Suzuki says southeast Asia demand to make up for slump in China
Losses already booked on terminated U.S. auto business
Photo credit: Bloomberg
TOKYO (Bloomberg) -- Suzuki Motor Corp., the carmaker pulling out of the U.S. auto market, projected an increase in sales this fiscal year as stronger demand from southeast Asian countries offsets a slump in China.
"Demand in Thailand and Indonesia is outperforming our expectations," Osamu Suzuki, president of the carmaker, said at a briefing in Tokyo today. Global sales will probably expand 7.2 percent to 2.74 million units in the year ending March 31, the automaker said.
Suzuki also said he expects global demand to continue to shift toward smaller models, a trend the carmaker is following.
The company on Nov. 5 announced its U.S. distribution affiliate would reorganize and file for Chapter 11 bankruptcy protection from creditors.
Net income increased 31 percent from a year earlier to 41.9 billion yen ($528 million) in the six months ended Sept. 30, Suzuki said today in a statement. The result beat the 40.8 billion yen average of six analysts' estimates compiled by Bloomberg.
The company maintained its full-year profit forecast for net income of 70 billion yen.
Suzuki will exit the U.S. car market after almost three decades, the company said Nov. 6. The automaker, whose U.S. business began in 1985, will continue offering motorcycles, all-terrain vehicles and boat motors in the country, it said.
American Suzuki Motor Corp., Suzuki's U.S. distribution unit, filed for bankruptcy protection this month in Santa Ana, Calif., as part of the reorganization.
Suzuki has already booked 12.8 billion yen ($161 million), the amount of its investment in American Suzuki, as an impairment loss, Ei Mochizuki, a spokesman at the carmaker, said this week. It has also allocated 9.7 billion yen for bad debts from the U.S. unit for the first half of this year, he said.
The unit had $346 million of debt and $233 million in assets as of Sept. 30, according to bankruptcy filings.
Maruti Suzuki India Ltd., the carmaker's Indian unit, halted production for a month after a riot in July led to one death and dozens of injuries at its plant in Manesar, about 50 kilometers (31 miles) southwest of New Delhi.
"Production is already back at normal levels," Toshihiro Suzuki, executive vice president, said. "As of the end of October, daily production was at 1,700 units," he said.Contact Automotive News