Suzuki to launch Across PHEV and 48V mild hybrid vehicles in European markets
Company-wide austerity budget continues, postponing the start-up of Plant No.3 in Gujarat, India
2020/10/15
- Summary
- Suzuki's electrification strategy: Hybrid vehicle ratio of 18.3% in FY2019
- European market: Introducing the Toyota RAV4 PHEV-based Across PHEV
- Eco-car strategy in India: Planning to sell 1 million CNG, hybrids, and EVs
- Business performance: A review of the five-year plan for fiscal 2015-2019
- 2020 Q1: Significantly lower sales and profits due to the negative impact of the COVID-19 pandemic.
- Capacity of 2 million units in India; start-up of Gujarat's No.3 Plant postponed
- Sales Forecast by LMC Automotive: Suzuki's sales will be 2.3 million units in 2023
Summary
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| Across PHEV to be launched in the European market in the fall of 2020 (Photo: Suzuki UK) |
This report covers the developments at Suzuki Motor Corporation mainly over the past year.
Regarding electrification, Suzuki sold 521,000 hybrids worldwide in fiscal year 2019 (18.3% of total vehicle sales). Furthermore, to meet the stringent CO2 emissions regulations in the European market, the company launched 48V hybrid versions of three models, including the Vitara, in March 2020. In the fall of 2020, the company will introduce the Toyota RAV4 PHEV-based Across PHEV.
The hybrid ratio in India in FY2019 was 7.7%. In India, with the BS6 emission regulations coming into effect in April 2020, all OEMs are planning to launch EVs. However, Suzuki is said to be focusing on expanding sales of hybrid and CNG vehicles for the time being, as the company believes it will take some time for the widespread adoption of EVs due to their high price and the lack of a charging network infrastructure.
Suzuki's consolidated sales for fiscal 2019 decreased for the first time in three fiscal years to JPY 3.4884 trillion (down 9.9%). Operating profit was JPY 215.1 billion (-33.7%), reflecting a decline in profitability for the second consecutive year.
Q1 FY2020 results (April-June) showed a significant decline in sales and profit due to the impact of the COVID-19 pandemic. Namely, Q1 FY2020 financial results were a global sales volume of 263,000 units (-64.3%), sales of JPY 425.6 billion (-53.1%) and an operating profit of JPY 1.3 billion (-97.9%).
In terms of future initiatives to increase profits, the first step is the recovery of the Indian four-wheeler vehicle business, and Suzuki will be more engaged in developing the market in rural areas where the potential for increased demand is anticipated. In addition, the company is currently working with 36 partner financial institutions on a campaign to uncover potential customer demand in terms of down payments and interest rates.
Secondly, Suzuki will work with suppliers to strengthen its production system for critical situations such as the current one, including financial support for building up parts inventories and alternative production in other regions.
Thirdly, Suzuki will continue to execute its austerity budget. The company said it will conduct reviews, which will include top management, to vet projects that can be postponed or canceled.
The company also postponed the start-up of its Plant No.3 in Gujarat, India, which was scheduled to start production in April 2020.
Related reports:
Indian Auto Expo 2020: GWM and Haima announce new entry into Indian market（Feb. 2020）
Suzuki: Alliance with Toyota, recall, and electrification（Sep. 2019）
India: Muted market growth and jump to BS-VI regulation（Sep. 2019）
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