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Suzuki has overtaken BMW to become the most profitable car company in the world. Suzuki gained a margin of 11.8 per cent in profits in the third quarter. This is 0.4 per cent higher than BMW during the same time period.
BMW, back in 2016 also lost the title of the world's largest seller of luxury cars to Mercedes-Benz.
India is the biggest market for Suzuki. Maruti Suzuki controls 51 per cent of the market share in India. This translates to Maruti selling more cars in India than what Suzuki sells globally. Also, according to previous reports, every second car sold in India is a Maruti.
According to various reports, BMW lost its profitability mainly due to two reasons: diesel scandal and loss from trade tariffs between Germany and the USA. Although the diesel scandal did impact BMW, they did not face any major recalls such as Volkswagen or Daimler.
However, even after these losses, BMW continued to be more profitable than any other company for over a year, until the last quarter. Suzuki, on the other hand, has been recording year-on-year profits of 68 per cent. This surge is due to the increasing demand for their cars in India.
Suzuki's annual operating profits increased to USD 3.3 million in May 2018. Although, both Suzuki and BMW did record a drop in annual sales of 4.8 and 2.8 per cent, respectively.
Thoughts On Suzuki Becoming The Most-Profitable Car Company
Suzuki is now planning to further grow its sales in India. Maruti Suzuki is working on producing a total of two million cars annually in India, by 2020. This number is further expected to grow to five million by the year 2030.
Suzuki's recent agreement with Toyota India will also help the company increase sales even further.
Currently, Suzuki operates three plants in India, two of which are under Maruti Suzuki. While Maruti operates the two plants in Haryana, their plant in Gujarat comes under Suzuki directly.
Source: Handelsblatt Global