Profit fails to keep pace with speeding car sales

Adverse commodity price movement, tough market environment take toll even as sales volumes and revenues rise

Rising sales volume and revenue are no longer translating into a corresponding rise in profit for top automobile firms like Maruti Suzuki, Hero MotoCorp, Bajaj Auto, and Ashok Leyland. Profit growth at these companies have considerably slowed from high double-digits during the first half (H1) of FY17 to a low single-digit this year, thanks to the adverse movement in commodity prices and a challenging market environment. Many companies are also faced with higher tax and a wage burden.

Maruti Suzuki, the country’s biggest car maker, saw its profit grow by less than four per cent in H1 this year, against 43