Hungarian Suzuki plant further cuts production fcast for 2009

Hisashi Takeuchi, the recently appointed CEO of Suzuki Hungary, is not exactly optimistic about the prospects of the car industry. In an interview with local weekly Figyelő he said the US and European markets have not yet bottomed out, and this is especially true for Central and Eastern Europe and Hungary.

While early this year Suzuki Hungary expected some 220,000 cars to roll down from its production lines in 2009, Takeuchi said, he currently believes targeting 190,000-200,000 units is a more realistic plan.Magyar Suzuki released its first official estimate for 2009 in December last year, targeting to produce 210,000 cars. In May, when the company unveiled its full-2008 results, the objective was already 200,000 units.

“We cannot even estimate how far sales will drop and we are even more in the dark about 2010," he told the weekly.

There are more unused capacities at Suzuki which pushed fixed costs higher. This has led to an increase in production costs, which forces Suzuki Hungary to save more than before in order to avoid losses.

“We need to cut costs. This year is important for Magyar Suzuki; it will turn out whether we can lower costs and keep up progress in quality," Hisashi Takeuchi said.

He clarified that Suzuki's 300,000-unit annual capacity was achieved on 6-day working weeks, in three-shift, 20-hour working days. Currently production takes place in two shifts on five-day working weeks, hence the estimate for output of about 200,000 cars this year.

“This is what we aim to maintain this year and next, as well," Takeuchi added.

Of Hungary's listed companies Rába is a key supplier to Suzuki therefore any sales difficulties at the carmaker is bad news for the automotive group too.

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