Suzuki Motor raises annual profit outlook
On robust India, Europe sales
Japan’s Suzuki Motor Corp. raised its annual operating profit forecast on Friday in a surprise move, as quarterly results beat estimates due to strong vehicle sales in India and Europe. The automaker dominates the Indian market through its majority stake in Maruti Suzuki India Ltd and the results come on the heels of a report that it will invest in a second production line at a new plant in the country.
TOKYO — Japan’s Suzuki Motor Corp. raised its annual operating profit forecast on Friday in a surprise move, as quarterly results beat estimates thanks to strong vehicle sales in India and Europe.
The automaker dominates the Indian market, its largest, through its majority stake in Maruti Suzuki India Ltd and the results come on the heels of a report that the Japanese automaker will invest in a second production line at a new plant in the country.
The maker of the Swift subcompact hatchback now sees operating profit climbing 2.4% to ¥200 billion ($1.9 billion) in the year to March.
It had previously forecast a profit decline of 7.8% — an estimate that was in line with analysts’ predictions.
For the second quarter, operating profit climbed 23% to ¥56.3 billion, according to Reuters calculations. That beat an average estimate of ¥38.3 billion from 11 analysts surveyed by Thomson Reuters I/B/E/S/.
Suzuki will invest about ¥100 billion ($970 million) in a second vehicle production line at its new plant in Gujarat, even before operations have begun, the Nikkei business daily reported on Friday.
The second line could debut in early 2019, the report said, and will manufacture the same yearly volume as the first production line which is scheduled to open next year and will have an annual production capacity of 250,000 vehicles.
Maruti last month beat expectations with a 60% surge in second-quarter net profit as demand grew for its compact and utility vehicles.
Suzuki expects vehicle sales to grow 12.2% in Europe and 9% in India this business year. Its previous forecast was for a 7% rise in sales in India, while it kept its forecast unchanged for Europe.