Suzuki Motor has booked a fourth fiscal quarter operating profit down 68% year on year to JPY10.45bn (US$106m) but nonetheless beat analysts’ estimates.
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A survey of 17 analysts by Thomson Reuters had resulted in a consensus estimate of only JPY2bn in profit.
Though growth in its main Indian market kept the small and minicar specialist in the black in the final quarter, it forecast an 87% drop in profit this fiscal year, citing slumping global demand and a stronger yen, Reuters reported.
Suzuki is benefiting from the popularity at home in Japan of 660cc minivehicles – a segment it dominates with Toyota unit Daihatsu. That helped Suzuki and Daihatsu overtake Nissan Motor as the second and third-ranked brands in Japan after Toyota in the last financial year, the news agency noted.
Suzuki’s Q4 net profit fell 54% to JPY5.8bn, while revenue declined 27% to JPY670.2bn. Global car sales fell 8.3% to 611,000 units in the quarter.
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By GlobalDataFull fiscal year net profit plunged 65.8% year on year to JPY27.43bn, due to slower sales, especially in overseas markets, as well as the yen’s appreciation and rises in prices of materials and research and development costs. Operating profit fell 48.5% to JPY76.93bn on a 14.2% drop in sales to JPY3 trillion, the automaker said.
The four-wheel vehicle division posted an operating profit of JPY69.05bn, down 39.4%, on sales of JPY2.52 trillion, down 10.9%.
Suzuki said it would pay a full-year dividend of JPY16 yen per share for fiscal 2008, unchanged from the previous year and including a midterm dividend of JPY8.
It expects an operating profit of JPY10bn, far short of a consensus forecast of a JPY42bn profit, and a net profit of JPY5bn on sales of JPY2.3 trillion, down 23.5%, this fiscal year ending 31 March, 2010.
It is assuming the dollar and euro will average JPY90 and JPY115, respectively, and chief executive Osamu Suzuki told Reuters the projections were set as a “minimum line”.
Suzuki expects its global car sales to fall just 5% this financial year to 2.19m.
“We’re working on hybrids with GM, and I realise this doesn’t look good,” Suzuki said at a news conference. That doesn’t mean we’re going to switch partners just like that. It’s a complicated issue, but we’re going to do everything we can to come up with a viable solution,” he said.
According to Reuters, Suzuki said there was no discussion about discontinuing the more than 10 joint projects it has with GM – formerly its top shareholder – which is up against a 1 June deadline to present a viable restructuring plan to the US government or face bankruptcy.
Successful Indian unit Maruti Suzuki also faces a threat from the imminent arrival of Tata Motors‘ much-hyped Nano which attracted over 200,000 paid advance orders during the initial ‘booking’ period from 9-25 April.
“I can’t say there won’t be any impact (on our sales) but I don’t know what the car is going to be like so it’s wait and see for now,” Suzuki told Reuters.
“We’ll have to think of a counter-measure, but I have doubts about a strategy of selling a car purely on price,” he added.
