Startup losses keep most foreign carmakers in the red
After posting a loss of R140 crore in FY12, Ford India’s accumulated losses are now among the highest at R1,344 crore, according to data with the registrar of companies (RoC). The US-based car maker also had to report to the Board for Industrial and Financial Reconstruction after its losses eroded over 50% of its net worth at the end of FY11.
Honda Cars’ FY12 losses almost trebled to R604 crore as lack of diesel models and a production slowdown due to component shortage hit sales. However, neither Honda nor Ford is very new to the Indian market — both started passenger car operations in 1995 but entered the high-volume small car market quite late.
Though German auto major Volkswagen posted a R332-crore profit in FY12, accumulated losses till date stand at R662 crore. Both Renault and Skoda saw losses widen in FY12 to R231 crore and R33 crore, respectively. In fact, Renault’s accumulated losses stood at approximately R361 crore as of March 31, 2012.
“Management believes the losses incurred by the company are primarily startup in nature and have been incurred in connection with the redesigning of the company’s business strategy and towards establishing the Renault brand
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