Suzuki Motor Corp (TYO: 7269) have given shareholders a worrying update this morning after reporting that quarterly profit slipped by almost a third, amid crashing demand in India.
As a result, the Japanese car maker slashed its full year sales outlook after the report was published, showing a gloomy future for Suzuki Indian operations.
The result does not come at the best of times for the Japanese manufacturer, as it was reported that rivals Peugeot (EPA: UG) and Fiat (NYSE: FCAU) had finalized their merger move to form a new automobile titan.
However, Suzuki have not been the only car manufacturer to cut their annual guidance. Renault (EPA:RNO) also experienced falling demand and as a result cut their annual guidance last month.
“We no longer think that growth in India will be an uninterrupted move upwards,” President Toshihiro Suzuki told an earnings briefing.
“We anticipate hills and valleys, so we need to focus on recovering from the current valley we’re in to ensure sustainable growth.”
Operating profit for Suzuki tumbled 32% to £398.6 million in the July-September quarter from the same period a year earlier.
Additionally, the Japanese titan saw domestic production fall due to the need to attend to a mileage scandal.
Suzuki, which accounts for roughly half of India’s passenger vehicles through its majority stake in Maruti Suzuki India Ltd (NSE: MARUTI) sold just 305,000 vehicles in India in the quarter, down 32% and its lowest quarterly sales since the December 2014.
Globally, Suzuki posted quarterly sales of 670,000 vehicles, seeing a 20% fall from the year prior.
Seniority have forecasted total global sales totaling 2.85 million units, down 15% from an earlier forecast.
Suzuki and Toyota Motor Corp (NYSE: TM) announced in August they would take stakes in each other.
This was an attempt to try and leverage their combined scale to manage costs and boost development of new vehicle technologies.
Shares of Suzuki jumped 1.44% despite the slowdown in sales, trading at 5,347 JPY. 5/11/19 13:06BST.