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Credit squeezed but Suzuki loosens its belt

Here in May: Alto will set new benchmarks with a circa-$11,000 pricetag.

Suzuki is confident its small car and SUV range will defy the economic downturn

16 Oct 2008

WITH the gloom of financial market woes reaching the Australian car industry, there is at least one company that is confident it is in the right position to weather the financial storm.

Suzuki Australia managing director Tony Devers says that he is confident in Suzuki’s ability to post strong sales numbers, despite the downturn.

“We’re a bit unusual because we’re seven per cent up on where we were last year (while) the market’s a half a per cent down and dropping. We will continue to increase on last year.”

Mr Devers says a major reason why Suzuki is in a good position is that it has the right product mix for a market keen to downsize.

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“We are doing better than most, because we’ve got the smaller cars, the smaller engines.”

While Mr Devers does not deny that global finance problems are affecting the market, he believes that with some prudence and careful stock management his company will be in a good position.

“We’ve got a lot of fairly substantial dealers... and we don’t have a problem with inventory. I know a lot of companies that do”.

Yet Mr Devers pointed to an issue that is not directly related to his network but could have an impact on them - finance. He says that given recent events, Suzuki is reviewing all its dealers’ relationships with their finance companies.

Mr Devers is concerned that the local dealers may suffer through no fault of their own, but through external finance company difficulties.

“A lot of our dealers are with American-based [finance companies] - we have to just make sure that those companies don’t make decisions based in America [without reference to] what’s happening in Australia." Mr Devers also said that the credit squeeze would have some effect the market at several levels.

“I know that all finance companies are looking at it. From a retail point of view, they don’t want to know anybody that’s got bad debt.

"Previously, if someone had a telecom bill they hadn’t paid - that’s no worries, but now they’re questioning everything, so it’s going to be harder for people to get finance to buy cars. Of course dealer’s floor plans, they’re putting their rates up to get more money, things like that.

Mr Devers said it was a learning phase for everybody: “It’s all part of doing business now - it has all changed dramatically.”

Read more:

Sydney show: Suzuki spreads

Suzuki wishing on A-Star

First look: Alto emerges as sub-Swift Suzuki hope

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