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Suzuki posts 46% drop in first-quarter profit on slowing India demand

TOKYO — Suzuki on Monday reported a 46.2% fall in first-quarter operating profit, hurt by lower output at home as it improves its inspection systems, and falling demand in India, its biggest market. Japan's fourth-largest automaker posted an operating profit of 62.7 billion yen (GBP487 million) for the April-June quarter, down from 116.5 billion yen a year earlier and below a mean forecast of 69.09 billion from eight analysts, according to Refinitiv. Suzuki reaffirmed its forecast for full-year operating profit to come in at 330 billion yen, up 1.7% from the year ended March 2019. Suzuki, known for its Swift and Baleno compact models, is bracing for subdued growth this year in India, where roughly one in two cars sold carries its brand. The company stuck to a forecast for vehicle sales to increase slightly on the year, but conceded that it may need to trim its forecasts in the coming months as slowing economic growth and stricter emissions standards could dent sales. Slowing profit growth could hamper its ability to invest in and develop lower-emissions vehicles and on-demand transportation services necessary to survive the technological upheaval currently underway in the global auto industry. The automaker has long acknowledged that it cannot shoulder the costs of developing electric vehicles and self-driving cars on its own, and has turned to Toyota to supply Suzuki vehicles with its gasoline hybrid systems.

Japan could consolidate to three automakers by 2020

Sergio Marchionne might see his dream of big mergers in the auto industry become a reality, and an analyst thinks Japan is a likely place for consolidation to happen. Takaki Nakanishi from Jefferies Group LLC tells Bloomberg the country's car market could combine to just three or fewer major players by 2020, from seven today. "To have one or two carmakers in a country is not only natural, but also helpful to their competitiveness," Nakanishi told Bloomberg. "Japan has just too many and the resources have been too spread out. It's a natural trend to consolidate and reduce some of the wasted resources." Nakanishi's argument echoes Marchionne's reasons to push for a merger between FCA and General Motors. Automakers spend billions on research and development, but their competitors also invest money to create the same solutions. Consolidating could conceivably put that R&D money into new avenues. "In today's global marketplace, it is increasingly difficult for automakers to compete in lower volume segments like sports cars, hydrogen fuel cells, or electrified vehicles on their own," Ed Kim, vice president of Industry Analysis at AutoPacific, told Autoblog. Even without mergers, these are the areas where Japanese automakers already have partners for development. Kim cited examples like Toyota and Subaru's work on the BRZ and FR-S and its collaboration with BMW on a forthcoming sports car. Honda and GM have also reportedly deepened their cooperation on green car tech. After Toyota's recent buyout of previous partner Daihatsu, Nakanishi agrees with rumors that the automotive giant could next pursue Suzuki. He sees them like a courting couple. "For Suzuki, it's like they're just starting to exchange diaries and have yet to hold hands. When Toyota's starts to hold 5 percent of Suzuki's shares, this will be like finally touching fingertips," Nakanishi told Bloomberg. "I absolutely do believe that we are not finished seeing consolidation in Japan," Kim told Autoblog. Rising development costs to meet tougher emissions regulations make it hard for minor players in the market to remain competitive. "The smaller automakers like Suzuki, Mazda, and Mitsubishi are challenged to make it on their own in the global marketplace. Consolidation for them may be inevitable." Related Video:

2014 Suzuki V-Strom 1000 ABS

Motorcycle trends come and go like fashion, and the latest two-wheeled style du jour is the adventure bike. Chunky and rugged, these (sometimes) dirt-ready rides often take cues from the massive, Armageddon-ready rigs you'd find on the Dakar Rally. In their most neutered form, they can start as street bikes and adapt for adventure duty by adding taller suspension setups, removable saddlebags, bigger fuel tanks, and better wind protection.
Lying smack in the middle of that dirt/road matrix (and leaning toward the tarmac side) is the 2014 Suzuki V-Strom 1000 ABS. A venerable fixture in the adventure scene, it developed a primarily urban following after the model bowed in 2004, though it's also proved itself worthy of tackling trails and light offroad scenarios. For automotive folks not steeped in the vagaries of the motorcycle world, the V-Strom is the two-wheeled equivalent of the late, great Mitsubishi Montero: capable, no-nonsense, and a bit of an unsung hero in the face of more glamorous offroaders like the Land Rover LR4 and the Mercedes-Benz Geländewagen.