Suzuki plans sales of 1 million units and exports of 200,000 in FY2010 in India
Company enhances marketing activities for Splash and A-Star/Alto
designed for sales worldwide
Oct. 6, 2009 No.814
Suzuki to market its 4th and 5th versions of its global cars, the Splash and A-Star; will scale...
Suzuki forecasts FY2009 sales will decline by 23.5%, expects operating profit of 10 billion JPY
Postpones constructing new plants in Thailand and Russia, drastically reduces types of...
In Japan, Suzuki plans to sell 655,000 units in FY2009, which includes 580,000 mini vehicles...
In India, Suzuki plans to sell 1 million units and export 200,000 in FY2010
North American sales deceased 55% year-on-year in January-August 2009; Suzuki plans to...
Executive Summary
For FY2009, Suzuki forecasts its consolidated sales will be 2,300 billion JPY, a year-on-year decrease of 23.5%. It predicts that its consolidated operating profit will be 10 billion JPY and its consolidated net profit will be 5 billion JPY. Especially, its overall sales outside Japan have been decreasing significantly, falling 19.1% year-on-year in FY2008 and are expected to continue to decline in FY2009 also, dropping 33.3% year-on-year.
As a result, Suzuki has postponed the timing of when its new plants scheduled to be built in Thailand and Russia will go online. Also, it is rationalizing its operations by reducing the number of engine types it currently produces, from 12 to around four. Its capital expenditures in FY2009 will be 185 billion, a 14.4% reduction compared to what they were in FY2008.
Suzuki's launch of new vehicle models includes stepping up sales activities surrounding its two cars designed to be sold worldwide, the Splash and the A-Star. (The latter is sold as the Alto in Europe.) On the other hand, Suzuki will scale back its marketing plans for a 3rd-stage car "Kizashi" designed to be sold worldwide in 2010. Nevertheless, it will at least launch the Kizashi sedan in North America at the end of 2009.
In India, which is Suzuki's largest market, its sales dropped in the October-December period of 2008 but showed signs of recovery at the beginning of 2009. In the April-August 2009 period, Suzuki's sales were rather strong in India, up 16.6% year-on-year, selling 335,000 units. In addition, the volume of vehicles exported from India was up 2.3 times, to 55,000 units. In FY2010, it targets selling 1 million units in the country and exporting 200,000.
Suzuki to market its 4th and 5th versions of its global cars, the Splash and A-Star; will scale down launch of Kizashi
Suzuki launched its 2nd stage global cars, the Splash and A-Star, in India, Europe, Japan, and China in 2008 and 2009. Suzuki had been planning to launch a midsize passenger car, the Kizashi, as its 3rd-stage global vehicle in India, Europe, North America, and Japan starting in 2010. Yet, due to the deterioration of the market, it scaled back this project and will only sell a 2400cc Kizashi sedan in North America at the end of 2009.
Suzuki's cars sold on a worldwide basis
| 2nd stage (The theme is "Family Car") | 3rd stage (The theme is "Status") |
||
| 4th world car | 5th world car | ||
| Splash | A-star | Concept Kizashi (Note 2) | |
| India | The Gurgaon plant produces the model. Launched in May 2009 (Model name: Ritz) |
The Manesar plant produces the model. Launched in November 2008. |
|
| Europe | Production began at the plant in Hungary in the spring of 2008 |
Marketing of the model imported from India began in March 2009. (Model name: Alto) (Note 3) |
|
| North America |
The company is scheduled to launch the 2400cc Kizashi sedan in the US at the end of 2009. | ||
| Japan | Marketing of the model imported from the Hungarian plant began in October 2008. | ||
| China | Production began at Chongqing Changan Suzuki Automobile in the summer of 2009. |
||
| Source: Suzuki's press releases dated 2007.9.12/2008.3.7/2009.10.21/2009.3.4/2009.4.9 | |
| (Notes) 1. | Suzuki's first vehicle sold worldwide was the Swift, releasing it in 2004. Its second was the Escudo (called Grand Vitara outside Japan), and its third was the SX4. It said that the Swift, Escudo, and SX4 were all designed under the same theme of "sporty". |
