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
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.
To promote local production for local consumption while striving for lower cost
|Policies for product development|
|* To aim for top environmental performance|
|* "Striving for lower cost": To offer mainly small cars at affordable prices for customers|
|* To offer top-class products which delight customers|
Suzuki upholds a policy that it develops small cars that have the top class environmental performance while pursuing cost reduction as a product strategy. The company also defined its strategic regions as Japan (its homeland), India (its largest market), Southeast Asia, China and Europe. Based on the concept of the "local production for local consumption," the company is addressing the enhancement of its production capacities overseas, especially in Asia. It will launch 16 models in Japan and 14 models in India during the period from 2013 to 2017.
Strategies by region
|Regions||Strategies||New model launch plan between FY 2013 and FY 2017 (number of models)|
|Japan||* Mini vehicles are of high importance and Suzuki will vigorously launch new products as well as facelifted models. * To increase the number of the sales personnel and trainings; to expand and strengthen the distributors.||16|
|India||* Suzuki's most critical market * Aiming to achievea 40% market share (42% in FY 2013) that is supported by the expansion of the middle-income group, diversified consumer preferences and expansion of consumer base to provincial cities. * Local joint venture partner announced its long-term strategy "Maruti 2.0" in August 2014. It aims to sell 3 million units on a long-term basis (see below).||14|
|To strengthen products||To launch at least one model every year and enhance the compact, sedan and SUV models.|
|To strengthen sales network||To strengthen sales and used car services (especially in rural area).|
|To expand production system||New Gujarat plant|
|To strengthen R&D system||To set up an Indian development center and establish a development system in which Suzuki and Maruti work together as one unit.|
|To reinforce export||To use the region as a base for export to Africa, the Middle East and Latin America.|
|Southeast Asia||Promising markets.; Aiming to develop these markets as the next pillar of expansion.||9|
|To strengthen products & sales network||To launch at least one new model every year. To strengthen sales capabilities and service network.|
|To expand production system||To strengthen the mutual supply system within Southeast Asia. To enhance local production and procurement of components.|
|Indonesia||Suzuki is constructing new plants by investing JPY 93 billion. All the process lines of the engine and transmission plant are scheduled to start operations in November 2014. The automobile assembly plant will be brought into operations in January 2015 by shifting production of the MPV Ertiga from the existing Tambun plant. With these new plants, the production capacities of the entire Indonesia will be 250,000 units by FY 2015.|
|Thailand||The company increases its annual production capacity from 50,000 units to 100,000 units in 2014. It will start production of the Celerio, which will be the second model that complies with the Thailand government's eco-car policy,||7|
|China (Note)||* Sales of the A- and B-segments in which Suzuki has a competitive edge are stagnant. The company will launch the C-segment models that are suited for the consumer preferences in the market.||7|
|SX4 S-CROSS||Suzuki's first C-segment SUV. The model is produced and distributed by Chongqing Changan Suzuki Automobile Co., Ltd., starting at the end of 2013.|
|Alivio||A C-segment sedan. The model is scheduled to be produced and distributed by Chongqing Changan Suzuki Automobile Co., Ltd., starting at the end of 2014.|
|Europe||To boost its automobile business in Europe, Suzuki started to build its C-segment crossover model, the SX4 S-CROSS, in Hungary in 2013. The company also unveiled the all-new SUV Vitara at the 2014 Paris Motor Show. The new model is scheduled to be released in 2015.||7|
|Developing markets||To establish the foundations for building sales networks in preparation for future market growth.||-|
|Middle East & African markets||Suzuki will establish headquarters in India to distribute products, considering costs, quality, distance to markets, etc.|
|Latin America||Although Suzuki had been exporting the Japanese -made models, the company is planning to export the global models from India, Indonesia, Thailand, Hungary, etc.|
Source: Suzuki's presentation material distributed at the Tokyo Motor Show investors conference, 19 November 2013 (Note) In June 2014, Changan Automobile Co., Ltd., which has a joint venture company with Suzuki, announced that it will transfer 1% of its stakes in the joint venture, Chongping Changan Suzuki Automobile Co., Ltd., to Suzuki. After the deal, both the Suzuki side and Changan Automobile side will hold 50% stake in Changan Suzuki.
