Suzuki quadruples annual forecast on soaring India sales

Both carmakers’ huge presence in India,where the economy’s resilience and tax incentives have jumpstarted demand for cars,has helped them weather the storm better than most in the industry.

Suzuki,Japan’s fourth-biggest automaker,raised its operating profit outlook to 40 billion yen ($445 million) for the year to March,from an initial forecast of 10 billion yen. It now expects a net profit of 15 billion yen instead of 5 billion yen. Consensus forecasts from 16 brokerages put Suzuki’s operating profit for the year at 46.6 billion yen,and net profit at 22.8 billion yen. Earlier,Daihatsu Motor Co,the minivehicle unit of Toyota Motor Corp,and Fuji Heavy Industries Ltd,the maker of Subaru cars,also lifted their full-year forecasts after better-than-anticipated six-month results.

But Suzuki joined other automakers in warning of an uncertain outlook at best for global vehicle demand as more state-backed incentives programmes reach their budget limit and threaten to yank back sales.

“It’s doubtful whether these scrappage incentives would switch smoothly into real demand,” Suzuki Chief Executive Osamu Suzuki told a news conference.

Suzuki said he was not optimistic about a global economic recovery in the October-March second half,although Asian markets such as India and China remained a bright spot. He noted that Suzuki’s higher profit forecasts were merely a result of the overshoot in the first six months.

For July-September,Suzuki,known for its Swift and Alto hatchback cars,reported a 7.1 per cent fall in operating profit to 24.98 billion yen from the second quarter last year,as global sales volumes decreased and the yen strengthened against the dollar.