The sharp fall in share of first-time car buyers hurt Maruti’s FY14 car sales.
Though its rural sales grew 16 per cent, the headline number declined. Maruti’s volumes declined 1.4 per cent to 1,155,041 units in FY14, compared to the year before.
While domestic volumes grew 0.3 per cent to 1,053,689 units, exports declined 16 per cent to 101,352 units.
Net sales in FY14 stayed flat at Rs 42,644 crore (Rs 426.44 billion), while fourth quarter sales declined 9.48 per cent to Rs 11,818 crore (Rs 118.18 billion).
Sequentially, however, there is an improvement in volumes and sales.
Compared to the third quarter, standalone sales, including other income, grew 11.1 per cent to Rs 12,101 crore (Rs 121.01 billion), largely driven by volume growth of 12.7 per cent.
But this volume growth has come at a price, as margins contracted.
Maruti took a hit as it passed on benefits of lower excise duties to dealers, who were sitting on four weeks of inventory.
The company took a hit of Rs 143 crore (Rs 1.43 billion) on account of this payout.
Maruti's operating margins have declined 213 basis points sequentially to 10.3 per cent, largely on
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