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SUZUKI: PROMOTIONAL ENIGMA

Bouncing back from the pandemic dip with increased sales volume, turnover and profitability in its full fiscal year to March 2022, Suzuki Motor Corporation’s motorcycle business then shocked industry commentators by celebrating this achievement in a bizarrely negative fashion. BDN financial editor Roger Willis reports.

Global 12-monthly revenue from powered two-wheelers soared by 22.8% to £1.603bn, a tally which was also 4.5% higher than the division’s pre-Covid 2019/2020 annual turnover. 

Associated operating profit followed a far more muscular curve, 319.2% up from disease-riddled 2020/2021 to £68.8m and an extraordinary 457.1% improvement versus utterly lamentable performance in 2019/2020.

Worldwide sales volume climbed by 6.5% year-on-year to 1.634 million machines, although it still lagged behind 2019/2020 numbers by 4.4%. Production volume of 1.784 million bikes was 19.2% ahead of 2020/2021 and 3.2% better than 2019/2020.

Asia dominated sales growth, 8.1% up to 1.324 million. Within that, India rose by 9.5% to 610,000 and China added 7.9% to 403,000. The Philippines put on 17.9% and Pakistan recovered dramatically by 75.3% to 35,000. Smaller Asian markets taken together suffered a 16.5% decline to 115,000.

The developed world was considerably less enthralling. While Japan boasted a 4.6% recovery to 53,000, Europe sank by 27.1% to 28,000 and North America was 37.7% down to 29,000.

Suzuki qualified these figures by saying wholesale shipments had been affected by “production adjustments” due to component shortages such as semiconductors, as well as logistics disruption owing to lack of containers. Nevertheless, it is forecasting total sales volume growth of 9.3% to 1.787 million bikes in the new fiscal year, including 34.6% European recovery to 38,000.  

As for the aforementioned bizarre celebration, the company paralleled its results revelation with the following announcement: 

“Suzuki Motor Corporation is in discussions with Dorna regarding the possibility of ending its participation in MotoGP at the end of 2022. Unfortunately, the current economical situation, and the need to concentrate its effort on the big changes that the automotive world is facing, are forcing Suzuki to shift costs and human resources to develop new technologies.”

In other words, it’s strapped for cash. We don’t have to look very far for the reasons. On the motorcycling front, apparently magnificent profitability surges still represent pathetic operating margins compared to turnover. Suzuki’s much larger automotive business is in a worse state, with profits now falling steadily for the past three years.

Yen-sterling currency translation at forex rates applicable on 13 May.       

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