Japan
Sustainability Report 2023On January 26, 2023, Suzuki held a briefing on its Growth Strategy for FY2030.
With the motto to deliver “value-packed products” by focusing on the customer, Suzuki will carry out its unique Growth Strategy for FY2030 by operating under the principle of manufacturing “Sho-Sho-Kei-Tan-Bi (Smaller, Fewer, Lighter, Shorter, Beauty),” “Entrepreneurial Spirit” which emphasizes flexibility, agility, and the challenging spirit, and the “Three Actuals” principle, which omits impracticality and focuses on the actual place, thing, and situation.
The President will explain the basic concept and thoughts behind our distinctive initiatives.
Outline of the Growth Strategy
Aiming at FY2030, Suzuki strives to realize a carbon neutral society and will contribute to the economic growth of emerging countries such as India, ASEAN, and Africa, with our main business regions, Japan, India, and Europe, as the core. We will focus on creating solutions that are unique to Suzuki, which are to develop products and services focused on the customer, and grow along with the operating countries and regions.
Major initiatives for FY2030
<Carbon neutrality>
Products (Automobiles)
Based on the target date set by each government, Suzuki aims to achieve carbon neutrality in Japan and Europe by 2050 and in India by 2070.
We will continue to strive to achieve our carbon neutral goals for each region, based on our mindset to expand our customers’ choices and deliver products and services that meet the needs of each region. We will develop the right EVs for the right place to meet customers’ needs and usage styles.
Suzuki’s unique EV expansion
Looking globally at the automobile market of the future, I have doubts over whether EVs are the only answer. For example, it is said that global vehicle ownership is approx. 1.5 billion vehicles, and we need to make sure of whether it’s possible to supply all the materials needed for batteries for all of those vehicles, or if it’s even possible to supply enough batteries to meet customers’ needs. And then, in addition to the challenge of whether enough charging stations can be established to meet customers’ needs, we also need to question the impact that the increase in battery weight will place on road infrastructure and multi-story parking lots. When we say “right place, right time,” it means that EV, hydrogen and carbon neutral fuels all have a place and method that suits them, so developing mobility that can be used according to particular places and situations will lead to the development of the future.
I, personally, believe that mini vehicles are optimal for EVs. As the average number of passengers per vehicle in Japan is 1.7 and the driving distances are short, I believe that a superior mini vehicle EV can be made real by further re-thinking how it will be used. We want to produce cars and mobility based on what customers tell us about the types of cars they want, and we are proud that Suzuki, whose strength is that it has continued to make small cars, is capable of doing this.
Suzuki Smart Factory Creation
By combining Suzuki’s principle of manufacturing “Sho-Sho-Kei-Tan-Bi (Smaller, Fewer, Lighter, Shorter, Beauty)” with digitalization, we will optimize, minimize, and simplify the flow of data, things, and energy. Through these initiatives, we will thoroughly remove inefficiencies and promote carbon neutrality.
Basic philosophy of the Suzuki Smart Factory
From an investment aspect, we will focus on innovation in the production structure. I believe that for a manufacturing company, a plant that does not produce defective products will generate the most profits. We are working to create the Suzuki Smart Factory that will run continuously, gathering production data without relying on human labor, using advanced sensors and discover problems before defects are generated or equipment is shutdown. We are also using energy effectively and promoting highly energy efficient manufacturing.
<R&D structure and cooperation with outside partners>
The Suzuki Global Ventures, a corporate venture capital fund established in 2022, is accelerating the co-creation activities with start-up companies by exceeding the framework of each company and their conventional businesses. We will make investments in areas that serve to solve customer and social issues, and contribute to development of ecosystems that grow with start-up companies.
Collaborations with startups
It goes without saying that we will strengthen collaboration with existing business partners, but we also want to move forward on working together with startup companies that are currently running hot. I want to build good partnerships by meeting directly with them, conversing and understanding the ideology of their business, then we need to display shared goals, enhance each other’s capabilities and align vectors while making them into Suzuki fans.
<R&D expenses, capital expenditures>
We will invest ¥2 trillion in R&D expenses and ¥2.5 trillion in capital expenditures, a total of ¥4.5 trillion by FY2030. Of the ¥4.5 trillion, ¥2 trillion will be electrification-related investments, of which ¥500 billion will be battery-related investments.
¥2 trillion is planned to be invested for R&D expenses in areas including carbon neutrality such as electrification and biogas, as well as autonomous driving.
¥2.5 trillion is planned to be invested for capital expenditures in facilities including construction of BEV battery plant and renewable energy facilities.
Expansion in India to support Suzuki’s growth
We started production in India in 1983 as a partner in India’s national car development initiative. To entrench the automobile production industry in India we did not simply supply parts from Japan, but based on the belief of nurturing an industry while valuing the community, invested in plants, built a network of local suppliers and set up a sales network. As a result, the growth of the Indian automobile industry and growth of Maruti Suzuki India aligned firmly and we could achieve steady growth.
However, as the market grew, competition intensified, and now our share of the Indian passenger car market is hovering at 41%. Looking ahead, as a strategy to regain a 50% market share, we will invest in new technology development for mobility production and to expand and augment the production structure. The Indian automobile market is forecast to grow even larger from now on, so Suzuki will need to set up a production scale of 4 million vehicles by 2030. Investment will need to go not only into objects such as plant construction and equipment installation, but it is also important to invest in human resource development such as for the people who will carry out operations, and Suzuki and Maruti Suzuki India are working as one on this.
A change in the production structure announced in July 2023 aims to further enhance competitiveness through more efficient production operations by having Maruti Suzuki India oversee all automobile production in India.
> See here for details on the Growth Strategy for FY2030.
A stepping stone to expansion in Africa, where growth can be expected
We aim to expand business in Africa, leveraging the knowledge of business models and product development cultivated in India. The population and nominal GDP of African countries are forecast to increase and we expect significant market growth in the future. In FY2022, we have already secured the No. 1 share in six countries. For the time being, we will use India as our production base and, working together with Toyota, supply India and Africa with products suited to them. We plan to focus on Africa to make it our next pillar after the Indian market, including consideration of building a plant there.