Suzuki Sets Path for Growth in Europe, Asia

TOKYO – Suzuki is in the early stages of a new 5-year business plan that raises the bar on both sales and earnings through fiscal 2020 on the strength of the Asian market.

The program sets revenue and volume sales targets of ¥3.7 trillion ($30.8 billion) and 3.4 million units, up from ¥30.2 trillion ($25.1 billion) and 2.9 million units in fiscal 2014.

By region, Suzuki, which ranks No.4 in sales in Japan and No.1 in India, aims to sell 2.9 million vehicles in Asia, including 700,000 in Japan, and 280,000 in Europe. Sales in Southeast Asia, China and India are expected to grow annually by more than 5%; 30% in total over the planning period.

No mention is made of the North American market in the plan. In fiscal 2014, the region represented only 2% of the automaker's automotive business.

A second plan goal is to boost profit margin to 7%, up from 6% last year, and by extension earnings to ¥259 billion ($2.2 billion), up 20%.

Meanwhile, Suzuki is in the process of expanding and fortifying its five global production centers, only this spring adding new capacity in Indonesia with the opening of a $1 billion plant in Cikarang, West Java.

Elsewhere, the automaker operates vehicle plants in India, Hungary, China and Japan. An estimated 90% of capacity is in Asia including Japan. Excluding Japan, the Asian market share is 70%.

The new Cikarang plant, with capacity to produce 100,000 Ertiga passenger vans, includes onsite engine and transmission production.

Counting capacity of an older plant 60 miles (97 km) east of Jakarta, Suzuki now can produce 250,000 vehicles in the world’s fourth most-populated market.

In 2017, Suzuki will follow with a new plant in India, in Ahmedabad, Gujarat state. The ¥60 billion ($500,000) plant, the auto maker's first outside the Gurgaon region, will have capacity for 250,000 vehicles. The first model expected to roll out of the plant is the Baleno hatchback.

Through Maruti Suzuki India, the automaker’s New Delhi-based subsidiary, Suzuki intends to maintain a more than 45% share of the Indian market in fiscal 2020. In fiscal 2014, it sold 1.2 million vehicles including 350,000 with diesel engines.

Suzuki plans to develop Indonesia and Thailand as export bases, having opened its Thai plant in Rayong Province in 2012.

Globally, Suzuki will introduce 20 new models over the next five years including five 0.66L minis, six A-segment cars and nine B- and C-segment models including SUVs.

In Japan, the automaker hopes to maintain a more than 30% share in the 0.66L minivehicle market, which accounts for nearly 40% of demand, while boosting sales of small cars, ranging from 1.0L to 2.0L in engine displacement, to 100,000 units.

In powertrains, Suzuki has set an average thermal efficiency target of 40% for its gasoline engine lineup centered around a series of technologies including direct injection, turbocharging and lean burn.

At the Tokyo auto show this week, it will display the Baleno hatchback, which features both Boostjet turbocharged and Dualjet powertrain options. Boostjet features both direct injection and turbocharging. Dualjet uses two injectors per cylinder. The result: more precise control.

The 1.0L Baleno is scheduled to go on sale in Europe next spring.

Without providing details, Suzuki indicates it will spend ¥1 trillion ($8.3 billion) on facilities over the next five years, ¥200 billion ($1.7 billion) annually, virtually unchanged from the most recent two fiscal years.