Suzuki Motor Corporation reported net sales in its motorcycle segment dropped 10.9 percent to ¥123.5 billion in the first half of its fiscal year, which ended Sept. 30.
The following are excerpts from Suzuki Motor Corporation’s Q2 report:
Management results for FY2014 first six months
As for the management environment of the Group for this first six months, although influence by tapering of monetary easing in the US, unpredictable economic outlook for emerging countries, and geopolitical risk in some regions, overseas economy is showing a moderate recovery trend. Particularly in India, improvement of consumer sentiment is showing because of their expectation for reformation by the newly-elected government. Japanese economy also continues to be on recovery trend. On the other hand, the impact of recoil reduction from the hike in the rate of consumption tax continues.
Under these circumstances, the consolidated net sales of the second quarter (April 2014 to September 2014) increased by ¥60.5 billion (4.4%) to ¥1,430.7 billion compared to the corresponding period of the previous fiscal year. The Japanese domestic net sales increased by ¥16.4 billion (3.3%) to ¥520.7 billion year-on-year owing to the increase in the OEM sales. The overseas net sales increased by ¥44.1 billion (5.1%) to ¥910.0 billion year-on-year owing to the increase in Europe and Asia.
In terms of the consolidated income, the operating income was at the same level as the corresponding period of the previous fiscal year at ¥90.5 billion. Although it decreased in countries such as Japan, Indonesia, and Thailand, the increase in the income owing to the exchange rate contributed to the result. The ordinary income increased by ¥4.8 billion (5.2%) to ¥97.2 billion year-on-year. The net income increased by ¥2.2 billion (4.4%) to ¥53.9 billion year-on-year.
The operating results by segmentation
Motorcycle — The net sales decreased by ¥15.1 billion (10.9%) to ¥123.5 billion year-on-year mainly owing to the decrease in the sales in Asia. The operating loss of ¥1.0 billion in the corresponding period of the previous fiscal year became an operating loss of ¥0.2 billion.
Automobile — Although the Company made efforts to resolve the back-orders of models such as the Hustler from the end of the previous fiscal year and expanded its sales and strengthened the products such as by setting variants of the WagonR equipped with Suzuki’s unique fuel-efficient technology S-ENE CHARGE, partly owing to the impact of the recoil reduction from the hike in the rate of the consumption tax in Japan, the Japanese domestic net sales of Suzuki brand vehicles decreased year-on-year. However, owing to the increase in the OEM sales, the overall Japanese domestic net sales increased year-on-year. The overseas net sales increased year-on-year owing to the increase in India and Europe. Consequently, the net sales of the automobile business increased by ¥72.7 billion (6.0%) to ¥1,276.2 billion year-on-year. The operating income decreased by ¥1.3 billion (1.5%) to ¥85.8 billion year-on-year owing to the decrease in Indonesia and Thailand.
Marine and Power products, etc. — The net sales increased by ¥2.9 billion (10.4%) to ¥31.0 billion year-on-year mainly owing to the increase in the sales of the outboard motors in Europe and North America. The operating income increased by ¥0.7 billion (17.8%) to ¥4.9 billion year-on-year.
The operating results by geographical areas
Japan — The net sales increased by ¥36.6 billion (4.6%) to ¥828.8 billion year-on-year due to increase of domestic automobile sales, expansion of triangle trade via Japan, and other causes. Although the operating income increased by the exchange rates, it decreased by ¥6.3 billion (9.5%) to ¥60.1 billion year-on-year because of the intensifying competition of domestic automobile sales and other causes.
Europe — The net sales increased by ¥65.7 billion (43.8%) to ¥215.6 billion year-on-year due to sales contribution of C-segment crossover model SX4 S-CROSS which was launched in September 2013, expansion of triangle trade via Japan, and other causes. The operating loss of ¥3.5 billion in the corresponding period of the previous fiscal year became an operating income of ¥0.4 billion, turning into the black.
Asia — The net sales increased by ¥21.0 billion (3.6%) to ¥602.0 billion year-on-year due to increase of sales in India and Pakistan and other causes, though decrease of sales in Indonesia and Thailand. The operating income decreased by ¥7.7 billion (21.8%) to ¥27.3 billion year-on-year due to decrease of income in Indonesia, Thailand and others.
Other areas — The net sales decreased by ¥2.2 billion (2.8%) to ¥76.0 billion year-on-year due to winding down of automobile marketing business in North America and other causes. The operating loss of ¥0.8 billion in the corresponding period of the previous fiscal year became an operating income of ¥2.0 billion due to increase of income in Oceania and North America.