Suzuki posted its highest quarterly profits in two years

Article by Christian A., on August 29, 2010

As sales soar in Asia, Suzuki Motor Corp. posted its highest quarterly profits in two years exceeding market expectations. However, the carmaker is sticking with its cautious guidance due to a softer euro and stiffer competition in India.

The reasons cited on why Suzuki was able to get past the financial crisis better than most are a product lineup that includes many cheaper, small cars such as the Swift hatchback and its dominance in the fast-growing Indian market.

Volkswagen took a 19.9% stake in Suzuki earlier this year. Suzuki's India unit, Maruti Suzuki India, which sells about half of India's new cars, is expected to be up against fiercer competition over the next year from Nissan Motor, Toyota Motor and other major brands that want a bigger piece of the market with low-cost cars that are suited to local tastes.

In a news conference, Senior Managing Officer Toshihiro Suzuki, son of Chairman Osamu Suzuki, said that in India, there will be a tougher race that's predicted to continue. To stay ahead, Suzuki will pour more investments so that its sales and distribution network in India will improve. Analysts will also be viewing at how well car sales in India will hold up in the near term.

Last week, the central bank increased interest rates higher than expected, to fight double-digit inflation a move that is expected to affect demand.

A Reuters poll reveals that economists anticipate a more aggressive tightening for the rest of the fiscal year. Five analysts surveyed by Reuters estimated that Suzuki posted an operating profit of average 24.5 billion yen.

Topics: suzuki, profit

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