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Suzuki Motor Launches New Plant, Localizes LiB in India to Maintain Top Share
Suzuki Motor is considering future market trends and CASE support for the formulation of a new management plan. The automaker planned to start a new medium-term management plan from FY2020, but the announcement has been delayed due to the outbreak of the new coronavirus. Suzuki believes that the Indian market has high growth potential in the medium to long term, so the automaker will step up its strategy to maintain its current Indian market share of 50% under the new medium-term management plan.
Suzuki will continue investing in India. After launching its second plant in January 2019, Suzuki Motor Gujarat plans to start operation of a third plant in April 2021, raising Suzuki’s annual production capacity in India to 2.25 million units. In addition, a lithium-ion battery plant, jointly set up in India with Toshiba and Denso, was scheduled to start operations at the end of 2020.
In Japan, Suzuki is aiming to boost sales of the new Solio launched in December 2020. The Solio, a compact tall wagon, has maintained domestic sales of over 40,000 units for four consecutive years since 2016.
Suzuki’s partnership with Toyota is centering on next-generation technology. In 2021 at the earliest, a small BEV, jointly developed with Toyota, is expected to be launched in India.
Suzuki Motor: Business Outlook for 2021
New medium-term plan
・As of December 2020, Suzuki was formulating a new management plan.
– The automaker planned to start a new medium-term management plan from FY2020, but the announcement has been delayed due to the outbreak of the new coronavirus.
– Recognizing that the automobile industry will enter an era of major changes, Suzuki is formulating a plan by backcasting from a desired future 10–15 years ahead.
– The Indian market is expected to expand significantly around 2030. Before the pandemic, the Indian market was expected to expand to 10 million units in 2030. Suzuki aims to maintain a 50% share in the Indian market.
– Future market trends and CASE compatibility are under consideration.
・Global sales in 2020 are expected to decrease 16.6% from the previous year to 2.37 million units. The decline affected all markets around the world.
– Suzuki predicts that the number of vehicles sold in India in 2020 decreased by 20% from the previous year.
– In Japan, light vehicle sales are expected to drop 4.2% year-on-year to 531,000 units while standard vehicle sales are forecast to decline 11% to 105,000 units.
・Global production in 2020 is expected to decrease 14.7% from the previous year to 2.52 million units. Production in Japan is predicted to drop 3% to 916,000 units, going below 1 million units for the second consecutive year, while production in the rest of Asia is forecast to fall 19.4% to 1.49 million units.
・In India, Suzuki Motor Gujarat’s third plant is scheduled to start operations in April 2021, raising Suzuki’s annual production capacity in India to 2.25 million units.
・A lithium-ion battery plant, jointly set up in India with Toshiba and Denso, was scheduled to start operations at the end of 2020.
・In September 2021, Suzuki plans to launch a new plant in Myanmar’s Thilawa Special Economic Zone.
– Invested for 12 billion JPY, the plant will have a building area of about 42,000m2 and an annual production capacity of 40,000 units. It will engage in vehicle welding, coating and assembly.
・In Japan, the new Solio was launched in December 2020. The Alto and Lapin models are expected to undergo full-model change.
・In Europe, the Vitara is likely to undergo full-model change.
・In India, a BEV model is expected to be launched in 2021 at the earliest.
・In India, BEVs are under development in cooperation with Toyota Motor.
・By utilizing the alliance with Toyota, Suzuki is promoting the development of advanced technologies such as electric vehicles, autonomous driving, and connected solutions.
(Created using Suzuki Motor’s PR materials and various media sources)
Suzuki Motor: Business Trends in India in 2021
Maintaining 50% market share in 2030
・Despite the anticipated growth of the Indian market, Suzuki aims to maintain its current 50% share in 2030 (announced in December 2020).
Sales network expansion
・Suzuki aims to increase the number of stores to 9,000 in 2030 (indicated by Suzuki’s Chairman Suzuki Osamu in March 2020).
– As of September 2020, Suzuki had 3,071 stores in India. There were 2,373 Arena shops (selling passenger vehicles), 376 NEXA shops (selling premium vehicles) and 322 Commercial shops (selling commercial vehicles).
Launching online financing platform
・In December 2020, Suzuki launched the Smart Finance online financing platform for Nexa customers.
– The Smart Finance platform, hosted on the NEXA website, enables customers to select a vehicle and get a loan online. The service is available in 30 cities across India.
– Customers can perform various procedures online such as comparison and selection of financial institutions, selection of loan products and loan payment.
– It will be also available for Arena customers in the future, gradually increasing the scope of coverage.
Operation plan of new automobile factory
・In April 2021, Suzuki Motor Gujarat (SMG)’s third plant is scheduled to start operation.
– The original plan was to start operations in April 2020, but it was postponed in November 2019 to July 2020 due to the deterioration of the market environment. In May 2020, it was decided to further postpone the starting date in consideration of the impact of the new coronavirus infection. In November 2020, SMG announced that the new plant would start operations in April 2021.
– Invested for 60 billion JPY, the new plant will have an annual production capacity of 250,000 units, raising SMG’s combined capacity of its three plants to 750,000 units. Once the new plant is operational, the combined annual production capacity of SMG (three plants: 750,000 units) and Maruti Suzuki (two plants: 1.5 million units) will rise to 2.25 million units.
Operation plan of battery factory
・From the end of 2020, Automotive Electronics Power, a tripartite joint venture of Suzuki, Toshiba and Denso manufacturing lithium-ion batteries for automobiles, was scheduled to start operations.
– The factory will manufacture 12V lithium-ion battery modules and packs for MHEVs. Invested for 12.5 billion INR, the factory was planned to have an annual production capacity of 1.63 million units at the start of construction in 2017.
– Battery cell production is also planned to be localized by 2025. The 37.51 billion INR investment is planned to create an annual production capacity of 30 million cells.
OEM supply to Toyota
・From 2021, Suzuki plans to OEM supply the Ciaz and Ertiga to Toyota (agreement signed in October 2019).
– As of the end of 2020, Suzuki OEM supplied the Baleno (sold in India and Africa) and Vitara Brezza (sold in India) to Toyota.
Consignment production by Toyota
・From 2022, Toyota Kirloskar Motor plans to begin consignment production of the Vitara Brezza (agreement signed in March 2019).
(Created using Suzuki Motor’s PR materials and various media sources)