Suzuki Motor of Japan said on Friday that it does not expect vehicle demand to decline in Japan or its main market of India, despite mounting concerns about a worldwide economic slump.
Suzuki’s senior managing executive officer, Masahiko Nagao, shares the bullish attitude of other Japanese manufacturers, despite rising inflation and interest rates fueling concerns about the global economy.
Suzuki had an order backlog of about 200,000 vehicles in Japan as of the end of June, according to Nagao, who added that the company’s most recent backlog statistic for India, where it has the greatest share of the four-wheel market, was about 350,000.
“Although we are concerned about global economic trends, orders are coming in very smoothly and demand is not declining at this point,” he said on an earnings call, adding the company would see an operating profit as long as it could keep producing the accumulated orders.
Suzuki’s sales in India increased 27.9 per cent year on year to 380,000 automobiles in the April-June quarter, after retailers reduced operations due to COVID-19 limitations the previous year.
Vehicle sales in Japan, on the other hand, slumped 6.4 percent as a chip shortage slowed output.
Suzuki maintained its operational profit prediction of 195 billion yen ($1.46 billion) for the fiscal year ending March 31, saying it was too early to revise it.
A rise in global commodity prices, along with supply chain disruptions caused by the epidemic and the Ukraine war, has presented a challenge to businesses and policymakers around the world, with central banks scrambling to tighten monetary policy and firms lowering costs.
Despite the fact that the semiconductor scarcity is steadily improving, Suzuki cannot say when it will be resolved, according to Nagao.
To mitigate the damage, the company has resorted to building cars that don’t require as many chips in India and selling them in African, Central, and South American markets, he added.
Earlier this week, rival Subaru Corp said it expects robust demand from US car purchasers to continue, while Toyota Motor Corp maintained its full-year global production target of 9.7 million units.
(Adapted from USNews.com)