TOKYO (Reuters) - Two of Japan’s smaller automakers reported huge gains in quarterly profit on Monday citing strong sales in Asia, at a time when their bigger peers are struggling for growth in the United States, a key market for Japanese cars.
Suzuki Motor Corp (7269.T) and Mitsubishi Motors Corp (7211.T), Japan’s fourth- and seventh-largest automakers, have limited presence in the U.S. where competition has seen peers Toyota Motor Corp (7203.T), Nissan Motor Co Ltd (7201.T) and Honda Motor Co Ltd (7267.T) resort to costly buying incentives.
But their vehicles resonate well in Asia, with Suzuki’s cars and motorcycles continuing to dominate in India while Mitsubishi’s latest model has won over drivers in Indonesia.
Suzuki, on track for record annual earnings, booked a 68 percent on-year jump in October-December operating profit, saying growth also came from Japan and Europe.
At Mitsubishi, Asian sales and a weaker yen helped profit more than double from a year earlier, when sales dropped following the automaker’s admission that it had overstated the mileage of some models.
Mitsubishi also said it now expects a 19-fold jump in profit to 95 billion yen ($865.13 million) for the full-year - a year in which its latest model, the seven-seat Xpander launched in Indonesia last year, has so far helped sales jump 25 percent in the Association of Southeast Asian Nations (ASEAN).
Sales also rose 51 percent in China, a market where Mitsubishi sees sales more than doubling under its mid-term plan through 2019.
“Some markets are unstable, but we believe that the ASEAN market is stable,” Chief Finance Officer Koji Ikeya said at a briefing. “We want to use new vehicle models to lift sales further in the region.”
Mitsubishi also raised its full-year dividend forecast to 17 yen per share from 14 yen.
Suzuki, which makes the Baleno compact hatchback and the Vitara Brezza compact sport utility vehicle, reported ongoing strong sales in Asia, particularly in India where it dominates the market through a majority stake in Maruti Suzuki India Ltd (MRTI.NS), the country’s largest automaker.
Boosted by strong sales in Asia, Suzuki and Mitsubishi are more upbeat about profit prospects than those more reliant on the slowing U.S. market. North America accounts for around 16 percent of Mitsubishi’s sales, whereas Suzuki no longer sells vehicles in the United States, the world’s second-largest auto market. That compares with 30 to 40 percent of sales at Toyota, Nissan and Honda.
Last week, Honda raised its full-year operating profit forecast, but the upgrade still represents a 7.8 percent slide from a year prior. While the automaker is seeing explosive growth in China, it has been saddled by stagnant sales in the United States.
Toyota, which reports earnings on Tuesday, has said it expects annual profit to be largely flat compared with a year earlier, whereas Nissan - which owns 34 percent of Mitsubishi - has forecast a 13 percent decline.
($1 = 109.8100 yen)
Reporting by Naomi TajitsuEditing by Christopher Cushing