Suzuki: Expands India business, maintains 50% share of passenger car market

Strengthens partnership with Toyota, advances introduction of electrified models

2018/09/06

Summary

 Suzuki’s global sales volume in FY 2017 (April 2017 to March 2018) was up by 10.5% to 3.224 million units compared to the previous fiscal year, exceeding 3 million units for the first time. Of this, 1.645 million units were sold in the India market, accounting for 51.3% of Suzuki’s total sales volume. Although its consolidated financial results showed a significant increase in both sales and profitability, going forward Suzuki is forecasting a decrease in profitability as a result of unfavorable exchange rate fluctuations and increased R&D expenditures as it continues to focus on expanding its market share in the passenger car segment in FY 2018.

 In its primary market of India, Maruti Suzuki’s Gujarat plant became operational in February 2017 was already operating at full capacity with 2 shifts (annual production capacity of 250k units) by October of the same year. Maruti Suzuki is currently working to have a second production line operational (250k unit capacity) by January 2019, and is planning for a future third production line (250k unit capacity). Suzuki is also proceeding with its plans to construct its parts procurement system within the state of Gujarat. A new lithium-ion battery plant (which would be India’s first) established by a joint venture between Denso and Toshiba will be located in the supplier’s park adjacent to the Gujarat plant and is expected to supply battery packs to Suzuki’s manufacturing subsidiaries in India.

 In June 2018, Suzuki indicated its sales target of 5 million units per year in the Indian market by 2030, and intends to maintain its current 50% share of the passenger car market. Suzuki’s plans call for doubling its current product lineup from 16 models to 30 models, with EVs accounting for 1.5 million or 30% of those 5 million units.

 Since the announcement of its business partnership with Toyota in October 2016, Suzuki has agreed on the mutual supply of HVs and EVs for the India market. Recently the two companies have started discussions on joint projects such as the development of new powertrain technologies and the development of vehicles for the African market, which will further strengthen their partnership.

 With respect to vehicle electrification, Suzuki will gradually introduce its original hybrid systems on its flagship models, combining its ISG (Integrated Starter Generator, a generator with motor function) and a small 12V Li-ion battery, which is scheduled to be adopted for its electrified powertrains on all models to be sold in Japan in the future. Conversely, Suzuki is advancing the development of hybrid powertrain systems using 48V system technology for European applications.

Suzuki new vehicle sales volumle New Swift
Source: Reference materials on Financial Results issued by Suzuki
Exceeding 3 million units in FY 2017. Sales volume in India accounting for over 50% of the total.
New Swift (Bangkok International Motor Show 2018)
Launched as a full model change in 2017. Produced and exported from Japan, India, and Thailand as a global model aimed at expanding sales in various countries and regions.

 

Related reports:
Review of Electric Vehicles and the EV Ecosystem in India (Aug. 2018)
India: Vehicle sales grow to 3.76 million units; electrified vehicle adoption policy introduced (Mar. 2018)
Indian Auto Expo 2018: Exhibitions from Maruti Suzuki, Hyundai/Kia, Honda, and Toyota (Feb. 2018)
Suzuki’s Indian operations: Production capacity to expand to 2.25 million vehicles (Jul. 2017)

 



Performance: Global sales volume exceeds 3 million units, maintains over 50% share of India market

 Suzuki’s consolidated net sales for FY 2017 (April 2017 to March 2018) increased by 18.5% to JPY 3,757.2 billion compared to the previous fiscal year, with operating income increasing by 40.3% to JPY 374.2 billion reflecting significant sales and profit growth. Consequently, net sales of its automobile business increased by 18.7% to JPY 3,435.8 billion year-on-year (y/y) and operating income increased by 39.2% to JPY 355.1 billion y/y.

 Global sales volumes for FY 2017 (April 2017 to March 2018) increased by 10.5% to 3.224 million units compared to the previous fiscal year, marking the company’s first year to exceed over 3 million units in annual sales. Of this volume, India sales increased by 14.5% to 1.645 million units, accounting for 51.3% of the total. Japan domestic sales increased by 4.5% to 668,000 units, European sales increased by 14.9% to 281,000 units.
 Geographically, Asia, Japan, Europe and Other regions generated increased sales profitability and growth. In the Japan domestic market, sales growth increased as a result of the Wagon R and Swift that were launched in the previous fiscal year, and new models such as the Spacia and XBEE that launched in December. Overseas sales exceeded that of the previous fiscal year, beginning with the launch of the new Dzire and Swift in India, and increased sales in Europe.

 For consolidated results in FY 2018 (April 2018 to March 2019), the company is forecasting to achieve an increase in net sales by 1.1% to JPY 3,800 billion and expecting operating income to decrease by 9.1% to JPY 340 billion. While it is expected that sales will continue increase, particularly in India, a strong yen and further increases in R&D expenses are expected that will likely result in increased revenue but at lower profitability. A 6% increase in sales volume is expected in India for the full business year. R&D funding is to be allocated to the strengthening of next-generation technologies such as electrification and autonomous driving, with a record JPY 160 billion (14.8% increase compared to the previous fiscal year) planned for investment.

 The consolidated financial balance sheet for the first quarter of FY 2018 (April to June 2018) reflected solid sales and profit growth, recording record high net sales and profitability in every category compared to the same quarter in the previous fiscal year. Global sales of its automobile business increased by 16.3% to 862,000 units compared to the same quarter y/y, with the company’s largest market of India showing an increase of 25.9% to 464,000 units, while the Japan domestic market posted a sales increase of 8.5% to 173,000 units. While showing a strong start for the first quarter, the company is deferring to speculate on its profit outlook for the full year as a result of planned investments in India and the development of technologies such as electrification.

