Suzuki: Plans to sell 3 million units in India and increase local ASEAN production
Strategy to launch next-generation lightweight platform and mild hybrid models
2014/10/07
- Summary
- To promote local production for local consumption while striving for lower cost
- In-house development of next-generation lightweight platforms, diesel and hybrid engines
- Announces construction of new Gujarat plant, aiming to sell 3 million units
- Unit sales in April to June 2014 increased by 12.6% to 300,000 units in India
- Global strategic models: Celerio small car, Wagon R, Alivio midsize sedan
- Japanese market: Sales for 2013 reaches record high of 728,000 units
- Global sales expected to reach record high of 2.76 million units in FY 2014
- Aiming at record-high operating profit of JPY 188 billion in FY 2014
- Production Forecast by LMC Automotive: Suzuki's production will be 3.1 million units in 2017
Summary
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India and Southeast Asia as strategic locations
Suzuki Motor Corporation posted a record-high unit sales and operating profit in 2013 and achieved its mid-term goal, which was set to be achieved by 2014, a year earlier. As its tie-up with Volkswagen AG ended in a failure, Suzuki aims to focus on small cars in which it has a competitive edge for further development. The Indian market where the company has its largest market share and Southeast Asia, which is expected to grow in the coming years, will particularly be its strategic locations.
New technological strategies
Suzuki announced its automobile technological strategies in April 2014. It will develop a next-generation lightweight platform and introduce it within 2014. The company will also internally develop diesel engines, which have been procured externally. Furthermore, a mini vehicle with a mild hybrid system was launched in Japan in August 2014. While pursuing cost reduction, the company aims to continue to increase the product appeal, using its own technologies for improving environmental performance.
Aiming at 3 million unit sales in India in long-term
In India, Suzuki's local joint-venture partner, Maruti Suzuki India Limited, announced a policy that aims at a 3 million unit sales in the long-term. It will launch new SUVs and MPVs to expand its model lineup. It also announced in January 2014 that it would construct a new Gujarat plant in 2017 to enhance its production capacity. However, the construction of the plant will be funded entirely by Suzuki, not by Maruti Suzuki.
Outlook for FY 2014
The unit sales for the fiscal year ending in March 2015 (FY 2014) are planned to increase by 1.7% year-over-year (y/y) to 2.76 million units, renewing its record high of the previous year. The unit sales in Japan are expected to decline due to the shrinkage in demand, following a demand spike ahead of the consumption tax rise that was scheduled in April 2014. However, sales in Asia, especially in India, are expected to increase to 1.69 million units, up by 5.8% y/y. In its forecast of consolidated business results, the company aims to slightly increase its revenue to JPY 3 trillion and slightly exceed its record-high operating profit to JPY 188 billion. According to LMC Automotive, Suzuki's light vehicle production volume is expected to increase by 5.0% y/y to 2.69 million units in 2014 and to 3.14 million units in 2017, which is an increase of 22.5% from 2013.
Suzuki's litigation with VW over the termination of their comprehensive capital and business partnership agreement at the international court of arbitration is yet to be resolved as of September 2014. It is also reported that a certain conclusion will be reached within this year.
Related Reports:
Delhi Auto Expo 2014 (part 1): Maruti Suzuki (Mar. 2014)
Beijing Auto Show 2014: Suzuki (May 2014)
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