india: India a bright spot for Suzuki despite global slowdown

India remains a bright spot for Japan’s Suzuki Motor Corp (SMC) with subsidiary Maruti Suzuki expected to grow in strong double digits in the ongoing financial year, even as sales in most of Asia and Europe are on a downslide amid global macroeconomic uncertainties.

Suzuki Motor has cut its global targets for production by 94,000 vehicles and sales by 18,000 units for the fiscal year ending March 31. It, however, expects sales volume in the Indian market to grow 21% because of strong consumer demand, especially for the newly launched Brezza and Grand Vitara SUVs.

In a post-earnings presentation to investors on Tuesday, the automaker said it revised the global forecast “due to the maximised factoring of semiconductor risks and the impact of import restrictions in Pakistan”. It was previously expecting to produce 3.18 million and sell 3.02 million vehicles.

Sales in India grew more than a quarter and accounted for 95% of the increase in the Japanese company’s global sales in the first nine months of the fiscal year compared with a year earlier.

Sales volume in Japan rose 10%, but those in Europe and the rest of Asia shrank by 35% and 4.8%, respectively. With this, India accounted for 55% of Suzuki Motor’s global automobile sales in the period, up from 49% a year earlier.

Growth prospects for the company in India remain promising in the upcoming financial year. Maruti Suzuki managing director Hisashi Takeuchi told ET in a recent interaction that the company was expecting to outperform rivals in the Indian market next fiscal year on the back of new product launches in the fast-growing SUV segment.”Unlike the forecast for the industry, for us we still have a good chance of growth. That is because of several reasons. One is certainly because of the introduction of new products in the SUV segment. We now have a strong weapon to fight and will be able to get to the number one position in the (SUV) category in FY24,” Takeuchi said.

Maruti Suzuki unveiled two new SUVs – Fronx and Jimny – at the India Auto Expo in January. Both products are scheduled to go on sale by the start of the new fiscal year.

The company had pending orders for 363,000 vehicles at the end of the third quarter in December. About a third of the bookings are for the Brezza and Grand Vitara, launched earlier this fiscal year.

Buoyant consumer demand, especially for midsized passenger vehicles, is expected to spur sales close to the 4-million mark in India this fiscal. Maruti Suzuki is expected to close the year with sales at levels similar to those of FY19, when it sold 1.75 million units. The company has not given up on achieving annual sales of 2 million units but said a lot would depend on the availability of semiconductors this quarter.