 

Suzuki Motor Co., Ltd. Consolidated Financial Summary

(JPY 100 millions)

FY 2014  FY 2015  FY 2016  FY 2017  FY 2018  FY 2019
forecasts
2017
Apr-Jun
2018
Apr-Jun
Total net sales 29,383 30,155 31,807 31,695 37,572 38,000 8,693 9,875
Net sales Japan 11,327 10,946 10,479 10,375 11,167 11,100 2,669 2,963
Net sales overseas 18,056 19,209 21,328 21,320 26,405 26,900 6,024 6,912
Operating income 1,877 1,794 1,953 2,667 3,742 3,400 851 1,165
Ordinary income 1,978 1,943 2,091 2,867 3,828 3,500 995 1,331
Net income 1,075 969 1,167 1,600 2,157 2,050 654 859
Capital expenditure 2,136 1,945 1,715 1,988 2,134 2,500 417 780
Depreciation expenses 1,172 1,344 1,683 1,634 1,509 1,500 402 327
R&D expenses 1,271 1,259 1,310 1,315 1,394 1,600 300 317
U.S. Dollar (JPY) 100 110 120 108 111 105 111 109
Euro (JPY) 134 139 133 119 130 130 122 130
Indian Rupee (JPY) 1.68 1.81 1.85 1.63 1.73 1.65 1.74 1.64

Source: Reference materials on the FY 2018 Financial Results issued by Suzuki Motor Co., Ltd.

 

Suzuki's new vehicle sales by region

(1,000 units)

  FY 2014  FY 2015  FY 2016  FY 2017  FY 2018  FY 2019
forecasts
2017
Apr-Jun
2018
Apr-Jun
Japan 728 756 630 639 668 675 160 173
Europe 205 195 207 245 281 280 70 74
Asia India 1,054 1,171 1,305 1,445 1,654 +6% 368 464
China 232 253 186 148 105 n.a. 29 18
Indonesia 165 148 120 92 114 n.a. 26 28
Thailand 40 20 21 23 26 n.a. 5 8
Others 105 129 209 162 194 n.a. 42 52
Sub-total 1,596 1,721 1,842 1,870 2,093 2,157 470 570
Others 181 196 183 164 182 187 41 45
Total 2,709 2,867 2,861 2,918 3,224 3,299 741 862

Source: Reference materials on the FY 2018 Financial Results issued by Suzuki Motor Co., Ltd.



Business partnership with Toyota: Promoting electrification in India, mutual supply of vehicles

 After announcing in October 2016 to start exploring a business partnership with Toyota, Suzuki reached agreements to mutually supply of EVs and HVs in the Indian market. Recently, the two companies have also begun discussing joint projects regarding development of the African market and powertrain technologies, further strengthening their partnership.

Date of announcement and title Details of partnership
October 12, 2016
Suzuki and Toyota to Explore Business Partnership
With its primary focus on mini-vehicles, Suzuki has been consistently refining its technologies to develop vehicles with high price competitiveness. However, in the face of the advanced and future R&D field, Suzuki is increasingly feeling a sense of uncertainty. On the other hand, although Toyota has been working on R&D in the environment, safety, and information technology fields, the company is conscious of the fact that it may be behind competitors in North America and Europe when it comes to the establishment of standardizations, and partnerships with other companies.
February 6, 2017
Toyota and Suzuki Conclude Memorandum toward Business Partnership
Toyota Motor Corporation and Suzuki Motor Corporation, with an aim to jointly contribute to the resolution of social issues and achievement of sound and the sustainable development of an automobile-based society, concluded a memorandum today on beginning concrete examinations for business partnership. The companies agreed today to begin concrete examinations toward the realization of business partnership in areas including environmental technologies, safety technologies, information technologies, and the mutual supply of products and components.
November 17, 2017
Toyota and Suzuki Conclude Memorandum on EV Introduction in India
Toyota Motor Corporation and Suzuki Motor Corporation have concluded a memorandum of understanding (MOU) on moving forward in considering a cooperative structure for introducing electric vehicles (EVs) in the Indian market around 2020. Specifically, Suzuki is to produce EVs for the Indian market and will supply some to Toyota, while Toyota is to provide technical support. Additionally, Toyota and Suzuki intend to conduct a comprehensive study of activities for the widespread acceptance and popular use of EVs in India
March 29, 2018
Toyota and Suzuki Reach Basic Agreement toward Mutual Supply of Hybrid and Other Vehicles in India
Toyota Motor Corporation and Suzuki Motor Corporation have concluded a basic agreement toward the mutual supply of hybrid and other vehicles between the two companies for the Indian market. While bolstering the two companies’ product lineup, the aim of the agreement is to invigorate their competitiveness in the Indian automotive market. Specifically, Suzuki will supply the Baleno and Vitara Brezza vehicle models to Toyota, while Toyota will supply the Corolla vehicle model to Suzuki. The vehicles will be sold through the sales networks of the respective subsidiaries of Toyota and Suzuki based in India.
May 25, 2018
Toyota and Suzuki Agree to Start Discussing Joint Projects for Technological Development, Vehicle Production, and Market Development
Toyota Motor Corporation and Suzuki Motor Corporation have agreed to start discussing new joint projects in the fields of technological development, vehicle production, and market development.
1) Denso Corporation and Toyota will provide Suzuki with technological support for a compact, ultrahigh-efficiency powertrain to be developed by Suzuki.
2) Toyota Kirloskar Motor Private Ltd. (TKM) will produce models developed by Suzuki for sale in India through each of the Toyota and Suzuki brand networks.
3) Supply of models developed by Suzuki, including those to be produced by TKM (as mentioned above), from India to African and other markets by Toyota and Suzuki, will be sold by both the Toyota and Suzuki sales networks, advancing cooperation in the domains of logistics and services.

