. Hence, e expect per unit realisations
to rise by 5-6 per cent during 2012-13.
Ì¿¾´» ê Passenger car market size to cross Rs.1,52,000 crore mark in 2013-14
Units 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
(Estimate) (Forecast) (Forecast)
Production Numbers 16,19,095 20,84,528 26,69,630 27,50,880 30,90,476 35,24,410
Sales Numbers 16,59,777 21,21,915 26,26,999 27,53,189 30,91,804 35,25,460
Export Numbers 3,32,695 4,43,322 4,40,580 5,02,129 5,83,158 6,91,042
Realisation Rs./number 3,46,680.6 3,56,812.3 3,66,981.5 3,93,404.2 4,15,041.3 4,32,058.1
Sales Rs.crore 57,541.3 75,712.5 96,406.0 1,08,311.6 1,28,322.6 1,52,320.4
Ì¿¾´» é MUV sales to rise at a healthy pace during 2012-14
Units 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
(Estimate) (Forecast) (Forecast)
Production Numbers 2,19,498 2,72,883 3,13,142 3,72,648 4,20,667 4,77,163
Sales Numbers 2,28,655 2,75,563 3,18,869 3,72,201 4,18,898 4,75,738
Export Numbers 3,034 2,823 3,746 5,189 5,966 7,157
Realisation Rs./number 5,48,938.6 5,62,662.0 5,85,168.5 6,21,448.9 6,49,414.1 6,78,637.8
Sales Rs.crore 12,551.8 15,504.9 18,659.2 23,130.4 27,203.8 32,285.4
Indian Industry A Monthly Review Centre for Monitoring Indian Economy May 2012
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The passenger cars & MUV industry is expected to it-
ness commissioning oI an incremental capacity oI 3.3
lakh units during the year 2012-13. This ill be over a
5.2 lakh units capacity added in the preceding year.
A healthy domestic demand, backed by rising in-
come levels, increased rural penetration and ne model
launches is encouraging car makers to ramp up their
existing capacities. Also, better gro th prospects in the
Indian market as compared to the developed countries
and the potential to use India as a base Ior exports oI
small cars to South-East Asia and AIrican markets is
encouraging Ioreign car makers like Ford, General Mo-
tors and BMW to set up Iresh capacities.
General Motors is expected to make investments orth
Rs.1,750 crores in 2012-13. The investment ill be
spread across t o projects. The company`s Halol ca-
pacity expansion project involving an investment out-
lay oI Rs.450 crores is estimated to be complete in June
2012. The project on completion ill enhance the Halol
plant`s production capacity to 1.1 lakh units Irom the
existing 85 thousand units. The company is also plan-
ning to expand the capacity oI its Talegaon plant in
phases. The project is expected to be completed by
March 2013 and ill involve an investment outlay oI
Rs.1,300 crores.
Ford Motors announced its plans to invest Rs.750 crore
in its plant in Chennai to manuIacture a ne com-
pact SUV named EcoSport. The investment ill be on
equipment required Ior manuIacturing the product, in-
cluding dies and tools but ill not increase the capacity
oI its plant. This project ill be completed by Decem-
ber 2012. The company is also expected to commission
a greeneld manufacturing plant in Sanand, Gujarat by
March 2014. This ill involve an investment outlay oI
Rs.500 crore and ill result in enhancing the company`s
production capacity by 24 lakh units annually.
Ì¿¾´» è Investment scenario remains healthy
Ne Completed Outstanding Capacity
invst. invst. invst. addition
(Rs.cr) (Rs.cr) (Rs.cr) (Numbers)
2008-09 2,630 8,575 21,832 6,47,000
2009-10 9,015 6,516 23,616 2,70,000
2010-11 1,360 5,623 18,085 5,22,400
2011-12 4,947 6,525 40,782 5,22,000
2012-13 (F) 5,067 3,33,000
2013-14 (F) 7,885 6,40,300
The value oI investments completed may not necessarily
match ith the capacity addition.
Ì¿¾´» ç Top eve passenger car projects expected to be completed by 31 March 2014
Company/Project/Locations Product/ Capacity Unit Cost Compl.
