New Delhi, April 28 (PTI): Maruti Suzuki India today reported a 28.55 per cent decline in net profit at Rs 1,635.1 crore for the year ended March 31, 2012 ' the steepest fall in three years ' hit by high commodity prices, sluggish sales and labour issues.
The company had posted a net profit of Rs 2,288.7 crore in the previous financial year.
Maruti managing director and CEO Shinzo Nakanishi told reporters here, "The year 2011-12 was very challenging for the auto industry. High inflation and interest rates along with high petrol prices impacted sales."
The small car segment was particularly hit as the customers are very cost sensitive, Nakanishi added.
He said the company suffered because of its inability to supply more diesel cars at a time the market moved away from petrol cars, which is the mainstay of Maruti.
In 2008-09, Maruti witnessed a 29.6 per cent decline in net profit at Rs 1,218 crore.
"We also had labour unrest in Manesar which impacted sales," Nakanishi said.
A steep rise in the yen along with the fall in the rupee also had an impact on performance, Nakanishi added.
The company sold 11,33,695 units during the year, down 10.8 per cent from 12,71,005 units in 2010-11.
"There is a huge pressure to sell petrol cars and we had increased discounts by about 12 per cent in the fourth quarter of this fiscal compared with the third," Maruti managing executive officer (marketing and sales) Mayank Pareek said.
The company's board, which met today, recommended a dividend of 150 per cent (Rs 7.5 per share of face value Rs 5 each) for 2011-12.
The dividend in 2010-11 was also at the same level. The total outgo from the company on dividend payment will be Rs 240 crore.
For the fiscal ended March 31, 2012, the company's net sales declined 3.2 per cent to Rs 34,705.9 crore from Rs 35,849 crore in the 2010-11 fiscal.
The Gurgaon-based firm's net profit for the fourth quarter of 2011-12 dropped 3.04 per cent to Rs 639.8 crore over the year-ago period.
Net sales, however, rose to Rs 11,486.4 crore for the fourth quarter of 2011-12 from Rs 9,796.7 crore in the year-ago period.