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Every vehicle brings more money for the car makers

Every vehicle brings more money for the car makers

The total industry volume for the vehicle market must have dropped to a decade low Hyundai. The higher level realizations have meant revenues for the top car manufacturers have returned to the pre-COVID levels.

The shift towards higher prices vehicles and SUVs meant that the lower market share companies such as Kia and Hyundai are making more revenue per vehicle.

In FY22, Maruti Suzuki, despite selling 11%lower volumes than in the financial year of 2019, had delivered almost the same revenues, while the Tata Motors has to be a strong tailwind in its volumes, saw its revenue double since the financial year of 2019; even the volumes grew 76%.

While the largest market share is with Maruti Suzuki, its operating margin over the last few years has dropped by over 500 basis points in the last several years. On the contrary, Hyundai continues to operate double-digit margins from the financial year of 2019 to the financial year of 2021.

The biggest gainers in the profits have been Kia India and Tata Motors. From a negative operating margin in the financial year of 2019 for Tata Motors, the market of Nexonswung into a 5% operating margin at the end of the financial year of 2022, whereas the Kia operations broke even in less than three years off the Automobile companies’ entry and the Kia is itching towards a double-digit operating margin.

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Written by CBTEAM

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