Maruti warns of worsening West Asia shipping disruptions, yet exports hold up

what happened

India's largest carmaker, Maruti Suzuki India, has warned of growing shipping problems in West Asia, according to Moody's. Even the alternative routes the company has used to export vehicles are now under strain. Demand in the affected markets remains intact, and the company is looking for new channels to reach customers.

Senior executive officer for corporate affairs Rahul Bharti said at a press conference on Sunday: "The Middle East situation has actually slightly worsened." He added that export growth had come despite the rising difficulties. Maruti's shipments rose 59.3% in October to 49,872 vehicles. The company sells to about 120 countries, but exports to Mexico fell sharply after import duty was raised from 20% to 50%.

The electric e-Vitara is being shipped to Europe and Japan, helping the company expand in developed markets.

why it matters

Logistics hurdles and rising commodity prices have already cut Maruti's profit by 26% to Rs 2,466 crore, while Hyundai Motor India's profit fell 24% to Rs 1,196 crore in the September quarter. Routes through West Asia lead to Europe and North Africa, so the strain also affects other Indian vehicle and two-wheeler exporters.

market impact

Indian automakers: higher logistics costs and route disruptions pressure exports and profits

• ▼Maruti Suzuki shares pressure down — shipping disruptions and higher costs weigh on the company's profit and exports

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