Yesterday, in an investor meet held in Tokyo, Suzuki Motor Corporation (SMC), unveiled its new mid-term 5-year management plan called ‘Suzuki Next 100’ which runs from 2015-2020.
01 Jul 2015 | 3928 Views | By Autocar Professional Bureau
Yesterday, in an investor meet held in Tokyo, Suzuki Motor Corporation (SMC), unveiled its new mid-term 5-year management plan called ‘Suzuki Next 100’ which runs from 2015-2020. The plan is aimed at preparing the company to firmly establish itself in the global automotive arena in 2020, when it completes 100 ...
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Yesterday, in an investor meet held in Tokyo, Suzuki Motor Corporation (SMC), unveiled its new mid-term 5-year management plan called ‘Suzuki Next 100’ which runs from 2015-2020. The plan is aimed at preparing the company to firmly establish itself in the global automotive arena in 2020, when it completes 100 years.
SMC, which is Japan’s fourth largest vehicle manufacturer, also named executive vice-president Toshihiro Suzuki as the new president and chief operating officer, replacing his father Osamu Suzuki, who has led the company since 1978. Osamu Suzuki will remain as chief executive officer and chairman of the company.
As per the Suzuki Next 100 plan, which Autocar Professional has reviewed, the company is looking to make Japan, India, Indonesia, Thailand and Hungary as production bases for global cars. At present, its automobile business growth is overwhelmingly centered in Japan, where it has a minicar market share of over 30% and compact car sales of over 100,000) and in India, where it commands a share of over 45% in passenger cars.
Clearly, the planned focus on the other countries could be to reduce its dependence on the Indian market (where it now seeing stiff competition from a host of new rivals) and the Japanese domestic market.
In India, SMC owns 56% of Maruti Suzuki India which accounted for 15.5% of SMC’s consolidated turnover. In May this year, Maruti Suzuki became the first carmaker in India to cross the 15-million vehicle sales mark, achieving the landmark in 31 years and 5 months since it rolled out the first Maruti 800 from the Gurgaon plant way back in 1983. In FY2014-15, Maruti Suzuki sold a total of 1,170,702 units, posting a year-on-year growth of 11.11%. Suzuki's two-wheeler arm in India (Suzuki Motorcycle India) sold 340,506 units, down 4.44% year on year.
In terms of models, SMC aims to concentrate on entry level to C-segment cars and also compact SUVs, which are seeing massive global demand. Overall, the Japanese carmaker plans to introduce 20 models globally over five years. Expect most of these launches to be in the Indian market, where Maruti Suzuki is all set to launch the all-new S-Cross in mid-July.
On the engine front, the company presentation says SMC will “for development efficiency, consolidate platforms and concentrate development of gasoline (petrol) engines.”
In FY2015, SMC saw consolidated sales of 3,100 billion yen (Rs 161,200 crore), a 2.80% growth over FY2014’s sales of 3015.5 billion yen (Rs 156,806 crore). For FY2019, the company is targeting an ambitious 3,700 billion yen (Rs 192,400 crore), which is around 20% growth over 5 years. SMC also plans to substantially hike its investment in R&D from 130 billion yen (Rs 6,760 crore) in FY2015 to 200 billion yen (Rs 10,400 crore) in FY2019. SMC had seen its global sales peak in FY2007 when it recorded revenues of 3.502.4 billion yen.
In terms of global sales of passenger cars, SMC will be banking on India to deliver big and also help retain its market share. In Asia, it expects sales to grow from an annual 1.9 million units to 2.2 million units in FY2019. In motorcycles, it expects moderate growth (as seen in the table below), with sales expected to growth in Japan, Europe and North America. In Asia, it forecasts its sales to drop from 1.57 million units in FY15 to 1.5 million in FY2019.
SMC expects India, which sold a total of 2.6 million passenger vehicles in FY2014-15, to become the world’s third largest passenger vehicle market by 2020 with annual sales of around five million units and further to eight million units by 2025.