| 2. | The Kizashi, which Suzuki unveiled in 2007 under the theme of "status", was a D-segment, midsize passenger car capable of being mounted with a V6 3600cc engine. The company had announced that it would introduce sedan, wagon, and SUV versions of the Kizashi in Japan, the US, Europe, and India starting in 2010, but decided to only sell a 2400cc engine sedan in the US at the end of 2009, for the time being. |
| 3. | Outside Europe, this vehicle is called the Celerio. The company plans to sell 70,000 a year. The model comes with a 1000cc engine that meets the Euro 5 emission standard. The manual transmission (MT) model's CO2 emission is 103g/km and its fuel consumption is 100km/4.4L. Suzuki is delivering 30,000 units a year to Nissan on an OEM basis. Nissan markets the vehicle as the PIXO in Europe. |
Suzuki forecasts FY2009 sales will decline by 23.5%, expects operating profit of 10 billion JPY
In FY2008, which ended in March 2009, Suzuki's sales and profit both were down year-on-year for the first time in ten years since FY1998. It posted sales of 3,004.9 billion JPY (down 14.2% year-on-year), an operating profit of 76.9 billion JPY (down 48.5%), and a net profit for the year of 27.4 billion JPY (down 65.8%). And its FY2008 operating profit in Asia, which includes results for India, was 35.3 billion JPY, surpassing its operating profit in Japan (28.8 billion JPY) for the first time.
In FY2009, Suzuki forecasts worldwide sales of 2,300 billion JPY, a decrease of 23.5% year-on-year. (It expects sales outside Japan to fall 33.3%.) It forecasts a worldwide operating profit of 10 billion JPY, a 87.0% year-on-year drop; and a net profit of 5 billion JPY, an year-on-year decline of 81.8%.
Suzuki's consolidated business results |
(Million Yen) |
| FY2004 | FY2005 | FY2006 | FY2007 | FY2008 | FY2009 Forecast |
Apr.-Jun. 2008 |
Apr.-Jun. 2009 |
|
| Net sales domestic overseas |
2,365,571 893,100 1,472,500 |
2,746,453 934,500 1,812,000 |
3,163,669 973,500 2,190,200 |
3,502,419 981,400 2,521,000 |
3,004,888 965,500 2,039,300 |
2,300,000 940,000 1,360,000 |
910,405 242,700 667,700 |
577,143 207,400 369,700 |
| Operating profit Ordinary profit Net profit |
107,542 109,532 60,506 |
113,865 119,321 65,945 |
132,900 139,183 75,008 |
149,405 156,904 80,254 |
76,926 79,675 27,429 |
10,000 20,000 5,000 |
33,797 45,434 26,033 |
6,861 12,569 2,138 |
| Capital Expenditures Depreciation R&D Costs |
163,300 97,700 86,900 |
245,900 126,500 89,900 |
207,400 149,900 92,100 |
243,600 161,600 108,700 |
216,200 141,200 115,000 |
185,000 135,000 105,000 |
52,900 38,300 24,300 |
27,700 29,300 19,500 |
| Number of employee | 39,454 | 40,798 | 45,510 | 50,241 | 50,613 | - | 52,944 | 51,894 |
| Forex (US$) | 107 Yen | 114 Yen | 117 Yen | 114 Yen | 101 Yen | 90 Yen | 110 Yen | 97 Yen |
| Forex (EUR) | 136 Yen | 139 Yen | 151 Yen | 160 Yen | 144 Yen | 115 Yen | 161 Yen | 135 Yen |
| Source: Suzuki's FY2008 Consolidated Financial Results | |
| (Notes) 1. | In looking at Suzuki's FY2008 results by business segment, we noted that Suzuki posted sales of 2,524 billion JPY and an operating profit of 69 billion JPY in its automobile business. It recorded sales of 454.3 billion JPY and an operating loss of 6.4 billion JPY in its motorcycle business. |
| 2. | The company says that the FY2009 forecast is based on a very bleak scenario, which assumes an exchange rate of 90 yen to one US dollar. |
| 3. | In November 2008, GM sold the 3% stake it held in Suzuki, thereby dissolving all capital alliance to the company. The two companies, however, will continue operating their joint ventures including CAMI, a joint venture plant in Canada. |
| 4. | According to Automotive News Europe dated September 20, 2009, VW is currently in negotiations to invest in Suzuki. |
|
Suzuki's FY2009 forecast: decreased production volume both in and outside Japan; Japan domestic production to fall 16.3% due to reduced export volume
In FY2008, Suzuki sold 665,000 units in Japan, a year-on-year decrease of 1.2%; and 1,641,000 outside Japan, a decrease of 5.3% year-on-year. This amounted to a total of 2,306,000 units sold for the year and overall 4.1% drop. Based on Suzuki's sales plans for FY2009, the company forecasts that it will sell 1.5% less in Japan and a 6.5% less outside Japan. This amounts to 5% less in FY2009, for a total of 2.19 million units.