Source: Suzuki and Toyota news releases



India business: Gujarat plant expansion, aiming to sell 5 million units per year by 2030

 According to data from the Society of Indian Automobile Manufacturers (SIAM), Suzuki manufactured approximately 1.781 million units in India in FY 2017. Suzuki sold 1.645 million units within India and exported 126,000 units to more than 100 countries in regions such as Europe, Japan, Asia, Africa and Central South America. Suzuki’s market share in the India passenger car segment is over 50%.

 Maruti Suzuki’s capital investment in FY 2017 reached INR 34 billion (approximately JPY 56 billion) and is planning to invest INR 50 billion (82 billion yen) in FY 2019. The majority of the investment funding will be allocated to the launch of new car models, as well as investment in engine plants to increased vehicle production capacity and investment in R&D facilities.

Maruti Suzuki's domestic production and sales Passenger Vehicles market share in India
Source: Created based on SIAM documents
Note: Each FY shows an aggregated value from April to March.
Source: Created based on SIAM documents
Note: Passenger Vehicles (PVs) market share, which includes passenger cars, utility vehicles (UVs), and vans.

 

Consolidating production at the Gujarat plant

 Suzuki has three vehicle production sites in India, namely the Maruti Suzuki Gurgaon Plant, the Manesar Plant and the Gujarat plant of Suzuki Gujarat Private Limited (SMG), a 100% Suzuki wholly-owned manufacturing subsidiary. The combined capacity of the Gurgaon and Manesar plants totals 1.5 million units annually.

 The Gujarat plant started operations in February 2017 and reached full capacity with 2 shifts (250,000 units/year) from October of the same year, producing the Baleno and Swift models at a pace of 20,000 units per month. In April 2018, Suzuki stated exports of the all-new Swift produced at the Gujarat plant. The cars are shipped from the port of Mumbai to South Africa. The second assembly line (capacity of 250,000 units/year) will become operational by January of 2019, and a third assembly line (capacity 250,000 units/year) is planned in the future.

 Suzuki established a supplier park for large components located adjacent to the Gujarat plant, where a seat manufacturer has already started production, and a metal stamping supplier is expected to locate soon. For other suppliers, the optimum production and supply system is being studied to establish its new procurement system. The procurement rate of parts produced in the state of Gujarat remains at about 15% but is expected to expand to 60-70% within the next few years.

 

Suzuki and Denso set up India’s first Li-ion battery plant

 In April 2017, the three companies Suzuki, Toshiba, and Denso reached a basic agreement, signing a contract to establish a joint venture to produce automotive lithium-ion battery packs in India. The joint venture has a capital investment of approximately JPY 2 billion, of which Suzuki holds a 50% stake, with Toshiba at 40%, and Denso 10%. The initial capital investment is approximately JPY 20 billion.

 The lithium-ion battery plant, the first in India, will be built at the supplier’s park adjacent to the Suzuki Gujarat plant, and is planned to start operations in 2020. The battery packs are planned to be supplied to Suzuki’s manufacturing subsidiaries.

 

Building 4 sales networks: Premium class cars, passenger cars, commercial vehicles, and used cars

 Maruti Suzuki is in the process of establishing 4 sales networks for premium cars (NEXA), standard passenger cars (ARENA), commercial vehicles (Commercial) and used cars (True Value). By the end of March 2018, its sales network had 2,627 locations (excluding the used cars network).

 At the end of August 2017, Maruti Suzuki announced its plans to renovate its entire passenger car sales network in India as ARENA. This includes the renewal of more than 80 sales locations by 2018. ARENA’s showroom has adopted a blue tone for its signboards and brand designs. Customers can confirm the product lineup on a touchscreen display, with its sales staff using digital media such as tablets aiming to achieve a closer interactive sales experience with customers.

 The premium car sales network NEXA will gradually increase the number of its dealerships, with plans to reach 300 dealerships by 2020. At the end of July 2017, the company had established 250 dealerships nationwide, selling 5 models, the S-Cross, Baleno, RS Baleno, Ciaz, and the Ignis.

 In July 2018, Maruti Suzuki began offering the telematics service “Suzuki Connect” to NEXA customers. The service utilizes a Telematics Control Unit (TCU) that connects to the central server of the NEXA Customer Care center via a smartphone network. The system aims to improve user convenience with services such as emergency alerts, vehicle tracking, vehicle state monitoring, and preventive maintenance inspection notifications.

 The company announced its direction to reinforce its used car business by August 2018. In India, along with the increase in new car sales, the demand for used cars is also increasing. So, the company plans to consolidate the sales of high quality used cars to lead to the establishment of the value chain and improve customer retention. Although Suzuki already has roughly 500 used cars dealerships in India at both new car and used car dealerships, it will establish 150 new dealerships dedicated to the sale of certified used cars by March 2018.

 Furthermore, it will renovate its certified used car system. In its new certification system “True Value 2.0” the system certifies the quality of cars that are less than 7 years old from its first registration or with a mileage of less than 100,000 km. The cars are also limited to two ownership vehicles that are not used for commercial purposes or have been retrofitted with CNG or LPG kits. The number of inspection items also has been increased, covering 376 items relating to areas such as the engine, brakes, suspension, steering, and interior.

