NEW DELHI: India’s top carmaker Maruti Suzuki posted a bigger-than-expected 48 per cent drop in third-quarter net profit on Tuesday, as a global chip shortage slowed production and high raw material costs squeezed margins.
Carmakers, which closed plants or operated at reduced capacities during the height of the pandemic, have found themselves competing against the consumer electronics industry for chips which are a critical component in electronic devices, report agencies.
Demand, however, was strong, and the carmaker said it had more than 240,000 pending customer orders at the end of the third quarter.
Raw material prices and shipping costs have also spiked due to supply chain disruptions, squeezing profit margins at companies looking to recover from the impact of the pandemic.
Car makers have attempted to pass on some of these costs to customers to cushion the blow. Maruti hiked prices at least four times last year.
Maruti, which sells every second car in India, said unit sales fell 13 per cent to 430,668 vehicles from 495,897 cars a year earlier.
Profit came in at Rs 1,011 crore for the three months ended Dec. 31, compared with Rs 1,941 crore a year earlier. Analysts had expected Rs 1,058 crore. Total revenue from operations fell 1 per cent to Rs 23,246 crore.