Suzuki forecasts that its production volume in FY2009 in Japan will significantly decrease due to a drastic drop in the number of vehicles it will produce for export. It predicts a 16.3% year-on-year drop in production, as it foresees producing 953,000 units, compared to the 1,139,000 units it produced in FY2008. Its production volume outside Japan will slightly decrease to 1,348,000 units. In total, its FY2009 production volume will be 2,301,000 units, down 7.7% year-on-year.
Suzuki's new vehicle sales volume |
(units) |
| FY2004 | FY2005 | FY2006 | FY2007 | FY2008 | FY2009 Forecast |
Apr.-Jun. 2008 |
Apr.-Jun. 2009 |
|
| Japan | 672,981 | 707,167 | 690,668 | 673,259 | 664,880 | 655,000 | 161,000 | 141,000 |
| Overseas | 1,219,492 | 1,364,585 | 1,530,958 | 1,732,490 | 1,641,176 | 1,535,000 | 456,000 | 400,000 |
| Worldwide | 1,892,473 | 2,071,752 | 2,221,626 | 2,405,749 | 2,306,056 | 2,190,000 | 618,000 | 541,000 |
| Source: Suzuki's FY2008 Consolidated Financial Results | |
| (Note) | While the figures show the sales volume of new Suzuki brand vehicles, sales in Japan include also Chevrolet vehicles. Suzuki announced its FY2009 business plan in May 2009. |
Suzuki's production volume |
(1,000 units) |
| FY2004 | FY2005 | FY2006 | FY2007 | FY2008 | FY2009 Forecast |
Apr.-Jun. 2008 |
Apr.-Jun. 2009 |
|||
| Japan | for Japan market |
Mini | 602 | 632 | 608 | 588 | 590 | 576 | 149 | 134 |
| Small | 72 | 79 | 83 | 82 | 79 | 69 | 21 | 16 | ||
| Export | 266 | 314 | 388 | 415 | 331 | 191 | 107 | 34 | ||
| OEM | 118 | 109 | 134 | 134 | 139 | 117 | 32 | 25 | ||
| Domestic production | 1,058 | 1,133 | 1,212 | 1,219 | 1,139 | 953 | 310 | 210 | ||
| Overseas | Europe | 111 | 161 | 189 | 252 | 260 | 188 | 79 | 46 | |
| North America | 0 | 0 | 22 | 28 | 7 | 0 | 4 | 0 | ||
| Asia | 842 | 907 | 987 | 1,138 | 1,088 | 1,160 | 290 | 308 | ||
| Overseas production | 952 | 1,067 | 1,199 | 1,418 | 1,355 | 1,348 | 373 | 354 | ||
| Production Total | 2,010 | 2,200 | 2,412 | 2,637 | 2,494 | 2,301 | 683 | 564 | ||
| Source: Suzuki's FY2008 Consolidated Financial Results | |
| (Note) | Production in Japan includes the figures for both completed vehicles and CKD units. Production outside Japan is based on the actual number of vehicles leaving the production lines and does not include units assembled on a CKD basis. |
Postpones constructing new plants in Thailand and Russia, drastically reduces types of engines produced
In FY2009, Suzuki plans to invest 185 billion JPY, which is a 14.4% reduction compared to the amount it invested in FY2008. Its R&D expenses, set at 105 billion yen, are down by 4.4%. As for its operations outside Japan, Suzuki has postponed constructing new plants in Thailand and Russia and in the autumn of 2008 it also terminated production of the XL7 at CAMI, its joint venture with GM, located in Canada.