 

Suzuki aims to sell 5 million units annually in India by 2030

 Suzuki Chairman Osamu Suzuki indicated in June 2018 during the general shareholders meeting his intention to target 5 million units in annual sales in India by 2030. The concept includes increasing the global annual sales volume to 7 million units by 2030 including Japan and other regions. Suzuki will proceed with formulating business plans to expand its production scale in the future.

 With an annual growth rate of 9% in India, Suzuki intends to maintain its current 50% share of the passenger car market based on the assumption that the market size will reach 10 million units in 2030. The product lineup will increase from the current 16 models to more than 30 models, including the launch of electric vehicles (EVs), hybrid vehicles (HVs), and compressed natural gas (CNG) vehicles, of which 1.5 million units comprising 30% of the total 5 million units are expected to be EVs. With an outlook of 5 million units in annual sales, Suzuki’s strategy is to increase the current sales outlets by four-fold expanding to 10,000 outlets, expand its sales staff by three-fold to 120,000 employees, increase its service staff to more than three-fold to 100,000 employees, and build 11 new production sites with a production capacity of 250,000 units annually each.

 Suzuki also plans to sell EVs in India by 2020. In the end of 2017, Maruti Suzuki Chairman R C Bhargava indicated the company plans to advance the development of its own charging station infrastructure in parallel with its launch of EVs in the Indian market.



Global production system: Reconsideration of China business, and development of the African market

China: Termination of joint venture with Changhe Automobile, and reconsideration of joint venture with Changan Automobile

 In June 2018, Suzuki completed the transfer of its entire equity holding in Jiangxi Changhe Suzuki Automobile Co., Ltd., an entity accounted for using the equity method in China, transferring the 46% held by the Suzuki Group to Changhe Automobile, terminating the joint venture. Changhe Suzuki was established in August 1994 as a joint venture company between Changhe Aero Industry Co., Okaya & Co., Ltd., and Suzuki. The company had been manufacturing and selling Suzuki-branded automobiles since June 1995. The management situation of Changhe Suzuki had been in critical financial condition because the company had been unable to achieve its sales targets in recent years. All equity in Okaya was also transferred to Changhe.

 Suzuki’s production volume in China has been trending downwards in recent years, with sales volumes in the January to July 2018 timeframe at 32,135 units, half of that compared to the previous year (Source: MarkLines production volume data). In the China market, increasing personal incomes generated high demand for SUVs and larger vehicles which put Suzuki at a competitive disadvantage because the company primarily focuses on compact cars. At the end of April 2018, Suzuki’s joint venture with Changan Automobile, Chongching Changan Suzuki released a statement that they will “continue to provide high quality products and services to consumers”. However, it has been repeatedly reported that Suzuki plans to terminate its joint venture with Changan Automobile, fueling speculations that Suzuki might exit the China market. Suzuki’s public relations department is declining to comment on the reports. (as of August 2018)
 Note: On September 4, 2018, Suzuki announced that it has agreed to transfer all equity in Chongqing Changan Suzuki Automobile Co., Ltd., an entity accounted for using equity method in China, held by Suzuki (50%) to Changan Automobile. The management of Changan Suzuki will be continued as 100% subsidiary of Changan Automobile. Suzuki will continue licensing of production and sales of Suzuki models to Changan Suzuki. (Added on September 5, 2018)

 

Africa: Plans to set up a new plant in Algeria

 In April 2017, Suzuki created a new Africa Project team within the Overseas Production Department of the Manufacturing Division when it was reorganized. In partnership with Toyota, Suzuki has also embarked on the development of the African market. Suzuki is producing KD (knock down) commercial vehicles in Egypt, but is not producing passenger cars in Africa. It has been reported that Suzuki entered into a joint venture with the local company Tahkout in Algeria to set up an assembly plant for small cars such as the Alto and Swift. Producing passenger cars in the new plant is viewed as a strategic move to develop the African market, which is expected to see increased market demand in the future.

 

