Suzuki Motor Corp’s Q2 sales down 3.6% despite Maruti’s strong performance

Suzuki Motor Corporation, which announced its financial results for the second quarter (April 2016-September 2016), has said that consolidated net sales decreased by ¥56.5 billion (-3.6%) to ¥1,499.0 billion compared to the corresponding period of the previous fiscal year.

Domestic net sales in Japan decreased by ¥3.4 billion (-0.7%) to ¥496.6 billion year-on-year mainly due to a decrease in mini vehicle and OEM sales, despite an increase in the sales of compact cars like the Solio, Escudo, Ignis and the made-in-India Baleno.  

Overseas net sales decreased by ¥53.1 billion (-5.0%) to ¥1,002.4 billion year-on-year, which is attributed to a decrease in automobile sales in Indonesia and Pakistan, and the impact of the exchange rate. This is despite an increase in automobile sales in markets like India (Maruti Suzuki posted 12.13% year on year growth with sales of 705,287 vehicles) and Europe.

In terms of consolidated income, SMC’s operating income grew by ¥14.4 billion (+14.3%) to ¥115.5 billion year-on-year thanks to passenger vehicle sales in India and Europe. Ordinary income increased by ¥9.7 billion (+8.7%) to ¥121.8 billion year-on-year. The net income attributable to owners of the parent increased by ¥20.8 billion (26.4%) to ¥99.9 billion year-on-year partly owing to an increase in gain on sales of investment securities, in addition to increase in the ordinary income.

In the motorcycle business, net sales decreased by ¥26.7 billion (-21.7%) to ¥96.6 billion year-on-year due to a decrease in sales in Europe, North America and Asia, and the impact of the exchange rate. The operating loss of ¥1.2 billion in the previous fiscal year became an operating loss of ¥0.7 billion.

With respect to operating income defined by geographical areas, Japan decreased by ¥3.8 billion (-8.7%) to ¥39.5 billion year-on-year but Asia increased by ¥4.8 billion (8.7%) to ¥59.8 billion year-on-year, mainly due to the sharp increase in sales in India (+12.13%). Europe also increased by ¥4.8 billion (201.9%) to ¥7.2 billion mainly owing to the great sales of the Vitara compact SUV.

Maruti's robust performance and growth in Europe sees SMC revise FY2017 forecast 

Looking at Maruti Suzuki India's stolid performance in the first half of fiscal 2016-17, and improved sales in its key European market, SMC has revised its growth forecast. The carmaker foresees operating profit rising 2.4% to 200 billion yen (Rs 10,400 crore) in 2016-17.

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