In addition, it intends to reduce the number of engine types that it produces, from the current 12 to around four. It will also work on standardizing parts so that they can be used on both mini vehicles and compact cars, thereby enabling work hour to be better used on developing hybrid and electric vehicles. It has already started narrowing down the types of engines it produces and mounts on vehicles sold in Japan.
Suzuki postpones building new plants in Thailand and Russia and significantly reduces the number of engine types it produces
| Postpones launch of Thai plant |
Suzuki won approval from the Thai government at the end of 2007 to produce environmentally friendly cars. It had announced that it would invest 9.5 billion baht (approximately 31.4 billion JPY) and would begin producing them in the summer of 2010. However, Suzuki postponed the launch of operations until 2011 or after. |
| Postpones launch of the Russian plant |
Suzuki announced in June 2007 that it would build a new plant in the vicinity of St. Petersburg, Russia. The plant was to start operations in the latter half of 2009. However, Suzuki postponed the start up of operations due to deteriorating market conditions. |
| Terminates production of XL7 at CAMI |
Suzuki virtually terminated the production of the XL7 SUV in the autumn of 2008 at Canada-based CAMI, its joint venture with GM, since it produced only five units between January-July 2009. In the US, where Suzuki targeted selling 50,000 XL7s a year, it only sold 23,176 in 2007 and 22,554 in 2008. |
| Reduces available engine types to four |
Suzuki makes a range of engines that vary by 100cc's in order to satisfy the varied needs in countries where it operates, currently offering a lineup of 12 types of gasoline engines that range from 660cc's to V6 3600cc's, the latter of which are mounted on XL7 designed for North America. However, Suzuki will reduce the number of engine types to approximately 4 in the next five years, intending to allocate work hours spent on engines to activities involving the development of hybrid and electric vehicles. |
| Standardizes parts used in mini vehicles and compact cars |
Suzuki will standardize transmissions, engine parts, and other automotive parts used in mini vehicles and compact cars (the latter with engines up to 1,000cc's). It will do this when it makes model changes to these vehicles, which include the A-Star (marketed in India) and the Alto (marketed in Europe), |
| Source: Suzuki's press releases dated 2007.6.8/2007.12.7/2008.12.22, Automotive News 2009.8.3 | |
| (Note) | The XL7, which CAMI produced, shared the same platform with the Chevrolet Equinox that CAMI also produced. Reportedly, Suzuki had planned to produce models exclusively for the US market at CAMI, but has put this plan on hold because of the slumping US auto market. |
Suzuki reduces the number of engine types to be used in vehicles marketed in Japan
| Escudo | In June 2008, the company eliminated the 2700cc V6 engine mounted in the Escudo designed for Japan, replacing it with the 3200cc engine mounted on the Grand Vitara sold in the USA. (The Grand Vitara is the name under which the Escudo is sold outside Japan.) Furthermore, the Escudo currently comes with only an inline 4-cylinder 2400cc engine. |
| Swift | In May 2009, the company eliminated the 1500cc Swift and only makes 1200cc and 1300cc models. The Swift Sport has a 1600cc engine. |
| At the same time, it revamped the CVT mechanism mounted on the 2WD, 1200cc Swift to improve the fuel efficiency from 20.5km/L to 21.0km/L, which meets the preferential tax scheme for environmentally friendly vehicles. | |
| SX4 | In May 2009, the company eliminated the 2000cc engine SX4 version and only makes a 1500cc model. |
Source: Suzuki's press releases dated 2008.6.26/2009.5.13/2009.5.20
In Japan, Suzuki plans to sell 655,000 units in FY2009, which includes 580,000 mini vehicles, resulting in a year-on-year reduction of 10,000
In FY2008, Suzuki's sales in Japan decreased by 8,000 units year-on-year, to 665,000. In FY2009, it plans to sell 655,000, a further decrease of 10,000 units. In terms of the volume of mini-car sales, during fiscal years 2006, 2007, and 2008, Suzuki came in second place, losing out to Daihatsu. But, Suzuki moved into first place in March 2009, the first time in fifteen months. In FY2009, Suzuki plans to sell 580,000 mini vehicles, up slightly from what it sold in FY2008. For reference, Daihatsu plans to sell 590,000, a 3.3% year-on-year drop.
