Maruti Suzuki India, the country's largest carmaker by sales, is facing some logistical challenges as a result of traffic disruption in the Red Sea, a company executive said on January 31.
"Dispatch times may change, and there may be some uncertainty in vessels arriving and picking up their consignments," Rahul Bharti, Maruti's investor relations chief, said on a post-earnings analyst call.
Yemen's Houthi militants' attacks on merchant ships in the Red Sea, as well as retaliatory US strikes, have heightened Middle Eastern tensions, forcing companies to reroute shipments due to delays and higher rates.
"There may be some cost increase because of risk or rerouting of vessels," Bharti said. He did not specify by how much costs are expected to increase but said the rise "should not be significant."
The 'Swift' hatchback manufacturer raised prices across models earlier this month in an effort to pass on higher commodity costs to customers. Tata Motors, once India's most valuable automaker, surpassed Maruti this week to claim the title.
Maruti's 33% increase in third-quarter profit after tax to 31.3 billion rupees ($377 million) exceeded analysts' average estimate of 29.25 billion rupees, according to LSEG data, boosted by strong demand for its sport utility vehicles (SUVs).
The share of pricier and margin-boosting utility vehicles, primarily SUVs, in total domestic passenger vehicle sales increased to nearly 39% in the December quarter, up from about 24% the previous year.