Maruti Suzuki India Ltd. reported first-quarter profit in line with the estimate as easing semiconductor crisis boosted sales. The nation’s biggest carmaker announced buying its Japanese parent’s plant in the western state of Gujarat.
(Bloomberg) — Maruti Suzuki India Ltd. reported first-quarter profit in line with the estimate as easing semiconductor crisis boosted sales. The nation’s biggest carmaker announced buying its Japanese parent’s plant in the western state of Gujarat.
The board approved acquiring Suzuki Motor Gujarat Pvt. — with which it had a contract manufacturing agreement — from Suzuki Motor Corp.
The plant where Suzuki had planned to produce electric vehicles will now allow Maruti’s own workforce to gain skills in making clean technology cars, Chairman R.C. Bhargava said in a media call Monday.
Maruti targets EV debut in 2025. It plans to launch six battery models by fiscal year 2031 across different vehicle classes, Chief Executive Officer Hisashi Takeuchi has said.
The mode of acquisition and payment for the plant will be finalized in the next board meeting, according to the filing. The deal is expected to close by March end, Bhargava said, without specifying the value of the plant.
Maruti had just $5.1 million in cash and cash equivalents as on March 31, according to data compiled by Bloomberg.
Its net income was 24.9 billion rupees ($303 million) for the three months ended June 30, compared with 10.1 billion rupees a year earlier. That met the average analyst estimate of 24.66 billion rupees.
Revenue rose 22% to 323.3 billion rupees, beating estimates. Total costs advanced 19% to 301.4 billion rupees, while raw material expenses declined 14% compared with a year ago.
Maruti, like its competitors, is battling rising input costs along with the tight supply of semiconductors. The carmaker has raised vehicle prices to protect its margins from higher raw material costs.
Production in June slid to 137,133 units from 144,409 as the shortage of electronic components had a minor impact. Bhargava said that semiconductor shortage-related problems won’t be of “serious order” going forward.
Maruti is expanding its lineup to cater to high-end buyers as the company pivots away from small and cheaper cars. It unveiled its costliest car, Invicto, earlier this month and has plans to increase its market share in the sport utility vehicle segment.
Its parent Suzuki is planning to invest about 2.8 trillion rupees by the end of the decade to enhance products, introduce new technologies and set up facilities in India, Maruti’s Takeuchi has said.
(Updates with chairman’s comments in third paragraph.)
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