Suzuki Motors says Brexit to have 'major' impact on earnings

The Japanese automaker said that would offset the impact by cutting costs and local procurement

Suzuki Motor Corp on Wednesday said currency market volatility after Britain voted to exit the European Union (EU) would likely have a "major" impact on earnings, and that it would offset the impact by cutting costs and local procurement.

Suzuki Motors, which sells nearly half of its vehicles in India, said volatility in India's rupee and the euro would have a negative impact on the Japanese automaker.

Suzuki's overseas production facilities include plants in India and EU member state Hungary.

The yen surged after Britain's vote, and analysts expect the strengthening currency to pull down operating profit at Japan's automakers when they convert proceeds made overseas into yen. Many of the automakers also export vehicles from Japan.

Suzuki already expects to take a 62.0 billion yen ($605.59 million) hit for the current year due to foreign exchange, contributing to a 7.8% slide in annual operating profit compared with the year earlier.

Speaking at Suzuki's annual shareholders meeting, one executive said cost cuts and an increased effort at overseas plants to procure parts locally would be means of making up for any further currency impact.

($1 = 102.3800 yen)