Land Area (Rs.cr) by
M L R Motors Ltd. Passenger cars 60.0 `000 nos 1,100.00 Jun 2012
Passenger Cars & Mini Trucks Project
Muppireddypally, Medak, AP
General Motors India Pvt. Ltd. Passenger car capacity 450.00 Jun 2012
Halol Plant Capacity Expansion Project expansion 25.0 `000 nos
Halol, Panch Mahals, GUJ
Ford India Pvt. Ltd. Ecosport SUV 750.00 Dec 2012
Chengalpattu (Chennai) Ecosport Car Line Project
Chennai, TN
Volks agen India Pvt. Ltd. Passenger cars 20.0 000 nos 380.00 Dec 2012
Chakan Plant Capacity Expansion Project
Chakan, Pune, MAH
B M W India Pvt. Ltd. Passenger car- Phase 2 2.0 `000 nos 70.00 Dec 2012
Chennai Plant Capacity Expansion Project Passenger car-Phase I 2.6 `000 nos
Mahindra City, Chennai, TN
May 2012 Indian Industry A Monthly Review Centre for Monitoring Indian Economy
п--»²¹»® Ý¿®- ú Ó«´¬·óˬ·´·¬§ Ê»¸·½´»- 7
Maruti Suzuki’s sales recover but, net prots
¼»½´·²» ·² Ó¿®½¸ îðïî ¯«¿®¬»®
AIter reporting a decline in sales Ior the past t o quar-
ters, Maruti Suzuki`s sales recovered in the March 2012
quarter. The company`s sales rose by a healthy 17.2 per
cent. With volumes rising by a slower ve per cent, the
sales gro th as realisation driven.
A decline in demand Ior petrol cars and constrained
supplies oI diesel engine po ered cars, Iorced Maruti
Suzuki to oIIer discounts oI around Rs.18,000 on petrol
vehicles. This as higher as compared to discounts
oI around Rs.13,000 doled out in the corresponding
year-ago quarter. Yet, the company`s blended realisa-
tions rose y-o-y by a healthy 11.2 per cent during the
March 2012 quarter. This could be attributed to a richer
product-mix, higher export realisations and price hikes
of around ve per cent taken during the year.
The company’s performance on the pro0ts front was
muted during the quarter. Although sales gre at a
healthy pace, a 160 basis points erosion in operating
prot margins effected a mere 2.3 per cent rise in op-
erating pro6ts. Maruti Suzuki’s raw material costs as a
percentage oI sales expanded y-o-y by 50 basis points
to 79.2 per cent in March 2012 quarter. Prices oI ma-
jor ra materials including steel and aluminium rose
by a mere 1-3 per cent. Ho ever, the company had
to pay a compensation oI around Rs.200 crores to its
vendors Ior Iorex losses in the December 2011 quarter.
This increased its ra material costs. The company`s
salary expenses as a percentage oI sales also expanded
by around 70 basis points to 2.2 per cent o ing to age
increments and orkIorce addition.
Maruti Suzuki`s production as hampered during the
arst three quarters of the year owing to labour problems.
Ho ever, the company`s production returned to normal
levels by March 2012 quarter, giving the company the
benett of economies of scale. The company’s royalty
outgo also remained stable. These Iactors helped the
company`s other expenses to rise in line ith sales dur-
ing the March 2012 quarter.
The company commissioned an incremental capacity
orth Rs.1,700 crore in September 2011. Hence, its
depreciation charges increased y-o-y by 11.4 per cent.
Ho ever, its tax provision declined by 1.5 per cent.
This helped restrict the fall in net prolts (net of change
in stock) to three per cent. The company’s net prot
margin contracted by 120 basis points to 5.3 per cent.
It is interesting to note that oI the Rs.639.8 crore
recorded by the company as net prowts, Rs.296.8 crore
are derived Irom other income. Hence, in the absence oI
other income, the company’s net propts as a percentage
oI sales ould have been a mere 2.9 per cent.
Ú·¹«®» í Maruti Suzuki: Proãt Margins(%)
PBDIT margin PAT margin
D05 M07 J08 S09 D10 M12
0
5
10
15
20
Ì¿¾´» ïð Maruti Suzuki reports 17.2° rise in sales in March 2012 quarter
Income Sales PBDIT PAT PBDIT/Income PAT/Income
Mar 11 Mar 12 Mar 11 Mar 12
(Rs.cr.) (G°) (Rs.cr.) (G°) (Rs.cr.) (G°) (Rs.cr.) (G°) (°) (°) (°) (°)
Maruti Suzuki India 12,023.9 18.8 11,727.0 17.2 1,155.4 2.3 639.8 -3.0 11.2 9.6 6.5 5.3
All income and pro´ t ´ gures are net of prior period and extraordinary transactions.
