Suzuki Motor nine-month operating profit dipped 5.1% to JPY87.7bn on sales down 6.7% to JPY1.8 trillion due to a volume fall in India, ongoing effects of the Japanese earthquake, and yen appreciation, the automaker announced.
“The group was able to limit the fall in operating income… as a result of taking various measures such as cost reduction and decrease of expenses,” it said in a statement.
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Net income fell 4.7% to JPY40.6bn year-on-year. Although it booked JPY17.5bn for disaster recovery, this was offset by a gain on sale of investment securities of JPY9.2bn from sales of company stock related to General Motors and other items.
The March Japan earthquake reduced home market automobile volume while revenue from other markets such as Asia, Europe, and North America also fell due to yen appreciation and a sales decrease at Maruti Suzuki which was hit by a lengthy strike in 2011 and general economic conditions discouraging new vehicle purchases.
Auto sales fell 7.8% to JPY1.6 trillion and operating income was off 9.1% to JPY85.8bn.
Like rival carmaker Honda, Suzuki is also a major motorcycle maker and reduced sales in Europe were offset by a 1.3% rise in North America volume but this segment made an operating loss of JPY2.8bn due to the impact of floods in Thailand and yen appreciation.
Nonethless, North America returned to profitability – from an operating loss JPY2.5bn a year ago to operating income of JPY0.3bn in the first nine months of 2011/12.
Suzuki had targeted increased sales and income for the full year, to offset the lingering effects of the earthquake that occurred in the last quarter of fiscal 2010/11, but now says yen appreciation and the floods in Thailand late in 2011 have led to some downward revision.
It expects net sales down 4.1% year on year to JPY2.5 trillion, operating income up 2.9% to JPY110bn and net income up 10.7% to JPY50bn.
Third quarter operating profit dipped 2.8% to JPY23.0bn (US$300m), roughly in line with the average JPY23.8bn yen estimate from five analysts polled by Thomson Reuters I/B/E/S.
Net profit dropped 29% to JPY8.61bn, according to the news agency’s calculations based on the nine-month results.
The Thai floods last October slowed production in Indonesia by about 37,000 motorcycles and in Hungary by about 13,000 cars, executive vice president Toshihiro Suzuki told Reuters.
Analysts told the news agency Suzuki should benefit from a shift towards monetary easing in India, its biggest market, where many consumers avoided buying cars last year due to rising interest rates.
Maruti’s sales in India grew in January for the first time in eight months.