Suzuki's releases of new models in Japan include the Splash, released in October 2008. It imports the Splash from Hungary. It also launched sales of the new Alto Lapin mini vehicle in November of the same year.
Suzuki's sales volume in Japan |
(1,000 units) |
| FY2004 | FY2005 | FY2006 | FY2007 | FY2008 | FY2009 Forecast |
Apr.-Jun. 2008 |
Apr.-Jun. 2009 |
|
| Mini Vehicles | 600 | 626 | 606 | 587 | 579 | 580 | 141 | 125 |
| Small Vehicles | 72 | 82 | 85 | 86 | 85 | 75 | 20 | 16 |
| Japan Total | 673 | 707 | 690 | 673 | 665 | 655 | 161 | 141 |
| Daihatsu's mini vehicle sales | 568 | 591 | 616 | 612 | 619 | 590 | 154 | 132 |
Source: Suzuki's Reference for FY2008 Financial Results
Suzuki's new model plan for the Japanese market (From the second half of 2008 to 2010)
| Debut | Outline | |
| Splash | October 2008 |
The company imports the Splash, which it launched in Europe in the spring of 2008, from its plant in Hungary. Suzuki released it in Japan in October 2008. It comes with a 1200cc engine and a CVT. The Splash is a stylish vehicle created in Europe. Even though compact, it offers a roomy interior, making use of its tall body design. |
| New Alto Lapin |
November 2008 |
The Alto Lapin is a fully remodeled vehicle based on the platform of the new Wagon R, which was launched in September 2008. The 10-15 mode fuel consumption of the 2WD version, which comes with a naturally aspirated engine and a CVT, is 24.5km/L. Suzuki also makes a turbo engine version. The new model is being promoted mainly to female customers in their 20s to 30s, as was the first model version released in 2002. |
| Next Swift | Around 2010 | The company is said to plan to launch a new version by 2010. |
| Hybrid vehicle | n.a. | The company is believed to be commercializing a hybrid vehicle based on a 1300cc-class compact car. |
In India, Suzuki plans to sell 1 million units and export 200,000 in FY2010
Maruti Suzuki, Suzuki's consolidated subsidiary in India, saw growth in terms of unit sales, increasing 1.7 times; and in terms of revenue, increasing 2.2 times over the last five years. It has maintained a net income to sales ratio of more than 9% since FY2005, not counting the second half of FY2008.
Suzuki aims to sell 1 million units in India in FY2010. In addition, it began exporting the Alto (A-Star) to Europe at the beginning of 2009. It plans to increase the total number of vehicles it exports, from 70,000 units in FY2008 to 150,000 in FY2009, and to 200,000 in FY2010.
