Suzuki, Japan’s fourth largest carmaker and a dominant player in the minicar sector, saw its operating profits fall by 14% in the July-September quarter.
This is the company’s first backward step in two years and is blamed on fierce competition in sales of Japan’s minicars as tax hikes for the vehicles with engines of 660cc or less provoked a price war.
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“I can’t help but say that the outlook for minivehicles is very bleak,” chief executive Osamu Suzuki told a news conference.
Operating profit fell to JPY39.6bn (US$346.55m) in the second quarter. Reuters reported that analysts had estimated an operating profit of JPY47.1bn.
Suzuki is forecasting a full year operating profit of JPY188bn. Indian subsidiary Maruti Suzuki, which maintains a domestic market share of around 50%, last week reported a 29% rise in quarterly net profit.
