Juan Lopez Frade, president of Suzuki Ibérica, poses a complicated immediate future for the automotive sector dragged down by the general situation of the economy. As a starting point, he reviews the current moment in the sector, which is trapped in a vicious circle due to the “shortage of semiconductors and the limitations in the global supply chain that have drastically reduced vehicle production. A situation that not expected to improve in the short term», he says.
During the traditional year-end meeting with the media, López Frade lamented that this situation has caused brands to “reduce traditional incentives, which means that buyers are spending more than ever to purchase a car.”
This situation is leading, in the words of the president of Suzuki Ibérica, to “consumers facing a mobility affordability crisis”. A situation that is especially aggravated by the increase in inflation, the increase in energy costs and the rise in interest rates, a situation that “is not expected to improve in the short term,” he says.
This forecast is based on López Frade on the objective data that is becoming known and that has led to a drop in consumer confidence to an all-time low with a drop of 42.6% between October 20221 and October of this year.
The situation means that “brands have prices that are out of the market and, therefore, our customers will keep their current car.” For López Frade this entails a danger, which is losing direct contact with our clients.
Despite everything, during the last two years, all manufacturers in the sector had a moderately profitable 2021, and so far in 2022. However, the president of Suzuki warns: “the tide is about to turn!”. A premonition that can be appreciated by looking at the financial indicators in Spain, “which point strongly towards an economic recession and which is a real cause for concern, because customer demand could be depressed at exactly the same point at which supply returns”, points.
With regard strictly to Suzuki’s annual results, López Frade points out that sales compared to 2021 have fallen “because we have not had cars”, which has been the reason that the closing forecast for 2022 is 4,500 registrations, compared to to 5,484 the previous year.
López Frade recalls that in the meeting with the media last year he already predicted that the global market for registrations of all brands in Spain would be 800,000 units, a figure that is on the way to being fulfilled. These records are the same as those experienced in 2011, when we were in the midst of an economic crisis.
Looking ahead to 2023, it calculates that the market will grow by 7.5% to 860,000 vehicles sold in Spain. For its part, Suzuki is confident of registering 6,500 units, which is the total number of vehicles committed to it from Japan, which will mean increasing sales by 44.4%.