Tokyo: Suzuki Motor Corp. on Wednesday said currency market volatility after Britain voted to exit the European Union (EU) would likely have a “major" impact on earnings, and that it would offset the impact by cutting costs and local procurement.
Suzuki, which sells nearly half of its vehicles in India through Maruti Suzuki Ltd, said volatility in India’s rupee and the euro would have a negative impact on the Japanese auto maker.
Suzuki’s overseas production facilities include plants in India and EU member state Hungary.
The yen surged after Britain’s vote, and analysts expect the strengthening currency to pull down operating profit at Japan’s auto makers when they convert proceeds made overseas into yen. Many of the auto makers also export vehicles from Japan.
Suzuki already expects to take a ¥62 billion ($605.59 million) hit for the current year due to foreign exchange, contributing to a 7.8% slide in annual operating profit compared with a year earlier.
Speaking at Suzuki’s annual shareholders meeting, one executive said cost cuts and an increased effort at overseas plants to procure parts locally would be means of making up for any further currency impact. Reuters