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By Naomi Tajitsu
TOKYO (Reuters) – Suzuki Motor Corp saw Monday its operating profit almost disappeared in the first quarter due to falling demand for cars in India, its largest market that has one of the world’s subsequent coronavirus infection rates.
Japan’s 4th automaker recorded an operating profit of 1.3 billion yen ($12.29 million), its worst quarterly functionality recorded. Still, it surpassed consensus forecasts for a loss of 38 billion yen from six analysts surveyed through Refinitiv.
Suzuki reported an ordinary loss of 15.4 billion yen in the quarter due to virus-connected plant closures. He secured 400 billion yen in financing his lenders to help him through the pandemic, the company said.
The company refused to offer year-round profit and dividend forecasts, creating uncertainty about the effect of coronavirus in the coming months.
“In India, infections continue to increase especially during the day,” Executive Chairman Masahiko Nagao said in a briefing after the announcement.
“It’s hard to see how the viral scenario will spread in India. We want to monitor this carefully.”
Global automakers are affected by the coronavirus outbreak, which has closed vehicle factories and prevented car dealership consumers from falling, leading to declining sales and production.
Sedan manufacturer Swift suffered a 64% drop in global vehicle sales in April-June to 263,000 units, driven by a 82% drop in India, which suffers from coronavirus after taking steps to reopen its economy.
Sales in Japan, Europe and Indonesia were also heavily affected, erasing profits from the company’s operations.
India accounts for just over a share of Suzuki’s global car sales and, thanks to its majority stake in Maruti Suzuki India Ltd, the company accounts for approximately one in two cars sold there.
(Report through Naomi Tajitsu; edited through Christian Schmollinger and Gerry Doyle)