Maruti Suzuki reported profit during first quarter almost doubled due to weaker yen and increased demand for the Swift DZire and the Ertiga minivans.
Suzuki Motor net income increased to 12.4 billion rupees ($228 million) during the first quarter from 6.4 billion rupees. The increase is due to the decline of the Japanese yen, site as Maruti Suzuki, which is India’s biggest automaker by volume, imports cheaper auto components from Japan. Demand for its most expensive models increased even if total deliveries fell 4.6% to 343,709 units.
“Maruti’s margins should rise with the increasing share of more expensive products like Swift and DZire, as well as the declining yen,” said Basudeb Banerjee, an analyst at Quant Broking Pvt. in Mumbai. “Volumes may not breakout but with the declining yen and better product mix, the margins should get better.”
Maruti’s shares increased 5.2%, heading towards the highest level since September 2009 and the company’s net income reached 11.5 billion rupee, surpassing the analysts’ estimation of 7.05 billion rupee. Deliveries in India during the first quarter were up 4.4% to 1.05 million vehicles, while industrywide auto sales dropped 6.7%, the first time in the past 10 years, due to high interest rates and slowing economic growth which kept customers away from dealerships.