Business

Suzuki prepares a ‘mini’ blitz

by Akemi Nakamura

Suzuki Motor Corp., Japan’s top minivehicle maker three decades running, is preparing an assault on the global market with a new line of compact cars, according to company President Hiroshi Tsuda.

The automaker will initially target Europe, where drivers are more discerning about car styling and driving performance, according to Tsuda, who assumed the presidency April 1.

“If our products are a hit in Europe,” he said, “those models will be accepted in Japan and other Asian countries, including China, India and Indonesia.”

Suzuki sold about 220,000 vehicles in Europe in 2002.

Tsuda, 58, said it would be difficult for Suzuki to nab a bigger slice of the domestic compact market, as competition here is fierce due to an abundance of strong models, including the Honda Fit, the Mitsubishi Colt, the Nissan March and the Toyota Vitz.

To further penetrate the European market, Suzuki must improve its car styling, Tsuda said.

“Our cars for Europe are usually designed in Japan and modified to meet European customers’ tastes,” he said. “But we are now considering designing the cars in Europe.”

Suzuki announced last week it will jointly develop and produce a compact sport utility vehicle with Italy’s struggling carmaker Fiat Auto S.p.A. at Suzuki’s Hungarian subsidiary.

The joint manufacturing project will begin in late 2005. The two carmakers plan to turn out 60,000 vehicles annually, with 40,000 to be made under the Suzuki brand and the remainder to bear the Fiat label.

Tsuda hopes these efforts will increase Suzuki’s global production to 2 million vehicles from 1.8 million over the next two years. The compact car business will be key to achieving that goal, he said.

“The minivehicle business is our main source of revenue, and the operation of 1-liter to 2-liter compact cars should be another pillar,” he said.

Minivehicles, which have an engine displacement of up to 660cc, are extremely popular in Japan, where tax incentives make owning them highly economical.

Last year, the Hamamatsu, Shizuoka Prefecture-based maker sold 572,184 minivehicles and 53,534 compact cars in Japan. It sold 282,449 compact cars overseas.

But as minicar sales are slowing, it seems natural for the firm to push its compact line. Sales of new minivehicles in 2002 fell 1.2 percent from a year earlier to 1.83 million units, down for the third straight year, according to the Japan Mini Vehicles Association.

On corporate tieups, Tsuda said Suzuki will continue being a member of the General Motors Corp. group.

In fact, the joint project between Suzuki and Fiat is one of the fruits of its relations with GM, which owns 20 percent stakes in both the Japanese and the Italian carmakers.

“Our role in the GM group is to maintain footholds in Japan and other Asian countries and to advance technology for small-vehicle manufacturing,” Tsuda said.

Suzuki and GM are jointly studying technology for hydrogen-powered fuel-cell vehicles and considering jointly developing gasoline-electric hybrid technology, Tsuda said.

In January, Suzuki launched in Japan a hybrid version of the two-seat Twin minicar based on its own technology. It was the first commercial hybrid minicar to hit the market.

“We’ll gradually begin fitting other minicars and compact cars with hybrid drivetrains after studying customers’ reactions to the Twin,” Tsuda said.

“As a top minicar maker, we’ve got to continue proposing new minicar concepts to customers. But I’m not sure whether our efforts will result in the expansion of the minicar market.”