Suzuki Motor Q1 profit falls
Suzuki Motor Corp reported a 17 percent fall in quarterly profit as
rising raw materials costs erased its gains from higher sales, and it
kept its forecasts without the help of more favourable currency rates.
April-June operating profit at Suzuki was 33.80 billion yen ($313.1
million), compared with an average estimate of 36.0 billion yen in a
Reuters poll of eight brokerages. First-quarter net profit rose 6.9
percent to 26.03 billion yen on revenue of 910.4 billion yen, up 1.8
For the business year to the end of next March, Suzuki kept its
forecast for an operating profit of 140 billion yen and net profit of 80
billion yen, down 6.3 percent and 0.3 percent from last year. It kept
its currency assumptions unchanged for the year, setting a more cautious
95 yen to the dollar and 150 yen to the euro for the second half of the
Consensus forecasts from 17 brokerages call for an operating profit
of 146.9 billion yen and net profit of 83 billion yen. Last week,
Suzuki's majority-owned Indian unit, Maruti Suzuki India Ltd reported a
7 percent fall in first-quarter profit also hit by high input costs.
Suzuki, a maker of compact cars and SUVs, has been moving upmarket
with higher-margin cars such as the Swift and SX-4 models, while also
increasing sales of cars built for General Motors Corp's Opel and Fiat
The robust sales have brought production at its plant in Hungary
rocketing to a pace of 300,000 units a year, a rise of 30 percent so far
this year. Still, shares of Suzuki have been battered in the past month
on worries about the possibility of a prolonged inflation-driven sales
slowdown in India, its biggest market.
The stock is down 29 percent in the year to date, faring worse than
Tokyo's transport sub-index, which dropped 19 percent.
Car manufacturing plant
Renault invites Bajaj auto for India venture
Renault has invited India's Bajaj Auto Ltd to join a $1 billion
manufacturing alliance with partner Nissan Motor Co , the Economic Times
Renault and Nissan, which are developing a $2,500 car with motorbike
maker Bajaj, are also negotiating with the Indian firm to extend their
venture to distribute the Renault and Nissan vehicles that will be made
in Chennai, the paper said.
Bajaj Auto?s managing director, Rajiv Bajaj declined comment, the
A spokesman for Renault in India was not immediately available for
Renault, which makes the no-frills Logan sedan in a venture with
utility vehicle Mahindra & Mahindra Ltd, had previously agreed to
distribute the Renault/Nissan vehicles through the venture with Mahindra.
Mahindra earlier this year pulled out of the manufacturing alliance
with Renault and Nissan in Chennai, which will start production in 2010
and will have a annual capacity for 400,000 vehicles in seven years.
Hyundai i20 manufacturing in India only
Hyundai Motors India Limited plans to manufacture its new model i20
solely in India. The company has already shifted its manufacturing bases
to India for its small cars and has made India as its manufacturing and
exports hub for small cars. It also plans to double its exports target
in coming times.
The new i20 shall be revealed in September at the Paris Motor Show
2008. The company has no plans to phase out its popular model Hyundai
Getz in near future.
Hyundai is world's fifth largest car manufacturer and second largest
Indian customers can expect the new model in India by the end of the
current calendar year. The new I20 would be powered by the latest Kappa
engine from Hyundai which has recently been installed in the new version
"With the launch of these models, the contribution from Indian
operation to overall global sale of Hyundai will increase to 15 per cent
in a couple of years from the current 12 per cent," said, Managing
Director, Hyundai Motors India Limited, HS Lheem.
He also stated that the new engine is exclusively being manufactured
in India and the new i20 powered by this engine would compete
effectively with similar cars in the small car segment.