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SUZUKI MOTOR CORPORATION

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Suzuki braces for bumpy road ahead after second-quarter profit tumbles on India market woes

11/05/2019 | 05:02am EDT
FILE PHOTO: Cars are seen parked at Maruti Suzuki's plant at Manesar

TOKYO (Reuters) - Suzuki Motor Corp said quarterly profit plunged by almost a third on slumping car demand in India, its biggest market, and Japanese automaker slashed its full-year vehicle sales outlook.

After decades of robust growth, India's auto sector has been in a tailspin, hit hard by a liquidity crunch at the country's shadow banks that has squeezed financing for car sales as well as by higher taxes and a weak rural economy.

"We no longer think that growth in India will be an uninterrupted move upwards," President Toshihiro Suzuki told an earnings briefing.

"We anticipate hills and valleys, so we need to focus on recovering from the current valley we're in to ensure sustainable growth."

Operating profit for Japan's fourth-largest automaker tumbled 32% to 55.9 billion yen (£398.6 million) in the July-September quarter from the same period a year earlier. A drop in domestic output due to the need to improve its inspection processes after a mileage scandal also hurt.

That was its weakest level in nearly three years but it exceeded an average forecast for 44.9 billion yen from nine analysts according to Refinitiv data.

Suzuki, which accounts for roughly half of India's passenger vehicles through its majority stake in Maruti Suzuki India Ltd, sold just 305,000 vehicles in India in the quarter, down 32% and its lowest quarterly sales since the December 2014 quarter.

It now expects its India vehicles sales to slide by a fifth this business year. That compares with its previous forecast of a 4% rise.

Suzuki last month cut its estimate for full-year operating profit by 40% to 200 billion yen, a four-year low and a long way off its record high of 374.2 billion yen hit in the business year ended in March 2018.

F
or a link to an interactive graphic on Suzuki's operating profit, click onhttps://tmsnrt.rs/2LSSGXB

Globally, Suzuki posted quarterly sales of 670,000 vehicles, down around 20% from a year ago. It currently expects annual global sales of 2.85 million units, down 15% from an earlier forecast.

Suzuki and Toyota Motor Corp announced in August they would take small equity stakes in each other as they try to leverage their combined scale to manage costs and boost development of new vehicle technologies.

(Reporting by Naomi Tajitsu; Editing by Muralikumar Anantharaman and Edwina Gibbs)

By Naomi Tajitsu


© Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
MARUTI SUZUKI INDIA LTD 2.51% 7694.35 Delayed Quote.-2.00%
SUZUKI CO.,LTD. 3.26% 886 End-of-day quote.-24.60%
SUZUKI MOTOR CORPORATION 2.22% 5149 End-of-day quote.7.67%
TOYOTA MOTOR CORPORATION 0.40% 1993.5 End-of-day quote.25.27%
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Analyst Recommendations on SUZUKI MOTOR CORPORATION
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Financials
Sales 2022 3 519 B 30 753 M 30 753 M
Net income 2022 169 B 1 481 M 1 481 M
Net cash 2022 487 B 4 258 M 4 258 M
P/E ratio 2022 14,8x
Yield 2022 1,90%
Capitalization 2 500 B 21 902 M 21 854 M
EV / Sales 2022 0,57x
EV / Sales 2023 0,50x
Nbr of Employees 68 739
Free-Float 84,4%
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Technical analysis trends SUZUKI MOTOR CORPORATION
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 16
Last Close Price 5 149,00 JPY
Average target price 5 583,33 JPY
Spread / Average Target 8,44%
EPS Revisions
Managers and Directors
Toshihiro Suzuki President & Representative Director
Osamu Honda Representative Director & Technical Supervisor
Toshiaki Hasuike Director, VP, Head-Production & Technology
Kinji Saito Director & Senior Managing Executive Officer
Takanori Suzuki Director & Senior Managing Executive Officer
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