For the first time in a decade, homegrown auto major Tata Motors made more money per car in the second quarter than did the country’s biggest carmaker Maruti Suzuki. Maruti Suzuki reported a 24 per cent drop in sales at 1,38,335 units in October. The carmaker had sold 1,82,448 units in October last year. Tata Motors posted a 31 per cent year-on-year (YoY) jump and a 16 per cent month-on-month growth in its total sales.
The operating profit of Tata Motors per car climbed to Rs 45,810 in the second quarter, almost double that of Maruti, according to a report in ET. Currently, Tata Motors—the vehicle manufacturing arm of conglomerate Tata Sons—makes more per vehicle in a market where one out of every two cars still carries the Suzuki logo.
The Mumbai-headquartered auto giant’s operating margins in the passenger vehicle business jumped to 5.2 per cent, a rise of 110 basis points in the second quarter of FY22, while the metric dipped 50 basis points to 4.2 per cent, a multi-quarter low, at Maruti. It is important to mention that the pandemic-ravaged quarter in the first coronavirus outbreak has been kept out of the equation, the financial daily mentioned.
In the September quarter, Tata Motors operating profit at PV segment is corresponding to 45 per cent of Maruti Suzuki. However, volumes sold by Tata Motors are 22 per cent of those at Maruti. Because of persistent growth in the volume backed by the operating power, Tata Motors PV business has been posting positive EBITDA margins for the last five quarters in a row.
The maker of Harrier and Nexon is producing better results than others due to huge demand momentum and flexibility and swift production and supply chain management. Also, it was supported by research and development (R&D) activities that rapidly rolled out re-engineered products relying on standard chipsets.
The business daily pointed out that Tata Motors is currently at the top on capacity utilisation and volumes expansion, while Maruti’s operational functioning has reached the lowest point. However, with the unveiling of new products and recovery in chipset supplies, the country’s largest carmaker is expected to raise its operational performance.
Tata Motors wholesale volumes in the last quarter rose the highest in 33 quarters. Therefore, the market share of the auto company climbed to 11.3 per cent in September 2021, compared with 8.2 per cent in FY21. Maruti’s market share has plummeted due to a shortage of parts.
Further, with higher share of sports utility vehicles (SUVs) in its product portfolio, realization at Tata Motors was at Rs 8.8 lakh per vehicle. Maruti’s average realization is at Rs 5 lakh because the carmaker focuses on the mass market.