In-house development of next-generation lightweight platforms, diesel and hybrid engines
|Left side is the next-generation lightweight platform. Right side is the conventional platform. (Suzuki's presentation material in Tokyo Motor Show 2013)|
Suzuki announced its strategies for automobile technologies in April 2014. It will develop new lightweight platforms and integrate its platforms into three types. For gasoline engines, the company aims to increase the average thermal efficiency to 40% by 2020 and concentrate development resources into the four displacement engines under 1.4L. It also developed in-house 800cc diesel engines, which has been procured from other suppliers.
With regard to the electrification of automobiles, the company developed a unique mild hybrid system "S-enecharge" and launched it in August 2014. It also plans to develop a strong hybrid system.
Development of next-generation lightweight platform
|Integration of platforms||Suzuki will integrate all the platforms into three types: Mini, A- and B-segments. The C-segment platform that is currently used for the SX4 will be integrated into the B-segment platform. The development has been completed and the new platform will be employed, starting with the next-generation Alto, which is scheduled to be launched within 2014.|
|Modularization||Suzuki will use a modular approach to functional components, allowing cross-segment usage of common components to increase development efficiency. The company will integrate suspensions into four types; air-conditioning systems into two types; and front seat frames into three types.|
|Weight reduction||Suzuki reduced the whole vehicle weight by up to 15% by renovating the main structure and component layout to improve the bending rigidity and flexural rigidity by 30%. 1) The company will reduce the bend sections from the frame of the platform as much as possible and adopt a smooth shape. Abolish reinforcement and reduce sheet thickness. 2) Suzuki will ensure the body rigidity with less members by adopting a continuous frame (from the front frame to the rear frame of the body).|
|Engine development||Gasoline engine||To achieve 40% average thermal efficiency by 2020 * To increase the compression ratio (DUALJET atomization ignition technology, etc.) and reduce loss (cooled EGR and low-friction). To concentrate and consolidate engine development to Mini, 1.0L, 1.2L and 1.4L * To integrate the Mini 660cc engines into the R04A. * For compact car engines, develop a lineup of naturally-aspirated and direct-injection turbocharged engines by using a common base engine.|
|Diesel engine||Development of the in-house engines mainly for the Indian market (Note 1) * To develop a 793cc inline two-cylinder engine to be equipped on light commercial vehicles and introduce them into the market by 2015.|
|Transmission development||Auto Gear Shift||Newly developed Automated Manual Transmission that automatically operates the clutch and gearshift on the five-speed manual transmission. This transmission was first equipped on the Indian Celerio in February 2014. The engine was also equipped on a mini commercial vehicle, the Carry, which was launched in Japan in August 2014. It will be also employed for the Celerio for the European market, which is scheduled to be launched in 2014.|
|Hybrid system (Note 2)||Enecharge||The deceleration energy regeneration system, which was first equipped on the new Wagon R that was launched in September 2012. This system employs an alternator that has doubled the electric-generating capacity compared to the current lineup. The alternator is combined with a fast-chargeable lithium-ion battery and lead-acid battery. The system increases fuel efficiency by generating electricity and charging when decelerating the vehicle while reducing the use of power generation during driving.|
|S-enecharge||This is a mild hybrid system that combines a highly efficient integrated starter generator (ISG) and the existing Enecharge to add a motor drive and assist function. The system provides motor assistance during acceleration by using the energy regenerated during deceleration. The amount of energy regenerated during deceleration was increased by 30%. The system is installed on the Wagon R, which was partially redesigned in August 2014.|
|Source; Suzuki's "Automobile Technology Presentation" in April 16, 2014.|
|(Note) 1.||Suzuki currently procures diesel engines for the Indian market from Fiat S.p.A. for the Indian market The company is also producing the engine under a licensing agreement with Fiat.|
|2.||The company also plans to develop a strong hybrid system in the medium- and long-term.|
Announces construction of new Gujarat plant, aiming to sell 3 million units
Suzuki's Indian consolidated subsidiary, Maruti Suzuki, announced the "Maruti 2.0," which spells out its road map for the next 30 years in August 2014. According to the plan, Maruti Suzuki aims to increase the annual unit sales from approximately 1.16 million in 2013 to up to 3 million in the long-term.
