Trend Towards Small Cars Predicted By Car Maker

TREND TOWARDS SMALL CARS PREDICTED BY JAPANESE CAR MAKER

2001/31 9 May 2001

Suzuki, one of the most profitable of the Japanese motor manufacturers, is predicting a bright future for mini-size cars.

Following the boom in mini car sales in the strong Japanese car market, Suzuki is bullish about worldwide demand for small motor vehicles.

Two-thirds of the six billion people in the world have no access to cars and Suzuki is unique in being able to reach these people, according to Masao Toda, President of the Suzuki Motor Corporation.

Suzuki commands almost 30 per cent of the Japanese domestic market for mini vehicles and the company is optimistic about demand for small cars over the next five years.

Total sales of mini or micro size cars in Japan are running at around two million units a year, and there are currently 20 million of them on Japanese roads.

Demand for smaller cars in Japan is increasing, especially as the nation has one of the world’s fastest ageing populations. Since 1997 there has been an increase of almost 50 per cent in mini vehicle sales in Japan.

In a recent interview with the North American Ward’s Automotive International publication, Masao Toda outlined Suzuki’s strengths in concentrating on mini vehicles and said only Suzuki combined technology and sales in such a way to produce synergies throughout the organisation.

Such was the speed of change that long-term issues were being too difficult to predict. A 43-year veteran with the company, Mr Toda said five years today was like 20 years before.

The fourth largest motor manufacturer in Japan, Suzuki sold almost 1.9 million vehicles in 2000 for the second year in a row. For every new Suzuki registered in Japan, two are sold overseas.

In 2001 the company expects slightly “softer” world sales of around 1.8 million but longer term projections are to boost this figure to 2.5 million vehicles a year across five continents.

Suzuki began building a global production network 40 years ago, soon after it commenced production of small cars. Today it has production bases in 17 countries outside Japan and actually assembles vehicles in 25 countries, including places like China, India, Canada, Hungary and Indonesia.

Despite a strong Japanese currency, Suzuki is expected to report a healthy profit for the fiscal year ending March 31. Suzuki is second in net cash only to the number one Japanese motor manufacturer, Toyota, and has one of the best balance sheets in the Japanese motor industry.

Its Kosai plant, for example, is one of the world’s most productive car factories, and last year boasted an impressive 134 units output per employee. Kosai turns out a new car every 44 seconds and last year built an average 10,501 vehicles a week.

Suzuki has been able to hold costs below the competition to increase the competitiveness of its cars, light trucks and vans. And it has been successful in emerging nations by starting out with motorcycles before adding four wheeled mini cars, trucks and vans as incomes rise and consumers are able to move up market.

The Suzuki President stressed Japanese’s biggest concerns were the environment, safety and comfort. Cars would become more intelligent and interactive devices would become standard.

Suzuki wants to reduce vehicle development periods and develop new environmental technologies such as more efficient emission control systems.

A consistent leader in the Japanese mini car segment for 27 years, Suzuki built its reputation in New Zealand on compact, fuel-efficient Alto, Samurai and Carry van models before developing into larger cars like the Grand Vitara and Baleno. Its small car craftsmanship has earnt the marque a fine reputation in the local marketplace over the past three decades.

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