Suzuki sees big growth in India

Japan's Suzuki Motor has been able to offset some of the sales plunge in developed markets with big growth in India, where it is the top-selling brand through unit Maruti Suzuki India.

Suzuki posted an 80 per cent drop in quarterly operating profit hit by a stronger yen and declining sales, and it kept its annual forecasts amid an uncertain outlook for global vehicle demand.

Suzuki's global car sales fell 12 per cent to 541,000 units in the first quarter, but sales in India grew about 10 per cent to 197,000 units. That helped it outsell France's Renault SA in the first half of 2009 to rank number nine global auto sales.

Last month, Maruti Suzuki, in which Suzuki owns 54.2 per cent, unexpectedly reported a rise in April-June net profit driven by brisk export demand for the new A-Star hatchback, higher selling prices and lower raw materials costs.

Suzuki, Japan's fourth-biggest automaker and known for its penny-pinching expertise, made an operating profit of ¥6.86 billion (Dh266million/$72.4m) in the April-June quarter, down from a profit of ¥33.8bn a year earlier.

The result was better than a consensus estimate for a ¥2.9bn profit in a survey of six analysts by Thomson Reuters, as cost cuts added ¥52.3bn to profit, equivalent to three-quarters of its annual goal for cost-saving contribution.

Suzuki earned a net ¥2.14bn in the first quarter, down 92 per cent from ¥26.0bn a year earlier. Revenue fell 37 per cent to ¥577.1bn as car sales declined 12.4 per cent to 541,000 vehicles. "[The first-quarter result was] better than anticipated," said a Suzuki spokesman.

But he added: "There are many uncertainties facing the industry. The sales environment is tough in Europe and the US, and our sales recovery is lagging in Japan. We need to wait and see before we revise projections."

Bigger Japanese rivals Honda Motor and Nissan Motor surprised markets last week with unexpected first-quarter profits.

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