TOKYO Japan's Suzuki Motor said on Friday that it did not see demand for vehicles slowing at home or in its key market of India amid growing concerns about a global economic downturn.
Even though inflation and higher interest rates are fuelling uncertainty about the world economy, the view of Masahiko Nagao, Suzuki's senior managing executive, echoes the bullish outlook of other Japanese automakers.
As of June, Suzuki had an order backlog of about 200,000 vehicles in Japan, according to Nagao, adding a more up-to-date backlog figure for India, where the company has the largest 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 that the company would see an operating profit as long as it could keep producing the accumulated orders.
Suzuki's sales in India rose 27.9 per cent year-on-year to 380,000 vehicles in April-June quarter, after retailers curbed operations due to COVID 19 restrictions the year earlier.
As a chips shortage hampered production, vehicle sales in Japan fell by 6.4 per cent.
Suzuki kept its operating profit forecast of 195 billion yen $1.46 billion for the year to March 31, saying it was premature to change it at this point.
The surge in global commodity prices due to supply chain disruptions caused by the Pandemic and the Ukraine war has challenged businesses and policymakers worldwide, with central banks rushing to tighten monetary policy and firms cutting costs.
Nagao said that Suzuki can't predict when it's going to be fixed, although the semiconductor shortage is gradually improving.
He said that the firm has switched to producing cars that don't need so many chips in India to sell them to African as well as Central and South American markets in order to lessen the impact.