Prior to this announcement, Suzuki announced in January 2014 that it will construct a new Gujarat plant to increase its production capacity. This announcement provoked the disapproval of Maruti Suzuki's minority shareholders since their parent company, Suzuki, intended to solely finance the plant construction. As a result, Suzuki has made some concessions. A vote to obtain approval of the minority shareholders will be held in November 2014.
Maruti 2.0: Strategies for the next 30 years
|Production, development and procurement system||* To construct a new Gujarat plant. The production capacity of the existing plants is 1.5 million units as of 2014. It is expected that the operation rate will reach 100% between 2015 and 2016 and production capacity will become insufficient.|
|* To strengthen the R&D system (reinforce the research facilities and personnel resources). The company will build an R&D center with a test course in the Rohtak district of Haryana state in the northern India by investing INR 20 billion. The center conducts R&D activities to increase fuel efficiency and develop diesel engines and alternative energies, such as CNG and LPG.|
|* To strengthen local procurement/cost reduction capabilities.|
|Sales strategies||* To strengthen sales and after-sales service networks (showrooms and logistics locations). * To establish a sales network in the rural area of India on the assumption that the future growth of India depends on the areas other than the cities.|
|Product strategies||* To expand its model lineup to up to 25 models, which is twice the current level. * To enter into new segments, such as the SUV (in early 2015), compact SUV, MPV and light commercial vehicles. * To introduce new technologies, such as the AMT and infotainment system.|
(Note) Maruti Suzuki is paying approximately 6% of its sales to Suzuki as royalty. However, it is reported that the rate of royalty is being decreased as development operations increase in India and the currency of the payment will be changed from Japanese yen to Indian rupee.
Gujarat plant construction project subject to vote for approval in November 2014
|Announces Gujarat plant construction project (January 2014)||Suzuki announced in January 2014 that it will establish a wholly-owned automobile production company "Suzuki Motor Gujarat Private Limited (SMG)" (tentative name) in the Gujarat state in the western India, and start production in 2017. SMG will enter into a contract manufacturing agreement (see below) with Maruti Suzuki. Maruti Suzuki will sell the automobiles that are produced at SMG. The initial production capacity is expected to be 100,000 units. The production volume will be increased in stages. Maruti Suzuki has plants in Gurgaon and Manesar with a combined annual production capacity of 1.5 million units. However, there is no room for further expansion. The new plant will be built in preparation for the growth of the Indian market as well as the expansion of export.|
|The new company was initially scheduled to be established in April. However, Maruti Suzuki's minority shareholders opposed the project, saying that it will not benefit Maruti Suzuki. Maruti Suzuki proposed some concession plans. Maruti Suzuki will hold a shareholder voting to determine whether or not to approve the project. It is also reported that the operation of the new plant will be postponed by a year in light of the sluggish market conditions.|
Outline of Gujarat plant and Maruti Suzuki's contract manufacturing agreement (as of June 2014)
|SMG's production volume and price||* SMG's products will be sold exclusively to Maruti Suzuki. The production volume will be determined by Maruti Suzuki every year. * SMG shall expand its production capacity in consultation with Maruti Suzuki. * The price at which the products will be supplied to Maruti Suzuki will be adjusted to a "no-profit no-loss" level every year.|
|Benefits to Maruti Suzuki||Maruti Suzuki will save the investment required for expanding the manufacturing capacity. Total investment by SMG would be about INR 185 billion. This will be financed by equity from Suzuki and accumulated depreciation.|
|Maruti Suzuki could earn about INR 105 billion during the initial 15-year period of the agreement. The earnings could apply to the investment in its own marketing businesses, etc.|
Unit sales in April to June 2014 increased by 12.6% to 300,000 units in India
Unit sales of Suzuki's Indian consolidated subsidiary, Maruti Suzuki, for FY 2013 (the year ended in March 31, 2014), including exports, declined by 1.4% y/y to 1.16 million units due to the slump in exports. Its revenue slightly increased to INR 426.4 billion and net income increased by 16.3% to INR 27.8 billion. Suzuki's business results improved due to a slight increase in sales in Japan, depreciation of the rupee and increased local procurement in India despite of the decline in the unit sales.