G%=Growth percentage; Growth is not calculated when egures are negative.
Indian Industry A Monthly Review Centre for Monitoring Indian Economy May 2012
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The passenger car & MUV industry is expected to re-
port a robust 20.8 per cent y-o-y gro th in sales rev-
enues during the June 2012 quarter. Maruti Suzuki ac-
counts Ior more than 95 per cent oI the aggregate sales
revenues oI the listed companies in the industry. O ing
to labour issues its production volumes rose by a mere
3.9 per cent during the June 2011 quarter. While the
company`s problems ere resolved by October 2011, it
resulted in a huge order backlog. Hence, a lo base,
peak production capacity level, increased availability
oI diesel engines and a strong demand Ior its ne ly
launched cars is expected to help the company post
a sales volume gro th oI 14-15 per cent during the
June 2012 quarter. Hence, the industry`s sales revenue
gro th ill be volume driven.
A 3-4 per cent discount on petrol models is expected
to negatively impact realisations. Ho ever, a sharp in-
crease in the proportion oI costlier diesel models in total
car sales, price hikes of around ´ ve per cent during the
past year and higher export realisations are expected to
result in an overall 5-6 per cent rise in average realisa-
tions.
Unlike the past three quarters, the industry is expected
to report a gro th, albeit oI a slo er 3.6 per cent in net
prots during the June 2012 quarter. This will be ef-
Iected by a control over ra material costs and a slo er
rise in other expenses owing to scale bene´ ts and stable
royalty outgo.
Ú·¹«®» ì Passenger cars & MUV: Prot margins (%)
(CMIE Forecast) PBDIT/Income PAT/Income
D06 S07 J08 M09 D09 S10 J11 M12 D12
0
5
10
15
20
Ì¿¾´» ïï Industry to see expansion in prost margins in 2012-13 (% change over a year ago)
Quarterly Annual
Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 2010-11 2011-12 2012-13 2013-14
Estimate Forecast Forecast Forecast Estimate Forecast Forecast
Income -14.7 -16.7 18.3 20.4 32.5 44.7 23.8 -2.3 24.6 17.0
Net sales -14.7 -17.3 16.8 20.8 32.5 45.4 24.2 -3.0 24.9 16.9
Total expenses -14.0 -11.0 17.8 19.5 30.9 37.1 25.9 -0.3 22.5 16.7
Ra materials -16.4 -13.2 17.5 20.0 32.0 40.7 27.0 -1.1 23.3 17.2
Salaries & ages 25.5 -9.6 59.8 14.8 18.5 7.8 27.3 18.6 11.3 10.1
Other expenses 2.4 10.1 18.5 16.1 20.2 16.6 37.9 5.3 13.9 15.1
Depreciation 12.6 25.6 11.1 35.8 26.1 12.4 22.3 12.5 17.5 11.5
Interest expenses 20.6 516.2 137.6 2.3 -46.1 -65.1 -17.8 93.1 -33.1 4.3
Tax provision -63.8 -75.6 1.3 2.8 139.4 313.7 -26.8 -37.2 87.2 20.8
PBDIT -46.2 -46.2 4.1 11.6 92.6 124.0 -6.8 -20.2 52.4 16.4
PAT -64.5 -69.7 -0.7 3.6 170.5 293.2 -8.2 -31.1 71.4 17.6
Other income/Income (°) 1.5 2.0 2.4 1.7 1.4 1.5 1.3 2.0 1.8 1.8
Ra material/Net sales (°) 77.5 80.8 79.1 79.8 77.2 78.2 77.8 79.4 78.4 78.6
Interest/PBDIT (°) 2.6 4.1 2.1 0.9 0.7 0.6 0.9 2.2 1.0 0.9
PBDIT/Net Sales (°) 5.8 4.8 7.2 8.7 9.2 9.0 9.5 6.8 9.1 9.0
PBDIT/Income (°) 7.2 6.7 9.4 10.3 10.5 10.3 10.7 8.7 10.7 10.6
PAT/Income (°) 2.5 2.0 5.1 5.1 5.2 5.4 5.8 4.1 5.6 5.6
All income and propt ngures are net of prior period and extraordinary transactions. PBDIT is net oI other income in
PBDIT/Net sales ratio. Growth is not calculated when egures are negative.
May 2012 Indian Industry A Monthly Review Centre for Monitoring Indian Economy