Toyota and Honda are two of the best known car brands in the world. India is no exception. Yet, that doesn’t necessarily translate into regular sales growth. Toyota’s Indian arm, Toyota Kirloskar’s 2008-09 sales and net profit both declined from 2007-08. Sales volume dipped by over 15 per cent.
The company has over Rs 400 crore of reserves and Rs 1,400 crore of cash and bank balances. The debt was close to Rs 1,100 crore at the end of FY09.
Honda India’s balance sheet and profit and loss account showed this and other problems, too. Honda‘s sales also declined, by over 10 per cent, in 2008-09. Unlike Toyota, which still managed to post a profit, Honda showed a loss of roughly Rs 200 crore in its P&L, mainly due to lower sales volume and raw material cost pressures.
|TOYOTA KIRLOSKAR MOTORS|
|(In Rs cr)||FY08||FY09|
|Cash in hand||1,557||1,422|
|Sales volume (in units)||54,245||46,192|
|HONDA SIEL CARS INDIA|
|Sales volume (in units)||59,410||49,952|
The directors’ report of Honda Siel admits as much, to problems with costs, sales and competition. It says, “As a consequence of lower demand, rising input costs, especially due to weakening of the Indian rupee, and restricted ability to pass on higher costs to the market, the company’s financial results from operations for the year 2008-09 were impacted...Your company’s market share in the premium segment dropped from 29 per cent in the last fiscal to 23 per cent, which is mainly attributable to new product launches by other manufacturers (and) enhancement and car assembly operations at its second plant at the Tapukara industrial area in Rajasthan.”
But Honda is optimistic about a turnaround in this financial year, 2009-10, pinning its hopes on new launches like the Jazz.