Suzuki's light vehicle plants

Country Operating company Plant Annual production capacity Major models being produced Remark
Japan Suzuki Motor Corporation Kosai Plant 452,000 Wagon R,Spacia, Hustler, Alto, Alto Works, Alto Van, Lapin, Jimny (2018-), Jimny Sierra (2018-); engines Produce OEM supply model to Mazda.
Iwata Plant 337,000 Every, Every Wagon, Carry, Super Carry (2018-) Production of Jimny and Jimny Sierra was transferred to Kosai plant from 2018.
Production of Escudo 2.4 ended in 2017.
Produce OEM supply model to Mazda, Mitsubishi, and Nissan.
Sagara Plant 217,000 Solio, Solio Bandit, Swift, Swift Sport, Ignis, XBEE (2017-); engines and engine components  Produce OEM supply model to Mitsubishi.
India Maruti Suzuki India Ltd.  Gurgaon Plant 700,000 Alto 800, Ertiga, Ertiga Diesel Hybrid (2017-), Eeco, Wagon R, Omni (Every), Gypsy (Jimny), Estilo (MR Wagon based), S-Cross, Vitara Brezza, Super Carry, Ignis (2017-); K-Series petrol engines
Manesar Plant 800,000 Dzire, A-Star (Alto), Ciaz, Celerio, SX4, Baleno; transmissions, casting Production of Swift was transferred to Hansalpur plant in Gujarat State from 2017.
Suzuki Powertrain India Ltd. Manesar Plant n.a. Diesel engines, MT Annual production capacity of engines: 300,000 units
Suzuki Motor Gujarat Private Limited Hansalpur plant 250,000 Baleno (2017-), Swift (2017-); engines, transmissions (planning) Started operations in February 2017. The second assembly line (capacity of 250,000 units/year) will become operational by January of 2019, and a third assembly line (capacity 250,000 units/year) is planned in the future.
Pakistan Pak Suzuki Motor Co., Ltd. Karachi Plant 170,000 Wagon R, Swift, Liana, Cultus, Bolan van, Cargo van, Ravi pickup, Mehran (-2019 planning), Alto 660cc (2019- planning)
Indonesia PT Suzuki Indomobil Motor Tambun Plant 133,000 Carry, Mega Carry, Karimun Wagon R, APV, APV Arena; components, seats
Cikarang Plant 120,000 Ertiga, Karimun Wagon R (planning); engines, transmissions Annual production capacity of powertrains:
Engines 71,000 units, AT 176,000 units
Cakung Plant n.a. Engines and transmission parts Annual production capacity of engines: 80,000 units
Thailand Suzuki Motor (Thailand) Co., Ltd. Rayong Plant 100,000 Swift, Celerio, Ciaz, New Swift (2018-); seats
Vietnam Vietnam Suzuki Corp. Long Binh Plant 5,000 Carry, Swift
China Jiangxi Changhe Suzuki Automobile Co., Ltd. Jingdezhen Plant 170,000 Beidouxing X5 (Wagon R based), Beidouxing (Wagon R based) Terminated the joint venture in June 2018.
Jiujiang Branch 100,000 Liana A6, Liana, Splash Continue production of Changhe models.
Chongqing Changan Suzuki Automobile Co., Ltd. First Plant
(Dajiang Industrial Park)
180,000 Tianyu SX4, Tianyu Shangyue, Swift, New Alto, Cultus; engines
Second Plant
(Tianming Automobile & Motorcycle Industrial Park)
100,000 S-CROSS, Alivio, Vitara, New S-CROSS (2017-) Changan Automobile's New Benni has been produced since March 2015.
Hungary Magyar Suzuki Kft. Esztergom Plant 210,000 SX4 S-Cross, Vitara/Escudo Production of Swift and Swift Sport ended in 2017.
Egypt Suzuki Egypt S.A.E. Giza Plant 13,000 Carry, Carry Van Other models like Swift are imported by CBU.
Brazil HPE Automotores do Brasil Ltda. Catalao Plant n.a. Jimny Manufactures and sells Mitsubishi and Suzuki vehicles. Annual production capacity: 100,000 units
Ecuador Omnibus BB Transportes S.A. Quito Plant n.a. Grand Vitara, Vitara GM’s JV plant, producing Chevrolet and Suzuki models. Annual production capacity: 29,000 units

Source: MarkLines OEM Plants data based on the figures released on the company's official website or media coverage.



Electrification: Sequential introduction of hybrid systems for new cars

 Suzuki has introduced electrification technologies on its flagship models using a combination of a 12V small lithium-ion battery and an ISG (Integrated Starter Generator, generator with motor function) which exhibits excellent power generation efficiency. In addition to releasing mild hybrid variants of the Swift, Solio, and Ignis, in February 2017 Suzuki launched the Wagon R equipped with a large capacity battery and capable of creep mode driving with only the motor. In the Hustler model, the S-eNe Charge mild hybrid system is equipped to provide engine torque assist. Furthermore, after its implementation in Solio, Suzuki equipped the Swift with a hybrid system that combines the MGU (Motor Generator Unit, the drive motor) with the AGS (Auto Gear Shift). As a result, it is now possible to drive in EV mode with torque assist when shifting gears.

 Suzuki’s strategic direction is to expand the deployment of electric vehicles for the Japanese domestic market by sequentially introducing electric powertrains during full model change launches, even for current models without EV options. While the Kei-cars sold domestically are comprised of 12V mild hybrid systems, Suzuki is developing a hybrid system based on 48V drive power supply technology.

 

Suzuki's hybrid systems

Hybrid system System overview
Hybrid The system realizes the powerful driving performance and excellent fuel efficiency of a full hybrid (strong hybrid) by mating the MGU (Motor Generator Unit) and the AGS (Auto Gear Shift) to Suzuki’s Dual Jet engine. In addition to EV drive with the MGU only, when the pedal is strongly pressed during accelerations, motor power is added to the engine output for a powerful assist. Two driving mode selections are available with the ECO mode switch: Standard Mode with a lively drive and acceleration feel, and the Eco Mode for more frequent EV driving.
Mild Hybrid By using the ISG (Integrated Starter Generator, generator with motor function) that has excellent power generation efficiency, power is generated using the energy from deceleration, charging the lead battery for idling stop as well as the dedicated lithium-ion battery. The power is utilized for driving motors during creep mode and motor assist to the engine during accelerations resulting in further improvements in fuel economy.
eNe CHARGE The system uses a high-efficiency lithium-ion battery, and the energy generated during deceleration is used for both power generation and charging. By using the stored energy for electrical components, gasoline consumption is reduced, contributing to improved fuel economy. Furthermore, by reducing the load to the engine, better driving performance is achieved.
S-eNe CHARGE By utilizing deceleration energy, power is generated with the ISG (generator with motor function) to charge the lead-acid battery specially designed for vehicles equipped with engine auto stop start system and lithium-ion battery specially designed for vehicles equipped with the S-eNe Charge mild hybrid system. By assisting the engine with a motor power during acceleration when more fuel is needed, improved fuel efficiency is realized. Also, because the starter motor of the ISG (a generator with a motor function) restarts the engine through a belt after the engine auto stop, it is free from gear engagement noise, so the restart of the engine is more silent and smooth.