The Indian automotive market had been stagnating due to the slow economy and the effects of the high-interest rate policy that was taken in the past two to three years to suppress the price increase. However, the market is now recovering, owing to the extension of automotive tax breaks in April 2014 and expectations for economic recovery after the change of the government in May. Maruti Suzuki's business results for the April to June period also recovered and its overall unit sales increased by 12.6% y/y to 300,000 units, revenue increased by 7.1% to INR 120.8 billion and net income increased by 20.7% to INR 7.6 billion.
Maruti Suzuki's business results
|(Units, 1 million rupees)|
|FY2007||FY2008||FY2009||FY2010||FY2011||FY2012||FY2013||Apr.-Jun. 2013||Apr.-Jun. 2014|
|Net profit ratio||9.7%||6.0%||8.6%||6.4%||4.7%||5.6%||6.5%||5.6%||6.3%|
Source; Maruti Suzuki Financial Reports (Note) The exchange rate of the Indian rupee against the Japanese yen is 1.79 yen as of late September 2014.
Global strategic models: Celerio small car, Wagon R, Alivio midsize sedan
Celerio: small cars planned to be built in India and Thailand and distributed globally
|India||Launched in February 2014. It is a five-door hatchback model equipped with a newly developed AMT Auto Gear Shift. It comes with an improved 1.0L engine and lightweight body, and features a fuel efficiency of 23.1km/L. The vehicle length is 3,600mm, width is 1,600mm and height is 1,560mm. A CNG model was launched in May 2014.|
|Thailand||Launched in May 2014. The model is equipped with a 1.0L engine and supports the "E20" that combines ewith 20% of gasoline. The Thai Celerio is available with a MT or CVT. This model will become the second eco-car model that is approved by the Thai government, following the Swift.|
|Europe||The Celerio for the European market is planned to be produced in Thailand, starting in late 2014. This model will also be equipped with an AMT Auto Gear Shift, and launched as the successor model of the "A Star" that is exported from India. The model features a low CO2 emissions of 85g/km.|
|Indonesia||The model was displayed as a reference exhibit at the Indonesian International Motor Show that was held in September 2014.|
|All-new compact Celerio (Delhi Auto Expo 2014)||AMT Auto Gear Shift (Delhi Auto Expo 2014)|
|Indonesia||Suzuki launched the "Karimun Wagon R" that suits the Indonesian government's Low Cost Green Car (LCGC) policy in November 2013. The length of the engine room of the model was stretched by 205mm when compared to the Japanese Wagon R to install a 1.0L engine. The model was produced at its Tambun plant. Accumulated sales until May 2014 were 13,702 units.|
|Pakistan||Suzuki announced in April 2014 that it would start exporting the "Karimun Wagon R" that is produced in Indonesia to Pakistan. In Pakistan, the import duties levied on Complete Built Up (CBU) cars are high. Therefore, the company will export the products as complete knock down (CKD) kits. It plans to export 1,200 unit per month and 20,000 units per year.|
Midsize sedans developed for Asia: Alivio & Ciaz
|Alivio||A midsize sedan developed for the Asian market that is based on the concept car "AUTHENTICS," which was unveiled at the Shanghai Motor Show 2013. The company plans to distribute the Alivio mainly in China and launch the model by the end of 2014 if all goes smoothly. The model will be produced by Changan Suzuki Automobile. The vehicle length is 4,545mm, width is 1,730mm, height is 1,475mm and wheelbase is 2,650mm. For the powertrain, a highly-efficient engine "G-INNOTEC" will be paired with a six-speed AT.|
|Ciaz||This is a midsize sedan for which Maruti Suzuki started to accept reservations, starting in September 2014. It is an Indian version of the Alivio. This model will be equipped with a 1.4L diesel engine or 1.3L gasoline engine. For fuel economy performance, the diesel model delivers the best fuel efficiency of 26.21km/L while the gasoline model offers 20.73km/L. the gasoline version offers a class-leading fuel-efficiency.|
|Alivio concept in Beijing Auto Show 2014||CIAZ concept in Delhi Auto Expo 2014|
SX4 S-CROSS: C-segment crossover
|Hungary||Suzuki began producing a C-segment crossover of the SX-4 S-CROSS at the Hungary plant in September 2013. This model is equipped with a 1.6L gasoline or diesel engine and its new all-wheel drive (AWD) system, ALLGRIP. The model will be exported not only to Europe but also to the Oceania, Asia, the Middle East and Latin America as a strategic global model.|
|China||In China, the company began producing Chinese models at the Chongqing plant of Changan Suzuki, starting in December 2013.|
New Vitara SUV
|The new Vitara SUV is a mass-market model that was developed based on the concept car, iV-4, which was exhibited at the 2013 Frankfurt Motor Show. The model will debut at the Paris Motor Show to be held in October 2014.|
Japanese market: Sales for 2013 reaches record high of 728,000 units
Suzuki's unit sales in Japan for FY 2013 posted a record high of 728,000 units, which is an increase of 8.3% y/y. Major factors behind this increase includes last minute surge in demand before the consumption tax hike in addition to the launch of new models, such as the Spacia, Carry, Hustler, etc.
