Suzuki Motors’ global sales have been on a decline for six consecutive months. The Japanese company’s production in April 2016 fell to 250,465 units, which is a decline by 98.6% as compared to production in April 2015.
On the other hand, Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corp, has continued with their success story in India. The Indian car maker which has now increased its market share to 48.3%, produced 125,134 cars during April 2016. This means, Suzuki manufactured just 125,331 cars outside India.
In its home country, Suzuki produced 68,942 units, down 81.5%. The company also noted a steady fall in production in the past 14 months. MSIL on the other hand is posting a steady 10% YoY growth in India. 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 early 2017. Cars produced at the Suzuki plant will be sold in India as well as exported.
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. 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.