Tokyo: Suzuki Motor Corp and Mazda Motor Corp, Japan’s fourth- and fifth-biggest car makers, hiked their annual profit forecasts on Friday as they enjoyed higher demand in some markets and cut costs.
Suzuki and Mazda, like other automakers globally, have been slashing fixed costs and boosting production efficiencies to cope with the global economic slowdown, while getting a boost from government incentives on purchases of fuel-efficient cars.
Suzuki, owned 19.9% by Germany’s Volkswagen AG following a deal struck in December, has profited from strong sales in India’s fast-growing market, where it is the top player through subsidiary Maruti Suzuki.
Suzuki raised its operating profit outlook for the full year to March to ¥50 billion ($558.2 million) from ¥40 billion, though that falls short of the consensus of ¥66 billion from 14 analysts surveyed by Thomson Reuters.
“We have a very cautious outlook for the January-March quarter because of concerns on the yen rate and an unclear economic outlook,” a Suzuki spokesman said. “The heavy reliance on India’s car market is a risk.”
Suzuki, known for its Swift and Alto hatchback cars, reported a ¥17.99 billion ($201 million) operating profit for October-December, compared with a ¥5.78 billion profit a year earlier and roughly in line with market expectations.
Maruti Suzuki said last month that its third-quarter net profit had more than tripled on improved sales. Suzuki holds 54.2% in Maruti and counts India as its single biggest market.
Mazda slashes costs
Mazda reported an operating profit of ¥11.1 billion for the October-December quarter, a large swing from its ¥24.2 billion loss a year earlier. Sales surged nearly 9% to ¥557.5 billion.
The maker of the Mazda3 compact car lifted its full-year operating forecast to a profit of ¥5 billion from a loss of ¥12 billion, against the consensus from 11 analysts for a profit of ¥1 billion.
Mazda said sales were strong in markets such as China, Australia and Israel, and that it got a boost from a softer-than-expected yen against the British pound and Australian dollar.
Mazda has also been cutting costs by becoming more efficient at procuring raw materials, and slashing bonuses and labour costs by holding down overtime hours, a spokesman said.
Prior to the results, Suzuki’s shares closed down 2.1% at ¥2,031 and Mazda fell 4.9% to ¥233, both underperforming a 1.3% fall in Tokyo’s transport equipment subindex.
In the past 3 months Suzuki’s shares have fallen 5%, Mazda is up 10% and the sector index has been virtually flat.