Suzuki Profits Rocket Up, Future Unsure
‘Tis the season when Japanese companies publish annual results. They all work on a fiscal year that runs from April 1 through March 31. Then, they need a good month to count the beans, to be ready in mid May. Suzuki was first to announce, and the announcement was good:
Suzuki, which is in a so far childless alliance with Volkswagen, lifted its net profit 56 percent to 45.17 billion yen ($561 million) from 28.91 billion yen ($359 million) in the year before. Operating profit rose 35 percent to 106.93 billion yen ($1.32 billion). Sales rose 5.6 percent to 2.608 trillion yen ($32.4 billion).
Better sales in India and other Asian markets were cited for the growth, The Nikkei [sub] reports.
At the announcements, guidance is usually given for the prospects in the following year. Suzuki refrained from making earnings projections for this fiscal year, saying that “it is difficult to immediately put together what it considers as a reasonable estimate,” as The Nikkei put it
Other carmakers will announce their annual results this week, and more than one will not make any projections. The industry grapples with the effects of the March 11 tsunami, and will continue to grapple for a while. Frankly, nobody has any idea, except that it will be nasty. The March 11 tsunami only affected 2 weeks of the last fiscal year. Now, they will affect the full year results.
Yesterday, Chubu Electric, the utility that supplies power to Suzuki’s factories, agreed to temporarily shut down reactors at the Hamaoka plant in Shizuoka. Hamaoka is Chubu’s only nuclear plant. It supplied 15 percent of Chubu’s energy. Japan’s Economy Minister Kaoru Yosano said earlier Tuesday that the decision by Chubu Electric to suspend the Hamaoka nuclear power plant could cause further electricity supply problems this summer.
Toyota will announce results tomorrow, Wednesday. TTAC will be there. Nissan will report on Thursday.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Does that include the motorcycle business or just autos? If yes, they must be done paying Ricky Carmichael his bonuses!
The US and Europe are certainly not the market areas Suzuki is focused on. Although they sell the Swift in Europe they really don't push it. Might be a wise decision to concentrate on their main markets. I would not expect Suzuki to sell more Swifts in the US than FIAT currently does it with the 500.