Source: Suzuki homepage (Suzuki’s next generation technology, product lineup model specifications)

 

Suzuki’s hybrid vehicles (HV)

Model Launch Date Production Facility Overview
XBEE December 2017 Sagara plant Small cross-over HV exhibited in the 2017 Tokyo Motor Show. Equipped with a mild hybrid system.
Swift January 2017 Sagara plant The all-new Swift HV. Launched in January 2017 as a mild hybrid and in July with the full hybrid system.
Ignis 2016 Sagara plant Sub-compact crossover HV. Equipped with a mild hybrid system.
Solio 2015 Sagara plant Compact tall wagon HV. Mild hybrid version launched in August 2015 and the full hybrid model launched in November 2016.
Wagon R February 2017 Kosai plant A Kei-type tall wagon HV. Second generation of the Wagon-R HV. Equipped with a mild hybrid system.
Spacia May 2015 Kosai plant Kei-type wagon HV. Equipped with a mild hybrid system.
Hustler May 2015 Kosai plant Kei-type crossover HV. Equipped with the S-eNe Charge mild hybrid system.
Landy December 2016 Nissan’s Kyushu plant Landy is a Suzuki branded Nissan Serena S-Hybrid.
S-Cross September 2017 Gurgaon plant The S-Cross minor change model is equipped with the SHVS mild hybrid system.
Ertiga October 2015 Gurgaon plant The Ertiga minor change model is equipped with the SHVS mild hybrid system. Sold in India and Southeast Asia.
Baleno 2016 Manesar plant Exhibited in 2015 Frankfurt Motor Show and launched in the spring of 2016. Equipped with the SHVS mild hybrid system.
Ciaz September 2015 Manesar plant A compact sedan Ciaz equipped with the SHVS mild hybrid system. Sold in India.

Source: MarkLines Green Vehicles data
Note: The SHVS (Smart Hybrid Vehicle by Suzuki) is a mild hybrid system using ISG (generator with motor function) and a small lithium-ion battery. Used for auto start-stop systems, for engine assist during acceleration, and energy recuperation during deceleration.
In February 2018, it was reported that Suzuki applied for HV manufacturing investment incentives from the Thai government and is considering manufacturing HVs at the Rayong plant.

 

Suzuki's major electrified models

(Sales volume: units)

Model Segment EV/HV 2015 2016 2017 Top-selling country
Solio A HV 16,500 44,129 44,761 Japan only
Swift B HV - - 19,607 Japan, France, UK
Ignis SUV (Class B) HV - 24,304 14,110 Japan, France, UK
XBEE SUV (Class A) HV - - 1,586 Japan only
Landy MPV HV 732 343 1,036 Japan only
Baleno C HV - 71 537 France, UK

Source: MarkLines yearly sales figures by model

 



New models: Adoption of the HEARTECT platform and “Suzuki Safety Support” preventive safety technology

 Suzuki’s flagship models, the Swift and the Ertiga were launched as full model changes, and new models for compact crossover vehicles such as the XBEE are also being introduced. With respect to concept cars, Suzuki showcased the compact SUV “e-SURVIVOR” at the 2017 Tokyo Motor Show and the urban compact SUV “Concept FutureS” design at the 2018 India Auto Expo.

 In recently launched new models and full model changes, new platforms are gradually being introduced such as the HEARTECT that realizes high rigidity and weight reduction, and the new TECT for a lightweight impact-absorbing body, and the Suzuki Safety Support preventive safety technology. Furthermore, new models and minor change models for the Kei minicars such as the Spacia will be equipped with the same systems, improving the safety performance and features of Kei-type cars.

XBEE e-SURVIVOR Concept FutureS
XBEE
Compact crossover wagon exhibited at the 2017 Tokyo Motor Show. The model was launched for sale in December 2017.
e-SURVIVOR
The future compact SUV. Proposed for electrified 4WD vehicles.
Concept FutureS
Concept for future mobility based on FACE (Four-Wheel Drive, Autonomous, Connected, and Electric)

 

Suzuki introduces new models for small crossovers

XBEE A new genre of small crossover wagon fusing design elements of a wagon and SUV. Exhibited at the 2017 Tokyo Motor Show and launched for sale in December of 2017. Produced at the Sagara plant. The car is based on the HEARTECT platform with a 1.0L direct-injection turbo engine (K10C) combined with a mild hybrid system mated to a 6-speed AT. It also features Suzuki Safety Support preventive safety technology.
Celerio X The A-segment hatchback crossover based on the Celerio. Produced at the Maruti Suzuki Manesar plant and launched in India in December 2017. Equipped with 1.0L engine.

 

Full model change of flagship models

Swift The B-segment 5-door hatchback model. Launched as a full model change in 2017. Produced and exported from Japan, India, and Thailand as a global model aimed at expanding sales in various countries and regions.
The all-new Swift was launched in Japan in January 2017. Produced at the Sagara plant, and in addition to domestic sales, exported to Europe, Oceania, and Central and South America. The model adopts the HEARTECT platform, TECT lightwieght impact absorbing body structure, and Suzuki Safety Support. Available in three engine variations: 1.2L Dual Jet engine (K12C), the same engine with a mild hybrid system, and a 1.0L direct-injection turbo engine. In July 2017, the 1.2L engine with a full hybrid system combining a drive motor and AGS (Auto Gear Shift) was launched for sale.
The India-made model is the third-generation Swift produced at the Gujarat plant. In February 2018, it was exhibited at the India Auto Expo and launched for sale. The model features two engine variations, a 1.2L gasoline engine and a 1.3L turbo diesel engine, mated with a 5-speed MT and AGS (Auto Gear Shift).
The Thai-made model is the second-generation all-new Swift produced as a second-phase Eco-car Project certified model and launched in February 2018. It features the 1.2L Dualjet engine mated with a CVT.
Swift Sport The third generation Swift Sport made its world’s first public debut at the 2017 Frankfurt Motor Show. Produced at the Sagara plant, it was launched in Japan in September 2017, and subsequently in Europe in the spring of 2018. It is a sport model based on the new Swift, adopting the HEARTECT platform and equipped with the 1.4L direct-injection turbo (K14C) Booster Jet engine. High power and handling performance are realized with the newly developed suspension system.
Ertiga The Ertiga is a 3-row, 7-seat B-segment MPV. It was announced in April 2018 as a full model change vehicle in Indonesia where the MPV category is mainstream. It adopts the HEARTECT platform, and extending the body length by 130mm realizes a spacious cabin interior and expanded luggage space. The Ertiga is equipped with a 1.5L gasoline engine. Following Indonesia, the model was launched in India. The Ertiga has been manufactured and sold in both countries since 2012. The total sales volume is 680,000 units in over 70 countries in regions throughout the world (as of the end of February 2018).
Swift Sport 1.4L BoosterJet engine Spacia
Swift Sport 1.4L BoosterJet engine Spacia

