Suzuki and Mazda have improved their annual profit forecasts bolstered by increasing demand in India and China as well as cost cuts.
The two companies have been trimming fixed costs and boosting production efficiencies to cope with the global economic slowdown while benefiting from government incentives on purchases of fuel-efficient cars.
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Suzuki, which is now owned 19.9% by Volkswagen following a deal struck in December, has profited from strong sales in India’s fast-growing market, where it is the top player through subsidiary Maruti Suzuki.
The company raised its operating profit outlook for the full year to 31 March to JPY50bn (US$558.2m) from JPY40bn.
A spokesman said: “We have a very cautious outlook for the January-March quarter because of concerns on the yen rate and an unclear economic outlook. The heavy reliance on India’s car market is a risk.”
Suzuki reported a JPY17.99bn ($201m) operating profit for October-December, compared with a JPY5.78bn profit a year earlier, roughly in line with market expectations.
Maruti Suzuki said last month that its third quarter net profit had more than tripled on improved sales. Suzuki holds 54.2% in Maruti and India is its single biggest market.
Mazda reported an operating profit of JPY11.1bn for the October-December quarter, against a JPY24.2bn loss a year earlier. Sales rose nearly 9% to JPY557.5bn.
It lifted its full-year operating forecast to a profit of JPY5bn from a loss of JPY12bn following stronger-than-expected sales in China which has emerged as its single-biggest market since November, with its sales there rising nearly 70% from a year earlier to 57,000 units in the October-December quarter.
The company plans to sell 220,000 cars in China this calendar year.
Mazda said sales were also strong in markets such as Australia and Israel, and that it got a boost from a softer-than-expected yen against the Australian and Canadian dollars.
Mazda has also been cutting costs by becoming more efficient at procuring raw materials, and slashing bonuses and labour costs by holding down overtime hours.
However, president Takashi Yamanouchi said he expected the global market environment to remain tough over the next financial year adding: “We will further improve our cost structure as we don’t expect a large increase in unit sales.”
