India’s largest carmaker by market share, Maruti Suzuki, said the second wave of COVID-19 has adversely affected production and sales in Q1 FY2022.
The company’s financials and operations in Q1 FY2022 fared better than Q1FY2021, but it is not a meaningful comparison because Q1 last year suffered a worse impact of the pandemic due to a higher degree of hindrances.
Sales in Q1 FY2022 remain far below the previous high of 490,479 units reported in Q1 FY2019.
The company sold 353,614 units in Q1FY22, with 308,095 units sold domestically and 45,519 units exported. Compared to Q4, sales have dipped 28pc owing to the pandemic-related disruptions, which led to lower capacity utilization, noted the company.
Commodity prices continued to increase and were a negative factor for the company. Compared to Q1 FY2021, sales have risen by four-folds as capacity utilization improved. Adverse commodity prices continue to hurt the company. Since Q1 FY21, steel prices have almost doubled in a year, and several automakers and auto associations have noted that the hike is hurting the auto sector. Steel prices, however, corrected by 5-10pc at the start of Q2 (early July) from the price hikes announced in June.
Net sales in Q1FY2022 stood at Rs167,987mn ($2,261mn) against Rs36,775mn last year. Net profit stood at Rs4,408mn in Q1 against a net loss of Rs2,494mn in Q1FY2021. Profits were impacted by lower-than-expected sales and rising commodity prices which rose steeply in the quarter.