Suzuki, the Japanese small car specialist 20% owned by General Motors, is taking full advantage of the emerging Asian automotive market where demand for newer models is booming. The company has reported record net profits while predicting record sales for this year.
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Despite the fact that market development forecasts in Asia remain somewhat unreliable, the manufacturer is eager to continue investing in the region. A rise in demand for the newest models from more affluent customers is even resulting in a change of Suzuki’s strategy in India and China, where Suzuki is to trial launch an upcoming new model.
The alliance between GM and Suzuki, which has led the Japanese minicar market for many years, has largely been beneficial for GM’s growth strategy in that region, as it was able to expand in the small car segment. With Suzuki now trying to improve its position on the ultra competitive US market, it seems that close cooperation between the two will be equally helpful for the Japanese manufacturer.
To reach its target of tripling its US car and truck sales by 2007, Suzuki is planning to modernise its line-up by launching nine new or redesigned models, many of which will be built or revamped by affiliate GM Daewoo. To change perceptions of the Suzuki brand and clearly differentiate all its newly launched models, the manufacturer is also increasing its marketing spend from $US56 million last year to $100 million in 2004.
Cooperation with GM is essential for Suzuki to become a mainstream player in the US. Cracking the American market is no easy task, and Suzuki is right to concentrate on overhauling its brand. Yet Japanese carmakers currently enjoy significantly greater credibility in the US than has traditionally been the case, and with positive feedback on quality and price from its recent Forenza model, Suzuki is on the way to becoming a serious contender in the premium compact segment.
