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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]