Gaijin Motor News – Japanese automaker Suzuki said on Aug. 5 that it has seen no signs of slowing demand in both its home market in Japan and its main market in India amid growing concerns about a global recession, according to foreign media reports.
Although inflation and rising interest rates are fuelling uncertainty in the global economy, Suzuki Motor senior managing executive Masahiko Nagao believes that market demand has not been affected, a view in line with other Japanese car companies.
Nagao said Suzuki Mobil Indonesia had a backlog of about 200,000 vehicles in Japan at the end of June, and the latest order backlog in India, where the company has the highest share of the car market, was about 350,000 units.
Speaking on the company’s earnings call, Nagao said, “While we are concerned about global economic trends, the order book is very flat and demand is not declining at the moment.” He added that the company could earn an operating profit as long as it could continue production and keep delivering orders.
Suzuki’s sales in India rose by 27.9 per cent year-on-year to 380,000 units between April and June this year. During the same period last year, the company’s sales were severely affected by the restrictions of the epidemic. However, the company’s sales in Japan fell by 6.4 per cent year-on-year between April and June this year due to a chip shortage that affected production.
Suzuki maintained its annual operating profit forecast for the fiscal year ending March 31 next year, which it expects to be 195 billion yen (about US$1.46 billion), saying it was too early to change the forecast.
Soaring global commodity prices amid supply chain disruptions caused by the epidemic and the escalating situation in Russia and Ukraine have challenged companies and policy makers around the world, with central banks tightening monetary policy and companies cutting costs.
Nagao said that while the shortage of semiconductors is gradually easing, Suzuki cannot predict when the problem will be completely resolved. To mitigate the impact, he said, the company has started producing models in India with lower demand for chips and selling them to Africa, Central America and South America.