May 13, 2020 / 10:04 AM / 15 days ago

India's Maruti restarts car output gradually, profit down

BENGALURU/NEW DELHI (Reuters) - Maruti Suzuki (MRTI.NS), India’s top-selling carmaker, has begun to resume production, its chairman said, after the company reported lower fourth-quarter profit, dragged down by weak demand, even before the nation went into lockdown.

FILE PHOTO: Corporate office of Maruti Suzuki India Limited is pictured in New Delhi, India, February 26, 2016. REUTERS/Anindito Mukherjee

The outbreak has aggravated problems for Indian automakers that were forced to suspend manufacturing when the government in late March ordered people to stay indoors.

Maruti said on Wednesday its March quarter profit fell 28% and there was too much uncertainty to predict future earnings.

“As far as this year’s outlook is concerned, it is too early to speculate, there are too many uncertainties,” Chairman R C Bhargava told reporters.

Maruti, which typically sells one in every two cars in India, said it did not sell any in April as the country remained under lockdown.

The government has this month allowed some economic activity to resume in areas where cases of COVID-19, the disease caused by the coronavirus, are zero or low.

But restrictions on movement are still in place and some component makers are unable to restart operations, Bhargava said.

On Tuesday, Maruti resumed production at its plant in the northern Indian city of Manesar - one of three production hubs in the country.

Bhargava said about a third of its dealers have opened for business.

He also said the company has planned capital expenditure of about 29 billion rupees ($384.95 million) for the fiscal year that began on April 1.

Maruti’s net profit fell to 12.92 billion rupees for the three months ended March 31, compared with 17.96 billion rupees a year earlier.

The figure was almost in line with the expectation of 17 analysts that predicted Maruti would post a profit of 12.95 billion rupees, Refinitiv data showed.

Revenue from operations fell 15% to 181.98 billion rupees, said the company, which is majority-owned by Japan’s Suzuki Motor Corp (7269.T). Domestic unit sales dropped 16% to 360,428 vehicles during the quarter.

Reporting by Chandini Monnappa in Bengaluru and Aditi Shah in New Delhi; Editing by Anil D'Silva, Aditya Soni and Barbara Lewis

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