Tokyo: Suzuki Motor on Monday revised upward its operating profit forecast for this year at 40 billion yen (USD 444.22 million), a four-fold increase from a previous target, buoyed by booming sales in India.
The revision comes despite the firm witnessing 63.4 per
cent decline in bottomline in the first half of this fiscal to
12.5 billion yen (USD 138.83 million) from 34.23 billion yen
(USD 380.11 million) in the year-ago period due to weak sales.
Suzuki Motor Corp (SMC), which owns a majority stake in
India's largest carmaker Maruti Suzuki India (MSI), had
earlier forecast operating profit at 10 billion yen (USD
111.05 million).
The small car major said its operating profit in Asia
increased in the first six months of this fiscal due to strong
performance by the Indian subsidiary.
SMC said its sales in Asia during the period stood at 363.1
billion yen (USD 4.03 billion), against 416.3 billion yen (USD
4.62 billion), down 12.78 per cent on account of yen
appreciation.
"...but Maruti Suzuki India posted higher sales than
those for the consolidated cumulative second quarter of the
previous fiscal due to good sales of the new models, including
A-Star and Ritz," it said.
As a result, operating income in Asia increased to 25.4
billion yen (USD 281.90 million) from 20.67 billion yen (USD
229.40) in the year-ago period, it added.
SMC's sales during the period stood at 1,181.55 billion
yen (USD 13.12 billion), against 1719.85 billion yen (USD
19.10 billion) down 31.3 per cent.
SMC Chairman and President Osamu Suzuki said the revised
annual forecast still remained conservative, adding the global
economic recovery remained precarious with emerging signs of
deflation.
"How the yen appreciates and how we maintain (sales) as
each country's government incentives run out will be key,"
Suzuki said.
"We realised the towel was still soaking wet," Suzuki
said in reference to the company's internal cost-cutting
steps. "We take this slump in sales as a good opportunity to
thoroughly cut costs."
The company, however, kept its sales forecast unchanged
at 2.3 trillion yen (USD 25.51 billion), which is down 23.5
per cent from a year earlier, the report said.
Suzuki said it witnessed brisk demand for new models in
India and in some European countries like Germany and Britain
due to government stimulus measures, but demand continued to
be sluggish elsewhere in Japan and North America.
In the quarter ended September MSI reported a nearly two
-fold jump in its net profit at Rs 570 crore (USD 121.05
million) for the second quarter of FY'10. The company had a
net profit of Rs 296.12 crore (USD 63.06 million) in the same
period a year ago.
Bureau Report