 

New and full model changes for Kei-type cars

Spacia
Spacia Custom
The Kei-type tall miniwagons Spacia and Spacia Custom that underwent a full model change were launched in December 2017. Produced at the Kosai plant. The models are based on the HEARTECT platform and equipped with a 0.66L (R06A) engine with a mild hybrid system capable of creep driving mode when the engine starts after idle-stop. The models are equipped with the Suzuki Safety Support package that features a back-up brake support collision-mitigating system for backing up, which is installed for the first time on a minicar. They are also the first Kei-cars to adopt HUD (Head-up display) and 3D View.
Jimny
Jimny Sierra
The Kei-type 4WD Jimny and 4WD Jimny Sierra minicars were launched in July 2018 as full model changes for the first time in 20 years. The Jimny was initially produced at the Iwata plant, but production responsibility for the new models has since been transferred to the Kosai plant. The all-new Jimny is equipped with custom-tuned 0.66L (R06A) turbo engine, and the all-new Jimny Sierra is equipped with a newly-developed 1.5L (K15B) engine. The new models inherit the Jimny’s traditional body structures including a FR engine layout, part-time 4WD with low range transfer gear, and a 3-link rigid axle suspension. All variants are equipped as standard with electronically controlled brake LSD (limited slip-differential) traction control, realizing high off-road performance. The cars are also equipped with the Suzuki Safety Support preventive safety technology.
Super Carry The all-new Kei-type Super Carry mini-truck was launched for sale in May 2018. Compared to the Carry mini-truck, the Super Carry has an expanding rear cabin area to provide more space in the interior, and space below the cabin was created to achieve the same cargo floor length as the Carry. The Super Carry, as well as the Carry, is also equipped with Suzuki Safety Support preventive safety technology as standard featuring a collision-mitigation system for the front and rear to prevent misuse of the accelerator and brake pedals.

 

Suzuki’s next-generation technologies

Technology Outline
HEARTECT The new platform realizes a highly rigid and lightweight frame by a comprehensive overhaul of the underbody’s structure and component layout. The underbody frame has a smooth and curving form that results in an ideal frame structure that is simple and rational. Suspension parts are integrated into the frame. By affixing components to the strongest areas of the frames, the number of reinforcements have been significantly reduced. Also, by optimizing the underbody with the components that are attached to it, a more spacious interior or larger cargo area has been achieved.
TECT Suzuki’s TECT (Total Effective Control Technology) is a new lightweight impact absorbing body structure that is both light and highly rigid, enhancing collision safety. The body uses light but high strength materials (ultra-high-tension and high-tension steel). By keeping the body light, engine load is reduced, contributing to improved fuel economy while driving.
Dual Jet engine The Dual Jet engine has high thermal efficiency achieved by a high compression ratio and reduced friction. The engine adopts a dual injection system (with two fuel injectors per cylinder). By injecting atomized fuel, combustion is enabled and stable, resulting in improved thermal efficiency. Furthermore, by positioning the injector near the combustion chamber, fuel is efficiently delivered thereby lowering combustion chamber temperature and reducing knocking (abnormal combustion). Also, the engine features a cooled EGR system that cools some of the exhaust gas as it is recirculated to the combustion chamber. Suppressing abnormal combustion contributes to improved thermal efficiency.
Booster Jet engine Booster Jet engine is a direct-injection turbo engine realizing high power and high torque performance. By directly injecting fuel inside the cylinder, it is possible to control the optimal amount of fuel and reduce fuel consumption, and by cooling the air-fuel gas mixture knocking (abnormal combustion) can be controlled. To precisely control the fuel injection, six-hole injectors are mounted using a side injection layout. The high-pressure pump creates a highly atomized fuel mixture to promote efficient combustion. Furthermore, the engine is equipped with a turbocharger that achieves high torque from low engine speed regions. The turbo pressure is precisely controlled by adjusting the exhaust gas inlet flow through the waste gate valve.
Auto Gear Shift (AGS) Typically known as AMT (Automated Manual Transmission). The system is based on a MT that uses electro-hydraulic actuators to automatically operate the mechanical clutch and the shifting of the gearbox. It also uses a creep mode function and P-range used during engine start and parking, which are not normally equipped on conventional AMT.

Source: Suzuki homepage (Suzuki’s next generation technology, product lineup model specifications)

HEARTECT platform Hybrid system Lithium-ion battery for S-eNe Charge
HEARTECT platform(left)
Compared to conventional platforms (right), HEARTECT adopts a curved frame that is light and highly rigid.
Hybrid system
A full hybrid system capable of EV driving
Lithium-ion battery for S-eNe Charge
Adopts a Denso battery pack that uses a Toshiba lithium-ion battery.