The unit sales for FY 2014 are expected to decline by 7.3% to 675,000 units due to a decrease in demand, following the spike in demand. The unit sales for the first quarter (from April to June) of FY 2014 increased by 10.2% y/y to 184,000 units as there were unfilled orders.
Suzuki has been vigorously making efforts to strengthen its products, such as improving fuel efficiency and adding safety equipment, without being bound by the timeline of redesgns. In August 2014, the company partially improved the Wagon R and launched a model with a mild hybrid system. Suzuki is also planning to launch the next-generation Alto Eco, using the next-generation lightweight platform within 2014.
Suzuki's new vehicle sales in Japan
|FY2006||FY2007||FY2008||FY2009||FY2010||FY2011||FY2012||FY2013||FY2014||Apr.-Jun. FY2013||Apr.-Jun. FY2014|
Source; Suzuki's financial results.
Suzuki： Launch of new models in the Japanese market
|Model||Year of launch||Outline|
|Alto Eco||Nov. 2013||Partially redesigned. In addition to the enecharge, new start-stop system, an improved engine and powertrain systems were installed on the model. As a result, the fuel efficiency of the model has been increased from 33.0km/L to 35.0km/L (on JC08 mode).|
|Within 2014||The model will be fully redesigned within 2014. Suzuki's new lightweight platform will be adopted on the model. The fuel efficiency performance of the model is expected to significantly exceed that of the Daihatsu Mira e:S, which is 35.2km/L.|
|Wagon R||Jul. 2013||Facelifted. The friction resistance of the engine, etc. was improved to increase the fuel efficiency performance from the conventional 28.8km/L to 30.0km/L. The model was also equipped with safety equipment, such as the collision mitigation brake system, unintended start-off prevention function, etc.|
|Aug. 2014||Facelifted by adding a model with a newly developed mild hybrid system "S-enecharge" to further increase the fuel efficiency to up to 32.4km/L.|
|Hustler||Dec. 2013||The first mini crossover. This model enjoys strong sales. The monthly sales target was 5,000 units. However, the sales reached 64,000 units in just eight months after its release. This model was exhibited at the Indonesian International Motor Show that was held in September 2014.|
|Carry||Aug. 2013||The light truck was fully redesigned for the first time in 14 years. By adopting a new type engine and reducing the weight by about 50kg, the model with a 2WD and 5MT delivers a fuel efficiency of 18.6km/L. Its riding has also been made more comfortable.|
|Aug. 2014||Added a model equipped with an AMT "Auto Gear Shift" that automatically operates the clutch and gearshift on the five-speed manual transmission. Its fuel efficiency is 19.4km/L (2WD).|
Global sales expected to reach record high of 2.76 million units in FY 2014
The overseas unit sales in FY 2013 slightly declined to 1.98 million units. In India, sales were steady and slightly increased to1.05 million units despite the shrinking market. The combined sales in Japan and overseas for FY 2013 reached 2.71 million units, which is a record high in Suzuki's history.
The company's unit sales for FY 2014 are expected to renew its record high to 2.76 million units, which is an increase of 1.7%. The sales in Japan are estimated to decline under the influence of a fall in demand, following the demand surge ahead of the consumption tax hike. Meanwhile, sales in Asia, centering in India, is expected to increase by 5.8% y/y to 1.69 million units.
The production volume in FY 2013 decreased in Japan. The company's combined production volume declined by 0.7% to 2.86 million units. The rate of overseas production slightly increased to 65%.
