The Big Three may be struggling as new car sales continue to collapse, but the downward trend isn’t a phenomenon solely reserved for the U.S. car makers. Amid plunging sales and the devaluation of the rupee, India’s Mahindra & Mahindra posted a staggering 99 percent decline in third quarter profits.
Mahindra – India’s largest SUV, truck and tractor producer – found itself in the perfect storm during its third quarter, wedged between slacking demand and the further erosion of the rupee. Mahindra’s vehicle sales fell 26 percent during the quarter, with the value of the rupee sliding by another 3.5 percent. The rupee has declined in value by 19 percent during the last 12 months.
Adding to Mahindra’s woes, export sales fell by 54 percent, leaving the automaker extremely vulnerable to the devaluation of the rupee.
In the end, Mahindra’s third quarter profits totaled just 12 million rupees ($245,000), well off from last year’s 4.05 billion rupees. According to Bloomberg, that’s the company’s fourth straight decline.
Mahindra plans to launch its first vehicles in the U.S. later this year, but the company’s worsening financial situation could put that plan on the back burner. Mahindra was also rumored to be on possible suitor for General Motors’ Hummer brand, but those negotiations are undoubtedly off the table at this point.