| (Note) | In India, the passenger car market shrank by 1.2% year-on-year between July-September 2008 and by 12.7% between October-December 2008. Yet, because of the government's stimulus program, some recovery has been seen in the market since the beginning of 2009. Maruti Suzuki estimates that the passenger car market will grow by 5% in FY2009, between April 2009 and March 2010. |
Maruti Suzuki's performance |
(Million Rs) |
| FY2003 | FY2004 | FY2005 | FY2006 | FY2007 | FY2008 | Apr.-Jun. 2008 |
Apr.-Jun. 2009 |
|
| Sales volume domestic export |
472,122 420,947 51,175 |
536,301 487,402 48,899 |
561,822 527,038 34,784 |
674,924 635,629 39,295 |
764,842 711,818 53,024 |
792,167 722,144 70,023 |
192,584 180,093 12,491 |
226,729 197,415 29,314 |
| Net sales Net profit Net profit ratio |
90,812 5,420 6.0%
|
109,108 8,540 7.8%
|
120,034 11,891 9.9%
|
145,922 15,620 10.7%
|
178,603 17,308 9.7%
|
203,583 12,187 6.0%
|
47,310 4,659 9.8%
|
63,403 5,835 9.2%
|
| Domestic market in India Maruti's Marketshare |
755,708
55.7%
|
885,212
55.1%
|
948,460
55.6%
|
1,159,499
54.8%
|
1,304,396
54.6%
|
1,299,768
55.6%
|
| Source: Maruti Suzuki's Annual Report 2008-09, Presentation for Investors (March 2009) | |
| (Notes) 1. | The exchange rate is 1 INR=approximately 2.1 JPY, as of the beginning of September 2009. |
| 2. | Suzuki holds a 54.21% stake in Maruti Suzuki. |
| 3. | "Domestic market in India" and "Maruti's marketshare" are based on the passenger car market that includes vans, according to Maruti Suzuki, which has had more than a 50% share of the market since FY1986. |
| 4. | Suzuki in FY2010 (which ends March 31, 2011) plans to sell 1 million units in India and export 200,000. Half of the vehicles to be exported are assumed to be the A-Star. |
Maruti Suzuki over the past three years has been increasing its sales in the A2 segment, in which it launched the Swift, A-Star, and Ritz; and in the A3 segment, in which it launched the SX4 and DZire. In the April-August 2009 period, sales in the A2 segment rose 25.0% from a year earlier and those in the A3 segment increased as much as 34.7%. Export volume more than doubled.
Suzuki's new models launched in India in the latter half of 2008 to 2009
| Debut | Outline | |
| A-Star | November 2008 |
The A-Star is the 5th vehicle model among Suzuki's line-up of cars sold on a worldwide basis. Production began at the Manesar plant in the autumn of 2008. Suzuki developed the A-Star under the idea of producing it in India and exporting it to more than 150 countries in Europe, the Middle East, South America, and Asia. The A-Star is mounted with a new K10B 1000cc engine. The version to be exported to Europe meets the Euro 5 emission standard. |
| Ritz (Splash) |
May 2009 |
The Splash, which Suzuki produces at its plant in Hungary and launched in Europe in the spring of 2008, began to be produced as the Ritz at Maruti Suzuki's Gurgaon plant in 2009. It released the Ritz in May 2009. It comes with either a 1200cc gasoline engine or a 1300cc diesel-powered engine. Suzuki plans to sell 60,000 a year, mainly aiming for the family market. |
| Source: Maruti Suzuki's press releases dated 2008.11.19/2009.5.15 | |
| (Note) | Maruti Suzuki equips its Swift, Swift DZire (Swift sedan), and Ritz with a 1300cc diesel-powered engine. It imported the technology for this engine from Fiat. |
Maruti Suzuki's sales volume by segment |
(units) |
| Segment | Models | FY2006 | FY2007 | FY2008 | Apr.-Aug. 2008 |
Apr.-Aug. 2009 |
| A1 | M800 | 79,245 | 69,553 | 49,383 | 25,319 | 12,649 |
| C | Omni, Versa | 83,091 | 89,729 | 77,948 | 33,554 | 36,136 |
| A2 | Alto, Wagon-R, Estilo, Swift, A-star, Ritz |
440,375 | 499,280 | 511,396 | 197,889 | 247,321 |
| A3 | SX4, Dzire | 29,697 | 49,335 | 75,928 | 27,376 | 36,869 |
| MUV | Gypsy, Grand Vitara | 3,221 | 3,921 | 7,489 | 2,979 | 1,929 |
| Domestic Total | 635,629 | 711,818 | 722,144 | 287,117 | 334,904 | |
| Export | 39,295 | 53,024 | 70,023 | 23,918 | 54,707 | |
| Total sales | 674,924 | 764,842 | 792,167 | 311,035 | 389,611 | |
| Source: Maruti Suzuki's press release dated 2009.9.1 | |
| (Notes) 1. | Models in blue are cars designed for the global market and were launched in 2004 or after. |
| 2. | The C segment includes vans, which are classified as passenger cars. On the other hand, "MUV" means Multi Utility vehicles, which are not included under passenger cars. |
| 3. | Maruti Suzuki has maintained more than a 75% market share in the "A1+A2+C" segment during the last few years. |
Maruti Suzuki's new engine plant launches operations, company upgrades aging assembly plant
In October 2008, in order to enhance its business structure to sell 1 million units in India and export 200,000 from India in 2010, Suzuki started operations at its new engine plant located on the premises of its Gurgaon plant. This new plant, which is capable of producing 240,000 units a year, began producing the new KB engine that the company recently developed.
