Maruti and Suzuki 2W India sales boost parent Suzuki Motor Corp’s FY2018 revenues

by Mayank Dhingra 15 May 2018

Suzuki Motor Corporation, the No 4 automaker by volumes in its home turf Japan, has reported its annual results for the fiscal ended March 2018 and it looks like the company is well placed to drive growth in the future.

While the Group’s consolidated net sales increased by 587.7 billion Yen (Rs 35,618 crore), increasing by a notable 18.5 percent to 3,757.2 billion Yen (Rs 227,709 crore), its consolidated income rose by 107.5 billion Yen (Rs 6,515 crore), growing by a significant 40.3 percent to 374.2 billion Yen (Rs 22,670 crore), primarily due to improvement in profits in Asia, Japan and Europe.

Apart from its strong performance in the domestic market, where it sold over 3 million units in the calendar 2017, the growth was also spearheaded by increase in vehicle sales in global markets, where its Indian subsidiary in the passenger vehicle space, Maruti Suzuki India, posted strong growth in the last fiscal.

Maruti Suzuki India, the country’s No 1 carmaker, registered cumulative sales of 1,643,497 units in the fiscal, growing a considerable 13.84 percent in the domestic market and holding a substantial 50 percent of the domestic PV market. While majority of its offerings from its vast model line-up performed well, it was the newly launched third-generation Swift and Dzire hatchback and compact-sedan siblings, which led the company’s growth from the front.

Where the Dzire, launched in May 2017 went on to sell 196,990 units until March 2018 in less than a year of its launch, the Swift hatchback, which was introduced only towards the fag-end of FY2018 in February 2018, sold 36,498 units within barely two months, posing a strong growth path ahead for the company.

Suzuki Motorcycle India firing on all cylinders
On the two-wheeler front, Suzuki’s Indian arm – Suzuki Motorcycle India sold 501,203 units in FY2018, posting a handsome growth of 42.99 percent, mainly coming on the back of strong demand for its automatic scooter offerings – the Suzuki Access, Swish and Lets.

The trio collectively garnered volumes of 421,539 units (FY2017: 280,783), constituting over 84 percent of the company’s overall sales across scooters and motorcycles, and growing at a noticeable 50.12 percent in the fiscal.

However, with slow growth of the motorcycle segment, and with low volumes (FY2018: 79,664) especially not being able to sustain fierce competition from segment bigwigs of the likes of homegrown Hero MotoCorp (FY2018: 6,499,051) and Japanese competitor Honda Motorcycle and Scooter India (FY2018: 1,953,745), Suzuki Motorcycle India, in 2017 had changed its course and taken a resolve to focus only on the premium motorcycle space in the country, and the company, will now be seen playing only in the above 150cc motorcycle segment in India, including bringing in some of the high-end performance motorcycles from Suzuki’s global portfolio, like the recently introduced GSX-S750.

With regard to Suzuki’s overall operating results by geographic locations, Asia, Japan, Europe, and other regions all saw an increase in sales as well as in income in FY2018. The company now projects continuous increase in automobile sales, especially in India in FY2019, where the PV and scooter segments are pegged to grow at good single-digit and double-digit rates respectively, due to a growing economy and good consumer sentiments. Moreover, with gradual appreciation in the value of the Yen, along with enhanced capex planned towards intensive R&D activities, the Group expects an increase in sales, albeit, with a decrease in income in the ongoing fiscal – FY2019.

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