Suzuki Looks to Capitalize on Swift Success in Thailand

BANGKOK – Suzuki approached the 34th Bangkok International Motor Show, which opened last week and runs through April 7, riding the crest of a yearlong sales wave on the back of its successful new Swift.

A hit with local buyers, the B-segment hatchback has turned Suzuki into a car brand here that is knocking on the doors of the market’s more-established players. Just a couple of years ago, Suzuki was known mostly for its range of basic and low-cost light-commercial vehicles.

Not only has the Swift changed all that, it arguably has become the most aspirational model among the eco-car breed. The Swift retains some of the highest margins in the segment and has become the new model of choice for customization, a strategically important metric in terms of brand building.

As a result, Suzuki has emerged as the fastest-growing brand in the new-car segment here.

The numbers so far this year make good reading for Suzuki executives. February saw the auto maker sell 2,800 cars, up a massive 2,541.5% year-on-year and good enough for a 4.4% slice of the new-car market. That allowed Suzuki to leap into fourth place ahead of Ford and Chevrolet on the best-selling brands list.

Suzuki Thailand President Takayuki Sugiyama isn’t satisfied, however. He is targeting a 5% share for 2013, based on an industry sales forecast of 1.2 million vehicles.

Turning Suzuki into a more retail-focused brand in record time isn’t as close to being a clean-sheet exercise as might be expected, Sugiyama says. Suzuki’s leading position in India’s car market can serve as a roadmap for building the brand here.

“We have experience (in Asia),” he says. And in Thailand, “we have experience of the customer culture. So (it is) not so difficult, but not so easy. It’s step-by-step.”

Suzuki’s primary calling card is the Swift itself, Sugiyama believes, promising the car is no flash-in-the-pan and that sales volumes will be maintained.

But the auto maker also is bolstering its arsenal with the new Ertiga multipurpose vehicle launched at the show that will arrive in the market as a built-up import from Indonesia.

Bringing the model from Indonesia, where it is a top seller for the auto maker, is a win/win, because it helps soak up additional capacity there while allowing the Ertiga to find its niche without any real volume pressure.

While B-segment MPVs are the dominant segment in Indonesia, they represent a small share of the market in Thailand, and the sector largely is the preserve of Toyota and Honda.

But it’s a category that is expected to grow steadily. Other OEMs are starting to eye opportunities, including General Motors, which introduced its Indonesia-supplied, 7-seat Chevrolet Spin model at the Bangkok show.

While the Ertiga, which comes to Thailand fitted with a 1.5L engine, will represent only a niche product here, Suzuki is looking to add a second volume model to its new Thai factory, now undergoing a phase-2 expansion.

Initial annual capacity was set at 50,000 units, but that will double to 100,000, with construction expected to be completed early next year.

With the Swift reshaping Suzuki’s footprint in Thailand, a second locally produced model is vital to sustain its growing dealer network, now numbering about 100 outlets, and more firmly position it in the minds of car buyers.

Having only one car model is not enough, Sugiyama says. “So we are now considering the next product.”

With sales of the Swift averaging 4,000 units a month, the extra Thailand capacity will be used in part to export vehicles to additional markets, Sugiyama says. Currently the car is shipped to Indonesia, Australia and New Zealand and in complete-knocked-down kit form to Malaysia.