Market Insight: Lean strategy for Suzuki

SURVIVAL of the fittest means the ability to adapt, often rapidly, to varying conditions, to which end Suzuki has announced its long-term corporate ‘growth strategy’ through to FY2030.

Punctuated by a string of key words and phrases – “smaller, fewer, lighter, shorter, beauty” – and a desire for “lean management”, the strategy is headlined by delivering customers “value-packed products”.

Much of the attention is towards battery electric vehicles (BEV). It will introduce BEVs in commercial models in Japan in FY2023 (March 2023-April 2024), expanding the BEV roll-out to compact SUVs and small cars with six models planned for launch by FY2030.

“In addition, we will develop new hybrids for mini and compact vehicles, and by combining them with battery EVs, we will offer various options for our customers,” the strategy report says.

“In Europe, we will introduce battery EVs in FY2024, expand to SUVs and B- segments, with five models to be launched by FY2030.

“We will respond flexibly to environmental regulations and customer needs in each European country.

“In India, we will introduce the SUV battery EV announced at the Auto Expo 2023 in FY2024, with six models to be launched by FY2030.”

This point refers to the Suzuki eVX concept shown in Delhi recently and likely to enter the Australian market from late 2025.

Suzuki has already proposed to offer a hybrid version of all of its models in Australia by 2025, although the volume would depend on any prioritising by other – more emissions-sensitive – markets.

Much of the attention will focus on SUVs. Suzuki sales are up 19 per cent on 2014 with models such as the Jimny now the company’s second-best vehicle on the Australian market, despite weak supply.

Jimny sales are up 75 per cent in the past three years (1391 sales in 2019 and 5697 in 2022) while popularity of the Swift light car has fallen 34 per cent to 4405 units in 2022.

BEV models are seen as important to Suzuki but not necessarily to Australia. It said that it was looking not only at battery EVs but at other options.

“To provide a full range of products and services, Suzuki will provide not only battery EVs but also carbon-neutral internal-combustion engine (ICE) vehicles that use CNG, biogas, and ethanol mixed fuels,” it said.

For FY2030, Suzuki plans to foster a carbon-neutral society and the economic growth of emerging markets such as India, ASEAN, and Africa “with our main business regions, Japan, India, and Europe, as the core”.

It aims to be carbon neutral in Japan and Europe by 2050 and in India by 2070. In India, Suzuki dominates the market through its alliance with Maruti. It sold 1.45 million vehicles there in the first nine months of FY2023, from April to December 2022.

Suzuki also plans a BEV motorcycle – designed for commuting – in FY2024 and expand to have eight models by FY2030. Its BEV motorcycles are then expected to comprise 25 per cent of Suzuki’s bike output.

“For large motorcycles for leisure purposes, we are considering adopting carbon neutral fuels,” says the strategy report.

Battery electric propulsion will also be introduced in FY2024 for small outboard motors “that are often used in lakes and rivers” with five models expected by FY2030 and for battery electric outboard motors to make up five per cent of its marine products sales.

As with larger motorcycles, Suzuki says it is planning to adopt “carbon neutral fuels” to power “large outboard motors used in the ocean”.

Suzuki also plans electric mobility options, including the electro senior vehicle which is a new mode of transportation for people who have voluntarily returned their driver's licences.

It first showed its Kupo – an eclectic-assist mobility unit that can be charged from a walker to a wheelchair depending on the user’s needs – in 2019 and now has confirmed it will be developed for production.

The second unit is the Mobile Mover, a multi-purpose robotic dolly being developed in collaboration with M2 Labo, that will introduce mobility vehicles “which supports our lives in new market segments created by the diversification of customer needs and changes in the environment”.

Suzuki said that it expects an increase in total CO2 emissions “unavoidable, regardless of reduction in CO2 emission from products”.

“We will challenge to strike a balance between increasing sales units and reducing total CO2 emission amount.

“Suzuki's unique initiative to tackle this challenge is the biogas business, in which biogas derived from cow dung – which is dairy waste that can be seen mainly in India's rural area – will be produced and supplied.

“This biogas can be used for Suzuki's CNG models that account for approximately 70 per cent of CNG car market in India.”

Suzuki has signed an MoU with the Indian government agency National Dairy Development Board and Banas Dairy, Asia's largest dairy manufacturer, to conduct verification of biogas. It has also invested in Fujisan Asagiri Biomass, a company that generates energy using biogas derived from cow dung in Japan.

“We believe that the biogas business in India not only contributes to carbon neutrality, but also promotes economic growth and contributes to the society of India,” it said.

“We are also in view of expanding the business to other farming areas in regions including Africa, ASEAN, and Japan in the future.”

Suzuki said it will also cooperate with outside partners and will “deepen our cooperation relationship with Toyota Motor Corporation while continuing to be a competitor, and aim for sustainable growth and conquer various issues surrounding the automobile industry”.

“Through the cooperation, we will cooperate in development of advanced technologies including autonomous and battery of electrified cars, business expansion in promising emerging countries, efforts for carbon neutrality in India, as well as formation of a recycling-based society that considers the environment.”

Suzuki has pledged to invest ¥2 trillion ($A21.63 billion) in R&D expenses and ¥2.5t ($A27b) in capital expenditures, a total of ¥4.5t ($A49b) by FY2030.

Of the ¥4.5t, 2 ¥2t will be electrification-related investments, of which ¥500b ($A5.4m) will be battery-related investments.

The R&D expenses will be in areas including carbon neutrality such as electrification and biogas, as well as autonomous driving technology.

Suzuki will spread the ¥2.5t of capital expenditures across the construction of battery plants and renewable energy facilities.

The company has forecast consolidated net sales for FY2023 (the current financial year) to be ¥4.5t ($A49b) “which is growing at a pace to exceed the ¥4.8 trillion target for FY2025 set in the mid-term management plan.”