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Auto Giants Squeezed by Rising Costs
3 Aug
Summary
- Maruti Suzuki's sales grew 29.3% but operating profit margin shrank.
- Mahindra & Mahindra's revenue grew 23% despite rising material costs.
- Hyundai India's vehicle sales and net profit declined significantly.
In the June 2026 quarter, leading automotive manufacturers Maruti Suzuki India, Mahindra & Mahindra, and Hyundai Motor India navigated a difficult operational landscape. Rising costs of steel and copper adversely affected their profit margins and net earnings. Maruti Suzuki India reported a substantial 29.3% year-over-year growth in vehicle sales, reaching 6.82 lakh units, largely attributed to its recently commissioned Kharkhoda plant in Haryana. However, the increased material costs led to a 380 basis points shrinkage in its operating profit margin, resulting in an 11% decline in net profit to Rs 3,352 crore. Mahindra & Mahindra's total SUV sales increased by 15% to 1.74 lakh units and tractor sales by 18% to 1.58 lakh units. Despite a 23% rise in revenue to Rs 41,919.7 crore, its operating profit margin decreased by nearly 200 basis points. Hyundai India experienced a 1.3% dip in total vehicle sales to 1.78 lakh units, exacerbated by a 19.6% decline in exports and temporary production issues. Its operating profit margin fell by 420 basis points, and net profit saw a nearly 34% decrease to Rs 883.1 crore. Looking ahead, the automotive industry will closely monitor raw material price trends and demand conditions, especially with the festive season approaching. Companies have implemented price hikes to mitigate higher input costs.
