Japan’s Suzuki Motor Corp said on Monday it escaped a loss in the final quarter thanks to growth in its main Indian market, but forecast an 87 percent drop in profit this year as slumping global demand and a strong yen take their toll.
Suzuki, a maker of compact cars such as the Swift hatchback, has been relatively shielded by its big exposure to India where it controls about half of the car market through local unit Maruti Suzuki India Ltd.
With its best-selling Alto and new models such as the A-Star and Swift DZire, Maruti’s sales rose for the fourth straight month in April in contrast to trends in the United States and Japan, which have pummelled other Japanese carmakers such as Toyota Motor Corp and Honda Motor Co.
Even in Japan, Suzuki is benefiting from a shift in consumer preference towards the 660cc minivehicle segment, which it dominates with Toyota unit Daihatsu Motor Co. Suzuki and Daihatsu overtook Nissan Motor Co to rank second and third in Japan after Toyota in the last financial year.
Suzuki booked a fourth-quarter operating profit of 10.45 billion yen ($106 million), down 68 percent from the previous year but beating a consensus estimate of a 2 billion yen profit in a survey of 17 analysts by Thomson Reuters.
Net profit fell 54 percent to 5.8 billion yen, while revenue declined 27 percent to 670.2 billion yen.
For the year to March 31, 2010, Suzuki expects an operating profit of 10 billion yen, far short of a consensus forecast of a 42 billion yen profit, and a net profit of 5 billion yen. Its typically conservative forecasts are based on an assumption that the dollar and euro will average 90 yen and 115 yen, respectively.
Shares of Suzuki have jumped more than 60 percent in the year to date, far better than a 44 percent rise in Tokyo’s transport subindex.
Before the results were announced, Suzuki shares ended up 2.5 percent at 2,025 yen.