Suzuki Motors’ global sales have been on a decline. Their production in home market Japan, fell for the 21 straight month. Similar is the situation of Suzuki in other global markets, except for India. Here, 2016 will see Maruti, a subsidiary of Suzuki, produce double the number of cars Suzuki has produced.
Suzuki is all-set to end the year 2016 with annual sales of about 7.65-7.75 lakh units in Japan, while its subsidiary – Maruti is on its way to end the year with sales of 15.2-15.5 lakh units. Suzuki owns 56% stake in Maruti.
In Japan, Suzuki’s production this year is lowest in about 5-6 years. But in India, Maruti has been reporting record growth, year after year. Not only Maruti is improving domestic presence, they are also exporting new cars to newer markets. For example, their new Baleno hatchback is exclusively made in India, and exported to the world. It is also the first car Maruti has exported to the home country of its parent.
India is expected to see an increase in the production of Suzuki cars even further as the company will setup their first plant in India which will be 100% owned by them. This is being setup in Gujarat, and will start production by February 2017. Cars produced at the Suzuki plant will be sold in India as well as exported.
Suzuki in India
The interesting point to note here is that Suzuki will be operating as a completely different organization than Maruti Suzuki. This means that Maruti will have to buy cars from Suzuki, which are produced at the Gujarat plant and then sell to customers. This transaction is expected to result in higher profits for Suzuki.
At the same time when Suzuki is finding it difficult to stop decline in sales, it is also contending with a scandal back home, which emerged earlier this year. The company has pleaded guilty for having misrepresented fuel efficiency figures on as many as 16 of their cars.
Suzuki blames the 2008 global financial crisis for this, but states that it was not done to cheat buyers. Suzuki admitted to use of deceptive measures for getting fuel economy of their cars. Suzuki claimed that windy conditions at the company’s seaside testing grounds made it mandatory to test some vehicles in the lab rather than outdoors as stipulated by the Government.
via ET Auto