As announced in September 2009, the company will construct a new factory at its Manesar plant to produce finished vehicles, transferring production equipment and facilities having an annual production capacity of 250,000 units from its aging Gurgaon plant. It intends to consolidate production of finished vehicles in the Manesar plant and production of engines in the Gurgaon plant in the future. The company will also strengthen its development structure, planning to manufacture a proprietary vehicle model in India in 2012.
Maruti Suzuki launched operations of new engine plant and upgrades aging plant
| Constructing new engine plant |
In October 2008, Maruti Suzuki started operations of its new engine plant located within the site of the Gurgaon plant. The new plant, in which the company invested 12 billion rupees, is capable of producing 240,000 units annually. It produces Suzuki's new, all-aluminum KB engine. Vehicles mounted with these engines are the first vehicles in India to be sold that meet India's emission standard, the BS-IV, that will go into effect in April 2010. Vehicles designed for export to Europe will meet the Euro 5 emission standard. |
| The new plant supplies a 1000cc K10B engine to the A-Star that the company started to produce in November 2008; and the Alto, which the company exports to Europe. It produces a 1200cc K12M engine for the Ritz (Splash), which was launched in May 2009. In the next three to five years, Suzuki will gradually increase the number of vehicle models on which it mounts these engines. | |
| Restructuring production structure |
In September 2009, Suzuki announced that it would build a new factory capable of producing 250,000 finished vehicles a year. It will build the plant on the site of the Manesar plant, which is capable of producing 300,000 units. Suzuki will transfer some production lines from its aging Gurgaon plant that started production in 1983 to the new plant within the next two years. It plans to transfer enough production equipment and facilities to produce 250,000 units, from the 700,000 annual capacity it currently has at the Gurgaon plant, investing 20 billion JPY or less. |
| The official production capacity in India is still 1 million units a year, but this could possibly increase by approximately 100,000 based on changes to work schedules and other changes. In addition, Suzuki will gradually concentrate the production of finished vehicles in the Manesar plant and manufacturing and assembling of engines in the Gurgaon plant. | |
| Establishing new R&D base |
In August 2009, Maruti Suzuki reached an agreement with the Haryana State Government, whereby the State will allocate 700 acres of land to Maruti to build a new R&D center. The company plans to invest 10-15 billion rupees. Multi Suzuki declares that it will become Suzuki Motor's global R&D hub for small cars. |
| The development division of Maruti Suzuki is currently capable only of making minor changes to vehicles' exteriors, but is working to produce a proprietary, new vehicle in India. To accomplish this, the company will increase the number of engineers to 1,000 by March 2011, from the 687 it had at the end of January 2009. It will complete a test-drive course by 2012. The entire facility is planned to be completed in 2015. |
| Source: Maruti Suzuki's press releases dated 2008.10.21/2009.8.21/2009.9.5 | |
| (Note) | Maruti Suzuki plans to invest 24 billion rupees in FY2009, 13 billion rupees in FY2010, and 4 billion rupees in FY2011 in the above-mentioned product development project. In FY2009, it is planning to increase the production capacity for diesel-powered engines from the current 200,000, to 300,000 by the end of March 2010. |
North American sales deceased 55% year-on-year in January-August 2009; Suzuki plans to launch the Kizashi at the end of 2009
In 2006 and 2007, Suzuki sold more than 100,000 units a year in the US. Yet, its sales in the US decreased to 85,000 in 2008. Then, sales dropped to 32,000 in the January-August period of 2009, which amounts to a 55% decrease compared to sales during the same period of 2008. Suzuki posted the greatest percentage decrease among all the major auto manufacturers operating in the US.
