Suzuki Q1 falls 20%, India demand slowdown worrying

Suzuki Motor Corp posted a 20% drop in quarterly operating profit on Wednesday after the March 11 earthquake hampered production, and it stuck to its annual guidance for a small profit rise driven by the Indian market.

Suzuki, like other Japanese automakers, is looking to make up for production lost after the disaster in the second half of the business year, with plans to increase output for the full year.

The bigger worry for the maker of Swift and Alto cars is a slowdown in demand in its largest and most profitable market, India, where competition is also intensifying with global giants such as Toyota Motor Corp and Ford Motor Co entering the small-car segment.

Suzuki's April-June operating profit was 25.57 billion yen (USD 331.5 million), down from 31.95 billion yen a year earlier and nearly double the consensus estimate of 13.8 billion yen in a survey of seven analysts by Thomson Reuters I/B/E/S.

First-quarter net profit rose 24% to 18.73 billion yen.

Suzuki kept its full-year operating profit forecast at 110 billion yen, up 2.9 percent from last year, and net forecast at 50 billion yen. A poll of 19 analysts by Thomson Reuters I/B/E/S put the annual operating profit at 105.7 billion yen.

Shares in Suzuki are down about 10% in the year to date, faring worse than a 6.5% fall in Tokyo's transport sector subindex .

(USD 1 = 77.145 Japanese Yen)