Suzuki gains on decision to exit China

bank can’t be ruled out, according to Marcus Wong, a strategist at CIMB Bank Bhd’s treasury department in Singapore.

“The spike in two-year yields this week has been led by a sell-off from onshore asset managers, which points toward an increasingly bearish onshore sentiment,” he said.

“With the next BI meeting only scheduled for end-September, an off-cycle surprise meeting and hike would go some way in stemming this rout.” — Bloomberg TOKYO: Shares of Suzuki Motor Corp advanced after the Japanese carmaker said it’s exiting China, abandoning a market where it struggled to gain traction and allowing it focus on its stronghold India.

The departure highlights the cut-throat nature of the Chinese market, where quick changes in customer tastes can leave carmakers exposed.

Suzuki’s lineup of mainly smaller cars became less competitive after consumers in the world’s biggest auto market shifted purchases to larger sedans and sport utility vehicles amid rising incomes.

While an admission of defeat, the move paves the way for a sharpened focus on India, a market Suzuki dominates and where it aims to roughly triple sales to five million vehicles annually by 2030. The exit also allows Suzuki to avoid spending on development of new vehicles to meet China’s tightening environmental regulations.

“We see strategic merit in Suzuki’s accelerated moves to narrow its business focus to core areas,” Goldman Sachs analysts led by Kota Yuzawa said in the note, reiterating their “buy” rating on the stock. — Bloomberg