MSI reports a 59.81 percent decline in Q2 profits at Rs 240.44 crore

The country’s leading car manufacturer Maruti Suzuki India reports that their second quarter sales of the current fiscal 2011-2012 have suffered drastically incurring a profit of mere Rs 240.44 crores against Rs 598.24 crores from FY2010-2011. This is a 59.8% decline in comparison to last fiscal’s profits due to the recurring strikes at the MSI’s Manesar plant. The company’s total turnover is also believed to come down by 14.38% from last year's 9,147.27 crores to Rs 7,831.62 crores during the same period.

The company’s car sales is reported to have fallen from 3,13,654 units to 2,52,307 units during the same period from last year to this year. The continuous labour unrest at the Maruti Suzuki India Manesar plant and its sister concerns during the June-September quarter has accounted for a production loss at 28, 539 units. Moreover, due to the automarket slowdown during the same period because of the volatile petrol prices and the continuous revision of lending rates by the RBI has further fuelled the loss for MSI. The net income of the company during the same quarter is also said to suffer due to the fluctuating foreign exchange rates.

Following the major monetary and the production losses faced by the auto giant, Maruti India has taken a huge step towards setting up a new manufacturing facility outside Haryana. The latest reports confirm that the MSI board has given approval to set up the new facility in the industry friendly state of Gujarat. The site of 1000 acres in the Mehsana district in Gujarat is expected to be the largest in terms of area among the MSI’s manufacturing plants. The company is said to be undergoing the final step of formalities to close the deal with Gujarat Government.

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