Suzuki Motor Corp optimistic India will outperform despite slowing global sales in FY2024
Japanese automaker's record net sales and operating profits in FY2023 supported by strong performance from Maruti Suzuki India, which saw its revenue and profit contribution jump to 40% of Suzuki Motor Corp’s global financials.
Suzuki Motor Corporation (SMC) expects India to continue to outpace the global markets in FY2023 – which is fiscal year 2023-24 (in India) – and help offset the slowdown in some of its key geographies around the world.
Announcing its FY2023 earnings in Japan on Monday, the small car specialist has issued a guidance for global sales to grow by 6.2% to 3.186 million units. Its growth forecast for India says, "The market growth is expected to be 5-7% and our company's Indian auto sales are expected to be higher."
Suzuki Motor Corporation's global sales stood at 3 million units in FY2023. Of the incremental sales of 186,000 units it expects globally, almost 99% of its incremental volumes is expected to come from India.
While the company was non-committal on specific market growth or volume projection on India, Autocar Professional learns that its Indian arm – Maruti Suzuki India – has already guided its vendors that the company plans to grow its domestic sales by 15% to about 1.86 million units, which is about 186,000 units over last year's annual sales of 1.7 million units in the domestic market.
"The global sales will increase by 1.86 lakh units because of the increase in sales of Grand Vitara supplied by TKM," Suzuki Motor Corporation stated in its presentation to investors in Japan.
India: the jewel in Suzuki Motor Corp’s crown
India has been significantly outpacing global markets and, in the process, it also overtook Japan as the world’s third largest car market in 2022. India has been Suzuki Motor Corp’s biggest market for years now. In FY2023, Maruti Suzuki India with production of 18,78,801 cars and UVs, accounted for 60% of SMC’s global output and 55% (16,06,870 units in the domestic market and 255,439 units exports) of its global sales in FY2023.
In terms of revenues, Maruti Suzuki's revenue contribution increased to 40% as against 35% last year and in terms of profits, the India market now accounts for 40% of profits earned by SMC last fiscal year.'
Suzuki Motor has guided for an increase in net sales to 4900 billion yen, up 5.6% year on year and its third consecutive year of growth. However, operating profit is estimated to fall by 5.9% to 330 billion yen on account of higher capex and adverse forex rates, and profit margin is to expected to drop 14% to 190 billion yen, a decrease for the first time in four years.
Maruti Suzuki aims to grow by 15-16% in FY24, eyes output of 2.28 million
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