Suzuki Motor Corporation expects record sales for the 4th consecutive year and 3rd consecutive year of operating profits in the current financial year, led by a strong outperformance in India.
The small car specialist forecasts the Indian market to grow by 2% in the current financial year but states that Maruti Suzuki will outpace the market.
The largest market for Japan’s fifth biggest carmaker – India accounted for over 61% of total output in the previous financial year (FY-24) and 57% of its total global sales – further increasing its share in global operations by 100-150 basis points.
In its investor presentation, Suzuki Motor Corporation reviewed the previous financial year and noted, “Both net sales and profits were record high. Key factors like the weak yen stabilized raw material prices, and relief from semiconductor shortage helped the operations, whereas increased sales and improved mix helped the financials.”
In its forecast for Japanese FY-24 (Indian FY-25), the presentation added, “Expect record sales and profits due to higher unit sales. Increasing sales volume and improving mix/price, etc., will offset increased investment in R&D and fixed costs.”
Specifically on Indian operations, Suzuki Motor Corporation stated that the company has strengthened its SUV lineup and rapidly expanded its market share.
“We will continue to promote the expansion of our SUV models and aim to recover our total passenger car share,” the company assured investors.
The company informed that Maruti Suzuki’s SUV share had increased from 8.9% to 20.8% at the end of the last financial year, while the overall passenger vehicle market share had decreased to 41.3% in Japanese FY-22. However, that fall has been arrested, and the recovery path has started, with a marginal gain in market share in Japanese FY-23.
Suzuki achieved an accumulated automobile production of 30 million units in India last financial year. Suzuki has achieved accumulated automobile production of 30 million units in India by the end of March 2024.
In April 2024, a new production line with an annual capacity of 100,000 units started operations at the Manesar plant. The company plans to secure a production capacity of approximately 4 million units in India by FY2030.
Sales of automobiles are expected to be 3.25 million units, and the sales of motorcycles are expected to be 1.89 million units, guided by Suzuki Motor.
“The market growth for Indian automobiles is expected to be +2%, and our company’s sales are expected to be higher. This is due to the effects of new models and the impact of the shortage of CNG component supplies in the previous year,” stated the investor presentation.
While the output worldwide is likely to see a downward correction, Asia, led by India, will cater to the increased global demand for Suzuki Motor.
“The company is compiling strategies in various fields, including technology, and will announce the new midterm management plan by the end of FY2024,” hinted the management.
To be sure, the chairman of Maruti Suzuki, R C Bhargava, had said the company would be eying close to double-digit growth in FY-25 (or Japanese FY-24) in his post-earnings call to the media.
Maruti Suzuki has guided its component suppliers to prepare for a production plan of 2.4 million units in the current financial year, with almost 3 lakh units allocated for the overseas market.
While Maruti Suzuki and its alliance partner Toyota have started popularizing hybrids in India, surprisingly, the presentation noted that while the number of HEVs (hybrid electric vehicles) decreased, CNG (compressed natural gas-powered) vehicles have increased.
“Including the future use of biogas, a multi-pathway strategy is being adopted for achieving carbon neutrality,” stated the presentation.
The HEV and CNG vehicles account for 43.0% of Suzuki’s sales in the last financial year. The overall market and Suzuki have reached an all-time high in both retail and wholesale units.
