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Reuters
NEW DELHI/BENGALURU
Maruti Suzuki India said on Thursday it would stop making all diesel cars beginning April next year and forecast a weak rate of growth for the current fiscal year, blaming uncertain fuel prices and the onset of stricter emission norms.
Carmakers will need to invest in upgrading their technology, including for diesel cars, to meet India’s stricter emission norms that come into effect next year.
“From April 1, we will have no diesel car on sale. Depending on how customers react... if we find there is a market for diesel cars (after the new emission norms kick in) we will develop it in a reasonable amount of time,” Chairman R. C. Bhargava told reporters at a press conference in New Delhi.
The country’s biggest automaker, majority owned by Japan’s Suzuki Motor, said it expected production and sales to grow between 4 percent and 8 percent for the financial year started in April.
Last year, the company targeted a 10 percent rate of growth for sales but actual sales grew by just 6.1 percent, the company said in a statement.
While Maruti Suzuki’s growth forecast is in sync with the broader industry outlook, high levels of discounting by Maruti had resulted in “disappointing” quarterly margins, said analyst Ashutosh Tiwari of Equirus Securities in Mumbai.
“It looks like the (margin) trend will continue this year,” Tiwari said.
Maruti Suzuki saw fourth-quarter EBITDA margins falling to 10.8 percent from about 12.5 percent in the same quarter last year. EBITDA margins for the year fell to 14 percent from 15.9 percent a year ago.
The carmaker said it sold 458,479 vehicles in the three months ended March 31, down 0.7 percent.
The company, which helped raise car ownership in India nearly four decades ago with its iconic Maruti 800 model, has since also added cars like the Baleno and Alto hatchbacks.
However, Maruti Suzuki saw negative sales growth in urban markets, Bhargava said.
Growing use of app-based cab services such as Ola and Uber Technologies, tighter credit and market uncertainty ahead of India’s general election have all weighed on the auto industry, hurting sales of private cars.
This has spurred a fierce battle for market share, forcing companies to introduce heavy promotions to lure buyers.
Maruti Suzuki’s net profit for the fourth quarter beat market expectations but fell 5 percent to 17.96 billion rupees ($256.10 million) from a year earlier.
The results compared with the 17.47 billion rupees average of 22 analysts’ estimates compiled by Refinitiv Eikon.
Total revenue from operations rose 1.4 percent to 214.59 billion rupees.
Maruti Suzuki shares closed down 1.59 percent.AFP
New York
Electric carmaker Tesla on Wednesday announced a heavy loss in the first quarter as car deliveries sputtered overseas and a US tax credit that made its prices more attractive was reduced.
The California-based company reported a loss of $702 million in the first three months of this year after two consecutive quarters of profit.
Tesla produced about 63,000 Model 3 vehicles in the period, an increase of three percent from the same quarter a year earlier but fewer than had been anticipated.
The company attributed its disappointing financial results to Model 3 shipping delays, particularly in Europe and China.
Overall company revenue in the period rose 33 percent to $4.5 billion in a year-over-year comparison, but fell far short of Wall Street forecasts.
The company’s shares that finished the formal trading day down nearly two percent to $258.66 were essentially flat in after-market trades that followed release of the earnings figures.
Tesla’s quarterly loss followed changes to pricing and reversals in the way the company sells vehicles.
In late February Tesla said its Model 3 -- heralded as an electric car for the masses -- was available for order online only, at a price of $35,000 with delivery promised within a month.
The following month it reversed course, saying it would keep many of its showrooms open -- but would need to hike prices to do so.
Then, in April, the carmaker ended internet sales of its cheapest Model 3 sedan in another shift to the company’s retail strategy.
Tesla planned to keep taking online orders for the Standard Plus Model 3, which starts at $39,500 and became the lowest-price option available to digital consumers.
But online customers could no longer order the Model 3 Standard for $35,000, a long-promised price for a vehicle that has been seen as essential to CEO Elon Musk’s ambition to disrupt the auto industry.
A challenge to vehicle demand has been the lowering of a US tax credit on Tesla vehicles to $3,500 from $7,500 previously.
Jessica Caldwell, Edmunds.com executive director of industry analysis, said there were “many signals that the brand is running out of steam.”
Edmunds research indicated that most of the vehicles Tesla made in the first quarter were shipped overseas, suggesting US demand was softening, according to Caldwell.