Sales Forecast by LMC Automotive: Suzuki's light vehicle sales to hover 3.2 million units in the medium term

(LMC Automotive, Quarter 2 2018)

Suzuki's Light Vehicle Sales Forecast

 According to LMC Automotive's latest forecast (Quarter 2 2018), Suzuki's light vehicle sales are expected to be 3.26 million units in 2018, up by 5.2 % from 2017. As for the medium-term outlook, Suzuki's light vehicle sales are expected to hover around 3.2 mn units per year until 2021, with India accounting for 1.7 mn units. In Japan, sales are expected to be below 600k units in the near term.

 Suzuki and Toyota have deepened their business partnership in the Quarter 4 2017 by forming new agreements for the Indian market. Under a product-sharing deal, Maruti-Suzuki India will supply the New Baleno and Vitara Brezza to Toyota, while Toyota will provide the Corolla to Maruti-Suzuki. We therefore added the Suzuki-badged Corolla in India, and assume that it will hit the market by Q2 2019.

 In May, it was further agreed that Toyota’s Indian subsidiary would produce models developed by Suzuki for sale in India through each of the Toyota and Suzuki brand networks. We believe that the initial models will be the Toyota badged Baleno and Vitara Brezza. These vehicles will also be exported to Africa and other markets by both OEMs to be sold through their respective dealerships. In addition, Suzuki will receive technological support from Denso and Toyota to develop a compact, ultra-high-efficiency powertrain. Prior to these latest arrangements, the two OEMs had agreed in November 2017 to introduce electric vehicles in India by 2020, which will be produced by Suzuki.

 Suzuki is clearly preparing to face the technological challenges of the future, with a particular emphasis on overcoming its shortcomings in the electric vehicle space through its collaboration with Toyota. The deal’s specificity for the Indian market is also intended to protect the automaker's hard-earned dominance in its biggest global market. Indeed, India’s share of Suzuki’s global production volume is projected to rise to 65% by 2025.

 Regarding the Indian market, LMC Automotive focus specifically on the fast-growing SUV segment. Both Maruti-Suzuki and Hyundai have had recent successes with the Vitara Brezza and Creta, respectively. In fact, these were the top two SUVs in the market last year, and also led segment sales by the end of April this year. In the process, the Vitara Brezza and Creta toppled the former leaders, the Mahindra Bolero, Mahindra Scorpio and Ford EcoSport. We predict the SUV segment to be the fastest growing in India, expanding at a CAGR of 12% over the next seven years, to surpass 2.00 mn units by 2025.

 In Japan, Kei Cars and hybrids continue to lead the market. Looking at the Kei Car market in isolation, Suzuki differs from other local automakers in that it has very few non-Kei Car products, which could prove to be its Achilles heel in the Japanese market. That said, its cooperation with Toyota to develop next-generation vehicles - with a few projects already under way in India - should widen its product portfolio in other global markets in the coming years.

 

Suzuki's Light Vehicle Sales Forecast (LMC Automotive, Quarter 2 2018)

(Click here to download major 54 countries forecast table.)
(Units)

COUNTRY GLOBAL MAKE 2015 2016 2017 2018 2019 2020 2021
Suzuki Group Suzuki 2,700,525 2,729,865 3,052,819 3,207,840 3,245,848 3,216,462 3,261,504
Toyota 0 0 0 0 7,977 11,572 10,298
Chevrolet 4 20 12 11 0 0 0
Maruti-Suzuki 35,462 36,654 42,985 47,792 19,971 0 0
Total 2,735,991 2,766,539 3,095,816 3,255,643 3,273,796 3,228,034 3,271,802
India Suzuki 1,284,883 1,395,268 1,609,087 1,677,818 1,716,040 1,759,910 1,777,676
Toyota 0 0 0 0 7,977 11,572 10,298
India sub-total 1,284,883 1,395,268 1,609,087 1,677,818 1,724,017 1,771,482 1,787,974
Japan Suzuki 636,730 623,254 666,378 692,698 649,494 585,432 594,581
Pakistan Suzuki 98,510 73,059 87,828 98,519 123,545 144,466 147,662
Maruti-Suzuki 35,206 36,654 42,985 47,792 19,971 0 0
Pakistan sub-total 133,716 109,713 130,813 146,311 143,516 144,466 147,662
Indonesia Suzuki 121,805 91,686 111,660 147,693 155,704 152,857 144,880
China Suzuki 181,350 155,669 119,335 95,606 101,261 95,156 96,408
Chile Suzuki 22,087 24,058 26,718 31,076 31,798 33,052 34,996
Germany Suzuki 30,957 31,392 38,192 41,514 39,484 33,816 34,020
UK Suzuki 34,437 38,167 40,343 36,765 33,862 29,767 31,239
Thailand Suzuki 21,286 22,913 25,011 33,735 28,628 30,544 30,171
Italy Suzuki 18,518 22,596 31,083 32,868 31,039 27,532 28,265

Source: LMC Automotive "Global Automotive Sales Forecast (Quarter 2, 2018)"
*The table above shows data for selected countries, so the total of the country's in the table do not match the Suzuki Group Total.
(Note) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
   For more detailed information or inquiries about forecast data, please contact LMC Automotive.


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Keywords
Suzuki, Toyota, India, Africa, Gujarat, electrification, EV, HV, hybrid vehicle, S-eNe Charge, lithium-ion battery, ISG, MGU, AGS, Auto Gear Shift, AGS, HEARTECT, Suzuki Safety Support, XBEE, Swift

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