Mahindra profits tank 99% amidst currency woes
You think that General Motors and Chrysler are in trouble? Take a look at India's largest SUV-maker, Mahindra. It posted a whopping 99% drop in profits last quarter due to the double blow of a 26% sales dip and a "currency loss."
The lack of interested car buyers is an all-too-familiar theme, but the currency loss is more complicated. In a statement, Mahindra said the loss was due mostly to "cancellation of forward covers entered into by the company to hedge certain anticipated exports." Translation: the company invested in the currency markets to cover any possible losses in its exports. When the rupee fell 19% last year, there was nothing to cover Mahindra's 54% drop in exports. But despite all that, the company actually did manage to make a profit, even if it was only $245,000.
What does this mean to you? Other than being another name on a growing list of carmaker carnage, it could mean an even longer delay for everyone hoping to buy one of Mahindra's trucks in the U.S., not to mention that Mahindra is almost definitely not interested in Hummer now.
[Source: Bloomberg]
Reader Comments (Page 1 of 1)
Tang 6:32PM (2/04/2009)
I genuinely hope that the last paragraph was supposed to be drenched in sarcasm.
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ambientFLIER 7:17PM (2/04/2009)
I don't think so. Some people probably WERE looking forward to getting one.
VP 7:17PM (2/04/2009)
Why would the last statement have to be drenched in saracasm? Is there something wrong with purchasing a small/midsize truck from them if they produce a quality product? Currently no automaker that is doing business in the U.S offer a decent compact truck. The only option is the Ford Ranger which is what two decades old?
letstakeawalk 7:38PM (2/04/2009)
Mahindra is a very respected manufacturer of tractors and farm equipment, so they already have a potential customer base, and a distribution and maintenance network. They have two tractor assembly plants in the US.
Plus, they made Jeeps under contract for the US during WWII. That means quite a bit to some people.
adrenalnjunky 9:22PM (2/04/2009)
A lot of hard core off-roaders were looking forward to the Mahindra compact 4x4 truck offering - esp. if it came w/ thier 4cyl diesel.
Not everyone wants a feature-laded oversized vehicle for off-roading.
Flashpoint 7:15PM (2/04/2009)
99% drop in sales is also reffered to as BANKRUPTCY.
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ambientFLIER 7:19PM (2/04/2009)
99% drop in profits, not sales. Also, neither of them have anything to do with bankruptcy.
Conundrum 7:28PM (2/04/2009)
99 percent decline in profit (+245,000) is still better than the huge LOSSES reported by other auto makers.
MunkMan 7:27PM (2/04/2009)
No amount of fluorescent lights can make that thing look good.
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Dan 8:20PM (2/04/2009)
Hmmm... now I know where Chris Bangle went after he left BMW.
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RockStoneSteel 10:29PM (2/04/2009)
I'm not understanding Autoblog's/Tutor's take on this. It's made to sound as if the "whopping 99% drop in profits" is severe compared to GM and Chrysler. However, ANY profit, even at 1%, is still fantastic relative to the huge losses by GM and Chrysler. If anything, the fact that any automotive company is profitable is quite exceptional in these troubled economic times. The headline should more accurately read "Mahindra outstandingly still makes profit in troubled economic times (in spite of poor investments)."
Not to mention that sales dip of 26% is less than half the hit Chrysler sustained. Considering Mahindra made any profit with that sales dip and poor investments is quite a remarkable accomplishment.
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Ravi Nair 9:20PM (2/04/2009)
AAAAARGHH...this f**kin thing hurts my eyes. 1 billion people, surely there are better designers!
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P.V. 9:32PM (2/04/2009)
YEOWCH!
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harlanx6 9:35PM (2/04/2009)
They are not bankrupt! They actually made a profit! Guess who didn't? (And I'll give you enough guesses to get to GM, Ford, and Chrysler).
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A.R. 1:56AM (2/05/2009)
I'm an Indian-American and I'm sorry to say that that thing is just ugly.
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Amien 4:16AM (2/05/2009)
So, it's gonna be a while before they launch the Scorpio in the US.
And i do agree, making a profit, no matter how small in the present conditions is pretty awesome.
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Hotzigetty 6:05PM (5/30/2009)
Im indian and i cant believe people actually bought that.
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