MUMBAI, INDIA – Suzuki Motor Corp.’s Indian unit, which sells almost half the cars in the country, said it suffered its worst quarterly profit decline since December 2008 as a strike at a factory disrupted production.
Maruti Suzuki India Ltd.’s net income fell 60 percent to 2.4 billion rupees (about ¥3.8 billion) in the July-September second quarter from 5.98 billion rupees a year earlier, the New Delhi-based company said in a statement Saturday.
That is the lowest profit since the quarter that ended in December 2008. Sales fell 16 percent to 75.4 billion rupees.
A 33-day strike at the company’s Manesar factory near New Delhi halted output of Swift compacts, while Chairman R.C. Bhargava said Oct. 19 that each day of the protests resulted in a production loss of about 570 million rupees.
Higher interest rates and fuel prices have increased the cost of ownership by as much as 4 percent, dampening demand for automobiles, he told reporters in New Delhi on Saturday.
“This has not been a good quarter for Maruti,” Bhargava said. The increase in costs “is a substantial burden on our customers. The labor dispute also caused a loss of production.”
The board of directors Saturday approved buying as much as 5.7 sq. km of land for future expansion in the western state of Gujarat, where General Motors Co., Tata Motors Ltd. and Ford Motor Co. have plants. Vehicle sales at the company fell 21 percent in September.
The Manesar factory resumed production in October. Separately, workers at Suzuki Powertrain India Ltd., which supplies engines and transmissions to Maruti Suzuki, walked off their jobs in September at a plant in Gurgaon, near New Delhi, for two days.
The strike at Maruti came as Indian carmakers in Asia’s third-largest automobile market cut their sales forecasts for a second time this year. The Reserve Bank of India has raised rates 13 times since mid-March 2010 in a country where about 80 percent of purchases are funded by loans. Sales of Maruti’s best-selling Alto small car dropped 20 percent in the quarter.
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