NEW DELHI, Oct. 25 (Xinhua) -- Amidst the ongoing economic slowdown in the Indian economy, the country's car major "Maruti Suzuki," which enjoys almost half of car market share in India, has posted a decline in consolidated net profits by nearly 39 percent during the past three months.
This is said to be the steepest quarterly fall in the company's net profits in the past eight years, even as it could sell nearly 338,000 vehicles during the quarter as compared to the same quarter a year ago.
According to the data released by the company, Maruti's consolidated net profits during the quarter stood at 1,391 crores Indian Rupees (about 200 million U.S. dollars).
The main reasons attributed by company sources which led to the decline in profits are - fall in domestic demand due to overall economic slowdown and higher sales promotion expenses to boost sales especially during the ongoing festive season in India.
Net sales during the quarter declined by 25 percent to 16,123 crores Indian Rupees (2.3 billion U.S. dollars), compared to 21,553 crores Indian Rupees (3 billion U.S. dollars) during July-September 2018.
Commenting on the decline in sales and net profits, Company's Chairman (India) R.C. Bhargava said that the current year has been witnessing a significant decline in vehicles sales. "One of the main reasons in the increase in the cost of cars with new safety regulation and emission norms being implemented at the same time. This was coupled with an increase in insurance cost and the hike in road taxes in many states," he reportedly said.
Bhargava further said that the lower availability of finance and the increased down payment requirements at the time of buying a new car had further affected the affordability of the prospective customers.
He, however, added that the current festive season had witnessed a marginal rise in sales.