The production volume in FY 2014 is expected to decline in Japan due to a decrease in volume for the Japanese market as well as for exports. The volume for the overseas market, centering in Asia, is expected to increase by 2.7% y/y to 2.93 million units, renewing a record high for the first time in two years. The rate of overseas production is expected to increase to 66%.
Suzuki's new vehicle sales by region
|FY2010||FY2011||FY2012||FY2013||FY2014 (Plan)||Apr.-Jun. FY2013||Apr.-Jun. FY2014|
|Source; Suzuki's financial results.|
|(Note) 1.||The figures show the sales volume of Suzuki brand vehicles (including some licensed vehicles). The plan for FY 2014 was announced in May 2014.|
|2.||Overseas sales for FY ended March 2013 include some estimates.|
Suzuki's production volume
|FY 2006||FY 2007||FY 2008||FY 2009||FY 2010||FY 2011||FY 2012||FY 2013||FY 2014 (Plan)||Apr.- Jun. FY 2013||Apr.- Jun. FY 2014|
|Vehicles under OEM agreement||134||134||139||138||159||181||182||131||157||25||37|
Source; Suzuki's financial results. (Note) Production in Japan consists of the figures of completed vehicles and CKD units. Overseas production represents the number of vehicles leaving the production lines in the countries outside of Japan and does not include units assembled on a knock-down basis.
Aiming at record-high operating profit of JPY 188 billion in FY 2014
Suzuki's consolidated financial results in FY 2013 were as follows. Revenue in Japan increased by 8.8% y/y while overseas revenue increased by 17.4%. Consolidated revenue increased by 14% to JPY 2.94 trillion. Operating profit increased by 29.9% to a record high of JPY 187.7 billion. With this revenue of JPY 2.94 trillion and ordinary profit margin of 6.7%, the company almost achieved its mid-term goals (revenue of JPY 3 trillion and ordinary profit margin of 6%), which was scheduled to be achieved by FY 2014. Its automobile sales in Japan and the effect of changes in the foreign exchange rate contributed to these results.
In its forecast of consolidated financial results for FY 2014, the company aims to slightly increase its revenue to JPY 3 trillion and slightly exceed its record-high operating profit to JPY 188 billion, expecting a fall in demand following the demand spike due to the tax hike in Japan.
Suzuki's consolidated business results
|(JPY 1 million)|
|FY2008||FY2009||FY2010||FY2011||FY2012||FY2013||FY2014 (Plan)||Apr.-Jun. FY2013||Apr.-Jun. FY2014|
|R & D costs||115,000||108,800||104,100||109,800||119,300||127,100||130,000||25,200||28,000|
Source; Suzuki's financial results. (Note) The plan for FY 2014 was announced in May 2014.
Production Forecast by LMC Automotive: Suzuki's production will be 3.1 million units in 2017
|(LMC Automotive、August 2014)|
According to LMC Automotive's latest forecast (July 2014), Suzuki's light vehicle production is expected to be 2.69 million units in 2014, up by 5.0 % from 2013.
In India, its largest market, Suzuki will produce 1.25 million units in 2014 up by 6.3%, while Japanese production will be 875,000 units up by 3.9%. Suzuki's expansion at its home base was driven by domestic sales growth, which was partly bolstered by the additional volume of the Hustler Mini car that hit the market this past January.
Meanwhile, production in Thailand is projected to increase after the rollout of the Celerio. Production for exports to Europe is also scheduled to start by July.
As for the medium- and long-term outlook, Suzuki's light vehicle production will reach 3.14 million units in 2017, up by 22.5 % from 2013. Given the continued expansion of the Indian market and Maruti Suzuki's strong position, the production will be expected to reach 1.63 million units in 2017, up by 39.0% from 2013. India would further raise its profile to account for more than 50% of Suzuki's total output by 2017. The global research company mentions "Such an over-reliance on a single market is not ideal, but Suzuki has few options to significantly expand volumes in other markets because of its line-up of mostly small cars".
Suzuki light vehicle production forecast by country
|Source: Global Automotive Production Forecast (August 2014)|
|(Note) 1.||Data indicates figures of only small-size vehicles, including passenger cars and light commercial vehicles with gross vehicle weight of under six tons.|
|2.||All rights reserved. Reproduction of any data will require permission by LMC Automotive.|
|3.||For more information or inquiries of forecast data, please contact LMC Automotive.|
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