Magyar Suzuki Has Stabilized Its Operations

Magyar Suzuki Plc. stabilized its operations despite declining sales revenue, with the decline attributable to excess production in the base year, company executives said at a press conference in Budapest on Thursday.

Magyar Suzuki Plc. CEO Masato Atsumi, emphasized that despite the difficulties, 2024 was more predictable than previous years, with both production and sales remaining stable.

Based on sales data, Suzuki is once again the market leader in Hungary, with 2024 being the 21st such year since production began in Esztergom. Competition in the automotive industry is becoming increasingly fierce worldwide, and amid difficult conditions, the company sees the solution in favorable price-value ratios, environmentally conscious production, and its product portfolio, he said.

Suzuki wants to offer affordable mobility to as many customers as possible amid the transformation of the automotive industry, and to this end, it considers digitization, production automation, and strengthening competitiveness to be important tasks, the CEO added.

Operations Director Ildikó Gyurján Fejes reported that net sales of EUR 2.25 billion were more than 21% lower than in 2023. Sales from the domestic market increased to EUR 301.8 million from EUR 272.6 million in 2023, exports amounted to EUR 1.9 billion, following almost EUR 2.6 billion in the previous year, while the total value of imported cars, motorcycles and spare parts was EUR 348 million last year.

Last year's pre-tax profit was EUR 3.7 million. Costs have fluctuated in recent years, and pricing has not always been able to keep pace with their rise. In 2024, the combination of rising raw material and spare part prices and market-expected discounts affected results, while energy costs fell by 62% in relative terms compared to the 2022 peak, the Operations Director said.

Deputy CEO Róbert Krisztián stated that Suzuki sold 123,369 cars in 123 countries last year. A total of 116,500 were manufactured in Esztergom, of which 106,940 were exported, with most vehicles still being sold in Europe. The continent's car market is stagnating, yet Suzuki's market share has grown from 1.5% to 1.6%.

The domestic market performed better, with Suzuki increasing its domestic new car sales by 29.3% amid 12.9% growth. Of the 121,607 cars registered domestically, 15,732 were Suzukis. 13.3% of production in Esztergom remained in Hungary, while 16.5% of domestic Suzuki sales were vehicles originating from abroad.

He emphasized that 2024 was the first year in a long time when Suzuki's production was not forced to shut down permanently due to a shortage of parts. He also explained the decline in sales by the previous supply disruptions, which meant that last year's accumulated order backlog had to be fulfilled with surplus production. The decline is therefore temporary, with 2024 production performance in line with previous trends and similar results likely in the medium term.

There is no longer a need for excess production, as salespeople, distributors and dealers have replenished their stocks, and the company serves its customers with short delivery times, extensive geographical coverage and a reliable service network, offering favorable financing options and warranty terms, Róbert Krisztián said, who believes that customers prefer Suzuki vehicles because of their favorable price-performance ratio, inexpensive servicing, and good quality.

However, the vulnerability of supply chains remains a challenge, so flexibility remains an important factor. Suzuki expects the Hungarian vehicle market to expand, but the European market is likely to stagnate this year, he added.

The Japanese Suzuki Group established its Hungarian company in 1991 with a registered capital of HUF 5.5 billion, and the company has remained the Japanese parent company's only manufacturing unit in Europe ever since. Based on 2023 data, the company is the 12th largest company in the country in terms of revenue. Thanks to its partners, suppliers and its 78-member national dealer network, it contributes to the livelihoods of approximately 10,000 employees, according to the company's statement.

Domestic series production of their vehicles began in 1992, and they have been exporting abroad since 1994. The Esztergom plant has also been producing hybrid cars since 2019, with the 500,000th unit completed in January this year.