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Maruti pays all time high royalty to Suzuki in FY2016

Maruti Baleno DDiS 200 being planned

Maruti’s double-digit growth and benign raw material prices last fiscal resulted in increased profit.

Suzuki Motor Corporation’s Indian subsidiary (Maruti Suzuki India Ltd.) has been its single largest contributor when it comes to net income through royalties and dividends. In the last financial year which concluded in March 2016, Maruti’s contribution to its parent’s net income (profit) stood at an impressive 54.5% as against 52.76% in the year before.

The small car specialist’s overall profit in the last fiscal stood at INR 7,291 crores of which INR 3,975 crores came from Maruti Suzuki in the form of royalties and dividends. This also marks the highest ever contribution from Maruti to its parent company in the history. Between April 2014 and March 2015, the Indian subsidiary managed to contribute INR 3,194 crores so the growth in last fiscal stands at 24%.

Maruti S-Cross recall

Maruti’s new car models were the primary growth drivers last fiscal.

In terms of sales, Maruti Suzuki accounted for half of Suzuki’s global performance of 2.86 million units in the last financial year. Maruti’s record sales volume combined with benign raw material prices lead to increased revenue and profit.

The introduction of new models such as the Baleno and S-Cross in addition to growth from models like Ciaz SHVS proved to the primary growth drivers for Maruti.

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This contribution is expected to be even higher in the ongoing fiscal.

Also read – Maruti S-Cross to be recalled

In the last fiscal, the country’s largest passenger car maker witnessed its market share grow from 45% to 47%. Maruti Suzuki India Ltd. appears to be on track to become a 2-million-units-a-year company by 2020.

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About the author

Nithyanandh Karuppaswamy

Winner of national level automotive quiz competitions, Nithyanandh aka Nithz jumped into the blogosphere right after gaining a degree in Mechanical Engineering. Love for automobiles and an even greater drive to share his knowledge with the automotive community, Nithz is Deputy Editor at RushLane.

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