In 2006 and 2007, Suzuki sold between 40,000 to 50,000 units of the Forenza and Reno. (It outsourced production to GM Daewoo.) It discontinued selling these vehicle models in the 2008 model year, hoping that sales of the SX4, which it launched in 2006, would make up for loss in volume of the Forenza and Reno. Unfortunately, the anticipated sales never materialized. Now, Suzuki plans to launch a new, midsize passenger car, the Kizashi, in the US at the end of 2009.
Suzuki's sales volume by model in the US |
(units) |
| 2004 | 2005 | 2006 | 2007 | 2008 | Jan.-Aug. 2008 |
Jan.-Aug. 2009 |
|
| Aerio | 9,439 | 7,967 | 8,769 | 1,531 | 80 | 23,327 | 16,171 |
| SX4 | 3,453 | 15,209 | 29,483 | ||||
| Forenza/Reno | 24,796 | 41,394 | 48,579 | 42,113 | 20,796 | 18,289 | 3,740 |
| Verona | 12,874 | 8,411 | 2,302 | 315 | 3 | 2 | 1 |
| Passenger cars | 47,109 | 57,772 | 63,103 | 59,168 | 50,362 | 41,618 | 19,912 |
| Equator | 0 | 13 | 0 | 1,961 | |||
| Grand Vitara | 4,860 | 8,624 | 26,931 | 19,540 | 11,936 | 9,516 | 6,133 |
| Vitara | 3,476 | 233 | 8 | 0 | |||
| XL7 | 18,501 | 15,472 | 10,948 | 23,176 | 22,554 | 19,300 | 3,787 |
| Light trucks | 26,837 | 24,329 | 37,887 | 42,716 | 34,503 | 28,816 | 11,881 |
| US Sales Total | 73,946 | 82,101 | 100,990 | 101,884 | 84,865 | 70,434 | 31,793 |
| Source: Ward's Automotive Yearbooks, Automotive News 2009.9.7 | |
| (Notes) 1. | GM Daewoo supplied the Forenza, 2000cc sedan; the Reno, a 2000cc hatchback; and the Verona, a 2500cc sedan on an OEM basis. Suzuki terminated sales of the Verona in the 2006 model year, and the Forenza and Reno in the 2008 model year. |
| 2. | Suzuki ended production of the XL7 at CAMI (based in Canada) in the autumn of 2008 and sold almost all the inventory on hand in the summer of 2009. It has not announced any future production plans. According to the announcement the company made in May, Suzuki plans to produce no vehicle in North America in FY2009. |
| 3. | The number of Suzuki dealers in the US decreased from 460 in July 2008 to 380 in July 2009. |
Suzuki's new model plan for North America (From the latter half of 2008 to 2011)
| Debut | Outline | |
| Equator | Autumn 2008 |
The Equator is a light-duty pickup truck that is based on the Frontier. Nissan produces it at its Smyrna plant in the US, supplying it on an OEM basis. It comes with either an inline 4-cylinder 2500cc engine or a V6 4000cc engine. In January-August 2009, Suzuki sold 1,961 in the US. |
| SX4 Sportback |
Autumn 2009 |
The SX4 Sportback will be a high performance version of the SX4 Crossover that the company currently sells. The company plans to boost the maximum output of the engine from 143hp to 150hp. It also plans to upgrade the 5-speed MT version to a 6-speed MT, and the 4-speed AT version to a CVT with manual shift. |
| Concept Kizashi |
End of 2009 |
The company will produce the Kizashi sedan with a 4-cylinder 2400cc engine at its Sagara plant in Japan, launching it at the end of 2009. |
| Kizashi Crossover |
2011MY | The Kizashi Crossover is based on the Kizashi sedan and is expected to be launched in the 2011 or 2012 model year. |
| Next Swift | 2011MY | The company is also expected to launch the next version of the Swift in North America, starting with the 2011 model year. |
| Kizashi Hybrid vehicle |
2011 | The company will install a lithium-ion battery hybrid system that it jointly developed with GM, in the Kizashi sedan that it plans to launch in the US in 2011. |
Source: Automotive News 2009.7.20/2009.8.24, Nihon Keizai Shimbun 2009.8.16
