Moneycontrol
Last Updated : Nov 08, 2017 01:25 PM IST | Source: Moneycontrol.com

In a first, Maruti revenues go past parent Suzuki's Japanese sales

For the first time in its existence, Maruti Suzuki has generated more revenue than that of Japanese parent Suzuki Motor’s local business.

Swaraj Baggonkar @swarajsb
 
 
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For the first time ever, revenues of Maruti Suzuki surged past those of its parent's local business, thanks to the strengthened hold of the Indian company over the market, and underpinning its importance for its Japanese parent Suzuki Motor Corporation.

The maker of cars such as Baleno and Swift, Maruti Suzuki's net revenues stood at Rs 66,909 crore last year as against Rs 60,047 crore (standalone) net sales posted by Suzuki Motor Corporation during the same year.

Absolute sales of Maruti Suzuki last year stood at 15.65 lakh units as compared to 6.39 lakh units of Suzuki, Japan. When compared to 2015-16, Maruti recorded a much bigger jump. In 2015-16, Maruti Suzuki sold 14.29 lakh units as compared to 6.3 lakh units sold by Suzuki Japan.

RC Bhargava, Chairman of Maruti Suzuki India, termed the development as not surprising. "Our car sales have been higher than Suzuki Japan but their per unit price is higher than us. Their home market sales have not grown during the past 2-3 years.”

Maruti royalti to suzuki yearwise

Suzuki Japan’s revenues also include revenues from its motorcycle business whereas for Maruti Suzuki its revenues are based only on sales of passenger vehicles. Suzuki also sells motorcycles and scooters in India but has a minuscule market share.

Thanks to the success of new models like Baleno, Brezza, Ignis, Celerio and Ciaz (refreshed) Maruti has been able to strengthen its hold over the Indian market during last year. With the addition of the all-new Dzire a few months ago, Maruti has improved its market share to more than 50 percent in the domestic market.

This year so far, Maruti Suzuki beat the industry’s growth with 17 percent increase in volumes at 8.22 lakh during the April-September period as compared to the same period last year. The industry so far during the same period posted a growth of 9 percent at 11.63 lakh units.

Though the Delhi-based carmaker faced constraints with regards to production capacity for the whole of last financial year, with the start of production at its newest plant in Gujarat, Maruti Suzuki was able to ramp up production at a significant pace. This brought down the waiting period on certain models from six months to a few weeks.

The Japanese passenger vehicle market during the last four years fell 4 percent to 8.02 million units last year (8.34 million) whereas the Indian passenger vehicle market closed last year at 3.04 million units as compared to 2.5 million units posted four years ago, reporting a growth of 22 percent.

New launches lined up — two new models every year till 2020 — and a sustained improvement in new vehicle purchases will likely help Maruti Suzuki maintain its lead over Suzuki Motor Corporation, Japan.

Meanwhile, Maruti Suzuki’s royalty payout to its parent company has grown nearly four times in the last eight years. By the end of the last financial year, Maruti Suzuki had paid Rs 3,848 crore. In 2009-10 this figure stood at Rs 1,016 crore.

Royalty paid by Maruti

Royalty thus paid to Suzuki now accounts for 52 percent of profit after tax as of the last financial year compared to 36 percent in 2014-15 and 13 percent in 2005-06.
First Published on Oct 18, 2017 03:34 pm
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