Suzuki Sales & Production Ramp Up; GM's 1-year Stake Buyback Deadline to be Deferred

[Ming]

Suzuki to raise 2007 sales 8% on overseas demand - company may keep GM's 17% stake longer



25 Jan 2007
bbj.hu

Suzuki Motor Corp., Japan's fourth-largest automaker, plans to raise sales 8% this year as overseas demand for its compact cars rises, will increase production capacity in Hungary.

The company plans to sell 2.35 million vehicles in 2007, compared with 2.17 million last year, Suzuki said in a release today. Domestic vehicle sales including minicars will fall 3% to 675,000, while overseas sales will rise 13% to 1.68 million. Chairman Osamu Suzuki will spend ¥1 trillion ($8.3 billion) for the five years ending March 2010 to expand global production, as models including the SX4 and Swift compact cars attract more buyers.

Speaking at a press conference in Tokyo today, Osamu Suzuki said he's not worried about Daihatsu replacing Suzuki as the biggest minicar maker as long as his company's total production is growing. The chairman, who turns 77 next week, also said he plans to keep his position „as long as I'm alive.”

Industry-wide sales of minicars, powered by engines no larger than 0.66 liters, rose 5.2% in Japan to a record 2.02 million vehicles in 2006, according to the Japan Mini Vehicles Association. Sales may drop 3.1% to 1.96 million this year, the group said. Suzuki, which released two new minicar designs in 2006, had a 30.2% share of Japan's mini-vehicle market last year. Daihatsu, a unit of Toyota Motor Corp., plans to raise minicar sales at home 3.3% to 620,000 units, the company said in December, introduced three new models, and had a 29.7% market share.

Suzuki plans to open a new plant next year to build only compact cars, in Sagara City, near its head office. The company has been trimming its minicar production in Japan since September.

General Motors Corp., the world's largest carmaker, in March 2006 reduced its stake in Suzuki to 3% from 20%, by selling a 17% stake to Suzuki Motor for 230 billion yen. Suzuki said at that time it would hold the 17% stake for a year to give GM the option of buying it back. Osamu Suzuki said today his company may keep the stake longer. „We agreed to keep a good long-term strategic partnership,” he said, referring to a November meeting with GM CEO Rick Wagoner. „So we don't need to stick with the deadline.” GM and Suzuki have partnerships including joint production in Canada and co-development of fuel-cell cars and gasoline-electric hybrid vehicles.

Full Article: http://www.bbj.hu/main/news_21780_su...+extended.html

[ChevroletRevived]

That's great that they are holding the stock for longer. I'd like GM to be able to purchase it back in time. Suzuki is growing and expanding, and they have small car expertise. A very important thing in today's climate.

[bcjohnso99]

Originally Posted by ChevroletRevived

Suzuki is growing and expanding, and they have small car expertise. A very important thing in today's climate.

I agree, but I wish GM had figured out how to use it. Instead they just rebadged the Swift (Geo Metro, Firefly, et al), Sidekick (Tracker), etc.

Did Suzuki play much of a role in improving GMDAT offerings?

[mgescuro]

Originally Posted by bcjohnso99

Did Suzuki play much of a role in improving GMDAT offerings?

That's a good question. I don't know. But it would make a lot of sense.

Now Daihatsu is going to become the worlds #1 producer of minicars?? Great. That's another Toyota #1.

[throwback]

Originally Posted by ChevroletRevived

That's great that they are holding the stock for longer. I'd like GM to be able to purchase it back in time. Suzuki is growing and expanding, and they have small car expertise. A very important thing in today's climate.

I agree completely. Small cars are GM's weakest link.

[CobaltSScrazy]

Originally Posted by throwback

I agree completely. Small cars are GM's weakest link.

unfortunately yes, but HEAVY R&D is going into GM Asia read Daewoo for compact/subcompact car development and is consolidating over there with products like Aveo and Excelle being the first of the beginning of this new global consolidated operations format where Trucks/Corvette designed here, Large RWD in Aussieville, Midsize/sigmas for refinement in Europe, etc. At least thats what my perception of 'the plan' is.

Clarifications welcome although I believe this is all pretty factual. (Why can't we just buy 40% of Honda and rebadge Hondas here and abroad? LOL )

CobaltSScrazy

[Chaz_23]

Forget Suzuki. Saturn Corsa!

[killerrd2]

I think GM should hold off and invest more in OPEL. The proven small car products are already there!

[Ming]

Perhaps, but one thing Suzuki can do that Opel and Chevrolet failed to do is crack the Japanese market. They OWN the small car market in Japan at this point, and have for a while.

I think Mazda is important to Ford, and Suzuki is important to GM, if not to the same degree.

What is needed is more shared engineering, and less rebadging. More of what is going on with the new Suzuki XL-7 and the Suzuki production of the GM 3.6L DOHC engine in Japan for it.

In reverse, GM could allow Suzuki to supply GM Daewoo with its small car engine designs, or just manufacture the engines for GMDAT. The Holden Family engine is old anyway and needs to be replaced. What better way for Suzuki to improve the Forenza/Reno line than to supply the engine for the next generation? Or supply the design to Holden for them to produce since Suzuki's production is running full bore?

I'd like to see Opel's small cars succeed elsewhere, but Opel has not proven its small cars to be particularly value-packed or profitable in countries where the GM Daewoos and Suzukis thrive. I'm not sure that the Opels are built with low cost / high value as the first priority. Like Volkswagens that come to the States always seem overpriced, the Opels price themselves out of these lower cost markets where Daewoo and Suzuki can succeed. Great as high end Saturns, not so great as stripper last-gen Corsas.

Where Opel small cars succeed in other regions they use very old Opel designs, like in Brazil, and that's not really an attractive option either.

[guitarlix]

Yes to Ming's post. It's amazing how consistently I find myself agreeing with almost everything he writes.

[RedVee8]

I believe the ownership structure of GMDAT is GM (through Holden), Suzuki & assorted Korean banks. Therefore I'd guess that Holden and Suzuki would both have a say.
Isn't the new XL-7 a stretched and uglified Captiva?

[ChevroletRevived]

Originally Posted by killerrd2

I think GM should hold off and invest more in OPEL. The proven small car products are already there!

GM owns all of Opel. Opel is a GM division.

[asim]

Wow. 8% Thats a huge chunk; it is probably because of growth of Suzuki here in the States. They are doing very well maybe even some of the best they have ever done. I wonder is GM will want to buy back that stock though. Maybe GM can only buy 8 or 9 percent, instead of the whole 17.

[Road Kill]

Suzuki has been the best Japanese partner GM has had. They haven't kicked sand in their faces at every opportunity like Subaru who took the cash but were unwilling to share technology. Isuzu was better but very poorly run. Small cars are GM's week spot and with Suzuki's help they could improve GM DAT a great deal. There is also the Japan factor, the reality is we will never sell cars there without a strong partner.

[01cavalier]

GM should buy it back before Toyota gets it.