Suzuki 2007 Annual Report Download - page 24

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SUZUKI MOTOR CORPORATION
1. Operating results
Consolidated net sales for the Suzuki Group during the current fiscal year amounted to 3,163,669 million yen (115.2%
as against PFY). This year became the first fiscal year resulting in sales over 3,000 billion yen. Operating income
amounted to 132,900 million yen (116.7% as against PFY). Net income amounted to 75,008 million yen (113.7% as
against PFY). These results were due to increases in depreciation, R&D expenses and other expenses, etc. being
absorbed by increase of sales, cost reduction and exchange gain, etc.
Factors which significantly influenced the consolidated statement of income are described as follows:
Note: PFY = Previous Fiscal Year
(1) The operating results by business segmentation
(a) Motorcycle operations
In the situation where the domestic demand is decreasing, Suzuki total domestic sales decreased due to
reducing of OEM supply. However sales of Suzuki models itself increased thanks to good performance of the new
“Address V50”, the “Skywave250”, the “GSR400”, etc.
Despite sales shrink in Asia, typically drop in Indonesia, our total sales in overseas increased owing to
expansion of new large models such as the “GSX-R600/750”, the “GSR600” and the “Boulevard M109R”. As a
result, the net sales of motorcycle operation reached 588,177 million yen (104.8 % as against PFY), however,
operating income decreased to 45,377 million yen (98.8% as against PFY) because reduction in profits of "P.T.
Indomobile Suzuki International” could not be absorbed.
(b) Automobile operations
In domestic market, in addition to favorable sales of the subcompact passenger car “Swift”, the Company
strengthened product lineup introducing a new sports crossover vehicle, the “SX4”, mini vehicles, the “MR Wagon
Wit”, the “Wagon R Stingray” and the new “Cervo”. As a result, the domestic net sales increased over the
previous fiscal year. Overseas sales increased greatly over the previous fiscal year as well by introducing a new
middle size crossover SUV, the “XL7” in North America, and steady sales of world strategic vehicle “Swift”, the
“Grand Vitara” (export model of the “Escudo”) and the “SX4”. As a result, the net sales of automobile operation
reached 2,503,817 million yen (118.1 % as against PFY), and operating income increased to 76,576 million yen
(132.2% as against PFY) through absorption of increase of depreciation and other expenses by increase of sales,
cost reduction and exchange gain.
(c) Other businesses
The net sales of other businesses amounted to 71,674 million yen (109.9% as against PFY) and operating
income amounted to 10,946 million yen (109.4% as against PFY) because of net sales increase, etc.
(2) The operating results of geographical segmentation
(a) Japan
Net sales amounted to 2,085,514 million yen (114.7% as against PFY) and operating income increased to
69,683 million yen (114.7% as against PFY) through absorption of increase of depreciation, R&D expenses and
other expenses by increase of sales, cost reduction and exchange gain.
(b) Europe
Net sales increased to 661,007 million yen (134.3% as against PFY) by the introduction of the “SX4” in addition
to favorable sales of the “Swift”, the “Grand Vitara” and new large motorcycle models such as the “GSX-R600/
750” and the “GSR600”. And also operating income increased greatly to 14,803 million yen (190.6% as against
PFY) due to sales increase, etc.
(c) North America
Net sales amounted to 459,277 million yen (116.9% as against PFY) by the introduction of the “SX4” and the
“XL7”, in addition to favorable sales of the “Grand Vitara” and new big motorcycle models such as the “GSX-
R600/750” and the “Boulevard M109R”. However, operating income decreased to 5,914 million yen (81.9% as
against PFY) due to expenses increase, etc.
(d) Asia
Net sales amounted to 656,043 million yen (108.1% as against PFY) through absorption of sales decrease of
“P.T. Indomobil Suzuki International” in Indonesia by sales increase of “Maruti Udyog Limited” in India and “Pak
Suzuki Motor Company Limited” in Pakistan. However, operating income decreased to 43,606 million yen (96.1%
as against PFY) because reduction in profits of “P.T. Indomobil Suzuki International” could not be covered up, due
to increase of depreciation cost, etc.
(e) Other areas
Net sales amounted to 61,554 million yen (145.8% as against PFY) and operating income to 5,061 million yen
(201.0% as against PFY) by increased sales, etc.
FINANCIAL REVIEW
24