NEW DELHI/BENGALURU
Maruti Suzuki India said on Thursday it would stop making all diesel cars beginning April next year and forecast a weak rate of growth for the current fiscal year, blaming uncertain fuel prices and the onset of stricter emission norms.
Carmakers will need to invest in upgrading their technology, including for diesel cars, to meet India’s stricter emission norms that come into effect next year.
“From April 1, we will have no diesel car on sale. Depending on how customers react... if we find there is a market for diesel cars (after the new emission norms kick in) we will develop it in a reasonable amount of time,” Chairman R. C. Bhargava told reporters at a press conference in New Delhi.
The country’s biggest automaker, majority owned by Japan’s Suzuki Motor, said it expected production and sales to grow between 4 percent and 8 percent for the financial year started in April.
Last year, the company targeted a 10 percent rate of growth for sales but actual sales grew by just 6.1 percent, the company said in a statement.
While Maruti Suzuki’s growth forecast is in sync with the broader industry outlook, high levels of discounting by Maruti had resulted in “disappointing” quarterly margins, said analyst Ashutosh Tiwari of Equirus Securities in Mumbai.
“It looks like the (margin) trend will continue this year,” Tiwari said.
Maruti Suzuki saw fourth-quarter EBITDA margins falling to 10.8 percent from about 12.5 percent in the same quarter last year. EBITDA margins for the year fell to 14 percent from 15.9 percent a year ago.
The carmaker said it sold 458,479 vehicles in the three months ended March 31, down 0.7 percent.
The company, which helped raise car ownership in India nearly four decades ago with its iconic Maruti 800 model, has since also added cars like the Baleno and Alto hatchbacks.
However, Maruti Suzuki saw negative sales growth in urban markets, Bhargava said.
Growing use of app-based cab services such as Ola and Uber Technologies, tighter credit and market uncertainty ahead of India’s general election have all weighed on the auto industry, hurting sales of private cars.
This has spurred a fierce battle for market share, forcing companies to introduce heavy promotions to lure buyers.
Maruti Suzuki’s net profit for the fourth quarter beat market expectations but fell 5 percent to 17.96 billion rupees ($256.10 million) from a year earlier.
The results compared with the 17.47 billion rupees average of 22 analysts’ estimates compiled by Refinitiv Eikon.
Total revenue from operations rose 1.4 percent to 214.59 billion rupees.
Maruti Suzuki shares closed down 1.59 percent.AFP
New York
Electric carmaker Tesla on Wednesday announced a heavy loss in the first quarter as car deliveries sputtered overseas and a US tax credit that made its prices more attractive was reduced.
The California-based company reported a loss of $702 million in the first three months of this year after two consecutive quarters of profit.
Tesla produced about 63,000 Model 3 vehicles in the period, an increase of three percent from the same quarter a year earlier but fewer than had been anticipated.
The company attributed its disappointing financial results to Model 3 shipping delays, particularly in Europe and China.
Overall company revenue in the period rose 33 percent to $4.5 billion in a year-over-year comparison, but fell far short of Wall Street forecasts.
The company’s shares that finished the formal trading day down nearly two percent to $258.66 were essentially flat in after-market trades that followed release of the earnings figures.
Tesla’s quarterly loss followed changes to pricing and reversals in the way the company sells vehicles.
In late February Tesla said its Model 3 -- heralded as an electric car for the masses -- was available for order online only, at a price of $35,000 with delivery promised within a month.
The following month it reversed course, saying it would keep many of its showrooms open -- but would need to hike prices to do so.
Then, in April, the carmaker ended internet sales of its cheapest Model 3 sedan in another shift to the company’s retail strategy.
Tesla planned to keep taking online orders for the Standard Plus Model 3, which starts at $39,500 and became the lowest-price option available to digital consumers.
But online customers could no longer order the Model 3 Standard for $35,000, a long-promised price for a vehicle that has been seen as essential to CEO Elon Musk’s ambition to disrupt the auto industry.
A challenge to vehicle demand has been the lowering of a US tax credit on Tesla vehicles to $3,500 from $7,500 previously.
Jessica Caldwell, Edmunds.com executive director of industry analysis, said there were “many signals that the brand is running out of steam.”
Edmunds research indicated that most of the vehicles Tesla made in the first quarter were shipped overseas, suggesting US demand was softening, according to Caldwell.
