New Delhi: In Covid-19 pandemic and lockdown several sectors of economy are badly hit. Auto Sector Leading Company Maruti Suzuki is likely to report its 1st ever quaterly loss in more than a decade.
The Auto Company is expected to report a net loss of Rs380 crores. It can be seen as 82% year-on-year decline in revenue.
Vehicle manufacturers like Maruti had to shut their factories and showrooms from March 22, following the lock down announced by the Union and state governments to contain the spread of the Covid-19 pandemic. the corporate though within the meantime worked with its suppliers and dealers to make standard operating procedures (SOPs) that needed to be followed once manufacturing and retail operations started.
In April, the corporate couldn’t manufacture or sell vehicles thanks to the nationwide lockdown in situ .
After resuming production on May 12 at its Manesar-based factory in Haryana, the corporate reported wholesale of just 13,865 units during the month. Factory dispatches improved significantly to 51,274 units in June as demand for its entry level vehicles started learning .
“The auto industry saw slump in wholesale dispatches thanks to the nationwide lockdown resulting in no production and sales for first six weeks of Q1FY21 and restricted activity for the latter a part of the quarter. During the quarter, we witnessed that retail demand trends remain modest thanks to lack of normal commercial activity in containment zones, which accounted for one third of the sales,” said analysts of ICICI Securities during a note.
Investors though are optimistic that Maruti, will enjoy a shift in demand towards small cars thanks to the faster recovery in demand within the rural areas and increasing preference for private mobility, and is best positioned to tackle current economic downturn compared to most of its competitors