Suzuki Motor sees rapid expansion in 2005
Reuters / January 21, 2005
TOKYO -- Top Japanese minivehicle maker Suzuki Motor Corp. said on Friday it expected to produce a record 2.164 million cars this year, up 9 percent from 2004 as it prepares to roll out the strategic Swift model worldwide.
Suzuki, owned one-fifth by General Motors and Japan's fourth-biggest automaker by stock value, has forecast record earnings for the year to March 31 on booming demand in Asia and Europe for its small cars.
Under a three-year business plan ending this term, Suzuki had targeted revenues of 2 trillion yen ($19.35 billion) but exceeded that milestone last year. It has forecast sales of 2.2 trillion yen for this year -- a projection that its chief executive officer indicated was conservative.
"We expect revenues of 2.2 trillion yen at the very least this year," Chairman and CEO Osamu Suzuki told a news conference.
He said the next goal would be 3 trillion yen, but stopped short of providing a time frame. He cited limits as to how much capital the company could procure for further investments overseas, and uncertainty over currency rates and the economies of developing countries, where Suzuki expects the fastest growth.
Suzuki, also the world's third-biggest motorcycle maker, is due to announce a new medium-term plan in May.
This calendar year, it expects to boost global car sales by 12 percent to 2.09 million vehicles, and forecast a 31 percent jump in motorbike sales to 3.65 million units fueled largely by a 42 percent surge in Indonesia.
In one of its boldest product offensives, Suzuki Motor is aiming to sell 250,000 units of the new Swift small car worldwide, building the car in Japan, Hungary, China and India. Production in the latter two countries is due to begin in March.
Hit by a shortage of high-quality steel, Suzuki Motor last month reduced its domestic output plans by 6 percent to 500,000 cars for October to March, but said that would still be some 10 percent higher than the year-earlier period.
"During October to March, we had initially planned a 3 percent rise in output, and had ordered steel from our suppliers accordingly," CEO Suzuki said. "But actual demand was 17 percent higher year-on-year, and that led to the output cut."
This year, Suzuki Motor expects domestic car production to fall 2 percent to 1.025 million units, while overseas output is expected to climb 21 percent to 1.139 million units.
Last year, global car output rose 11 percent to a record 1,986,749 units. Sales grew 12 percent to 1.87 million cars as it nudged up its pie of the domestic minivehicle market to 31.4 percent to retain the top spot for the 32nd straight year.
Second-ranked Daihatsu Motor Co. said this week it aimed for a share of at least 30 percent. Minivehicles are a segment unique to Japan, with engine displacements of just 660cc.
Suzuki Motor will also begin selling on Friday the 2.0-liter Chevy Optra car built by GM-Daewoo Auto and Technology, in which it holds 14.9 percent. It would be the first time for Suzuki to import GM-Daewoo's product for sale in Japan.
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