Maruti Suzuki's Q4 net profit down three percent

New Delhi, April 28 (IANS) Passenger car major Maruti Suzuki Saturday reported a decline of three percent in its net profit which stood at Rs.639.8 crore for the fourth quarter of 2011-12 and also said its total diesel engine production will reach four lakh this year.

The company had posted Rs.659.9 crore net profit in the corresponding quarter of 2010-11.

Maruti Suzuki's net sales stood at Rs.11,486.4 crore in the quarter under review, up 17.2 percent from Rs.9,796.7 crore posted in the fourth quarter of 2010-11.

The automobile major's sales went up by 4.9 percent at 360,334 units in the January-March 2012 quarter from 343,340 units sold in the corresponding period of 2010-11.

The company said that adverse currency movements had made a significant impact during the quarter under review and said this was largely offset through localisation and internal cost control.

"There appers to be some stability in currency rates and with some efforts to hedge Maruti Suzuki direct and vendors Yen import, we hope to limit the impact of the Yen," said Shinzo Nakanishi, managing director and chief executive, Maruti Suzuki.

"We will also try to improve our margins from the current levels with economy of scale, cost reduction measures and better price realisation. The Indian market is rapidly becoming diesel vehicle market, we will have to come out with a strategy to increase production and reduce risk on diesel engine supply."

Nakanishi added that the company's total diesel engine production will reach four lakh in this year.

The company added that it will take certain steps to arrest the drop in the petrol car sales like identifying customers who are not affected by petrol price hike and aggressively pushing for an exchange scheme for old petrol cars.

"It is certainly harder to sell a petrol car, because of the skew towards diesel cars. We have increased our dealers margins as it has become harder for selling petrol cars and we will initiate certain ways to increase sales of petrol cars," said Mayank Pareek, chief general manager, marketing, Maruti Suzuki.

For the full fiscal 2011-12, the company reported a decline of 28.6 percent at Rs.1,635.1 crore from Rs.2,288.7 crore for 2010-11.

The company's board has recommended a final dividend aggregating to Rs.216.68 crore, which comes down to Rs.7.5 per share (for nominal value of Rs.5.00 per share).