India's biggest carmaker Maruti Suzuki reported a surprise 20 percent fall in quarterly net profit on July 24 as the company was pummelled by higher raw material costs. Maruti, majority-owned by Japan's Suzuki Motor Corp, said net profit during the fiscal first quarter slipped to 4.65 billion rupees (99 million dollars) from 5.84 billion rupees a year earlier.
The fall came as a surprise to financial analysts who had forecast that the company, which sells half the cars in India, would report a profit of around 6.6 billion to seven billion rupees for the three months to June 30.
"The drop in net profit is due to higher commodity prices" along with other factors such as a fall in earnings from European exports due to a weakening euro, the company said in a statement.
The firm has also been facing mounting competition from a host of globals - from South Korea's Hyundai Motors to General Motors of the United States - that have launched new cars in India to grab a larger slice of the fast-growing market and counter sluggish demand in developed countries.
Domestic competitors also are stepping up pressure on Maruti. India is now Asia's third-largest car market, outstripped only by China and Japan, and is one of the few countries where automobile sales are rapidly increasing.
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