Suzuki Motors sees plunging profits
Posted: 05 February 2009 2000 hrs
Suzuki's logo
TOKYO : Suzuki Motor Corp. reported a sharp drop in earnings Thursday and warned of tough times ahead as the global economic crisis wreaks havoc in Japan's car industry.
The mini-car specialist logged a 68 percent drop in net profit in the nine months to December to 21.63 billion yen (242 million dollars).
Operating profit fell 43 percent to 66.48 billion yen while revenue slid 9.5 percent to 2.33 trillion yen, hit by sluggish demand and a strong yen.
For the full financial year to March, Suzuki lowered its forecast for net profit to 22 billion yen from an earlier projection of 60 billion yen.
The bleak outlook underscores the rapidly worsening fortunes of carmakers like Suzuki, which last year made a record profit of 80.25 billion yen.
"I expect the economic downturn would bottom out sometime between April and June," said chairman and chief executive Osamu Suzuki, who took the additional post of president last year due to the car industry crisis.
"But we are in a situation where even after that, the economy would continue to stay stagnant instead of picking up," he told reporters. "I have to face the reality that the possibility is high."
The carmaker cut its operating profit target for the year to 67 billion yen from 100 billion yen and its revenue prediction to three trillion yen from 3.2 trillion.
Suzuki said the company, which has announced layoffs of 850 temporary workers since October, will end contracts with another 110 workers while cutting work days both for plant labourers and office workers.
The chairman also said he would cut his own pay by 30 percent in February and March.
Until recently Suzuki had been relatively resilient to the global economic slowdown, helped by its strong presence in India, one of the world's fastest growing car markets.
"When larger automakers expanded business in the United States and Europe, Suzuki focused more on people's cars in India and Hungary," the chairman said. "It turned out to be a good thing."
Car manufacturers around the world have been devastated by the crisis with world number one Toyota Motor Corp. on course for its first-ever operating loss.
Posted: 05 February 2009 2000 hrs
Suzuki's logo
TOKYO : Suzuki Motor Corp. reported a sharp drop in earnings Thursday and warned of tough times ahead as the global economic crisis wreaks havoc in Japan's car industry.
The mini-car specialist logged a 68 percent drop in net profit in the nine months to December to 21.63 billion yen (242 million dollars).
Operating profit fell 43 percent to 66.48 billion yen while revenue slid 9.5 percent to 2.33 trillion yen, hit by sluggish demand and a strong yen.
For the full financial year to March, Suzuki lowered its forecast for net profit to 22 billion yen from an earlier projection of 60 billion yen.
The bleak outlook underscores the rapidly worsening fortunes of carmakers like Suzuki, which last year made a record profit of 80.25 billion yen.
"I expect the economic downturn would bottom out sometime between April and June," said chairman and chief executive Osamu Suzuki, who took the additional post of president last year due to the car industry crisis.
"But we are in a situation where even after that, the economy would continue to stay stagnant instead of picking up," he told reporters. "I have to face the reality that the possibility is high."
The carmaker cut its operating profit target for the year to 67 billion yen from 100 billion yen and its revenue prediction to three trillion yen from 3.2 trillion.
Suzuki said the company, which has announced layoffs of 850 temporary workers since October, will end contracts with another 110 workers while cutting work days both for plant labourers and office workers.
The chairman also said he would cut his own pay by 30 percent in February and March.
Until recently Suzuki had been relatively resilient to the global economic slowdown, helped by its strong presence in India, one of the world's fastest growing car markets.
"When larger automakers expanded business in the United States and Europe, Suzuki focused more on people's cars in India and Hungary," the chairman said. "It turned out to be a good thing."
Car manufacturers around the world have been devastated by the crisis with world number one Toyota Motor Corp. on course for its first-ever operating loss.
