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Suzuki’s Alto on the up

Alternative: Suzuki Alto might be more costly - but still cheap.

Australia’s first sub-light car won’t be as cheap as expected, says Suzuki

3 Mar 2009

THE price of Australia’s first micro-car has increased before Suzuki’s all-new Alto hatch has even arrived, but the Teflon-coated Japanese brand insists our first sub-light model will still set new price benchmarks when it goes on sale here in July 2009.

Suzuki Australia had targeted a starting price of $13,000 for its Japanese-designed, Indian-built five-door runabout, but says the weaker Australian dollar will make higher pricing likely for both the Alto and other small vehicles, including sub-light models under consideration by Toyota (iQ), Holden (Spark), Ford (Ka) and Hyundai (i10).

The Korean maker’s light-sized 1.4-litre Getz S three-door is Australia’s least expensive car at $13,990 and China’s Chery and Lifan brands are expected to lower that mark this year – but only if the Australian dollar is consistently higher against the US dollar and Chinese yuan, or rival model prices increase sufficiently.

Either way, general manager Tony Devers says Suzuki Australia will be ready to launch the Alto in five months, even if it is more expensive than planned.

“That ($13,000) is where we wanted to be,” said Mr Devers after revealing the 1.0-litre Alto will come standard with six airbags, while electronic stability control (ESC) will be available on flagship versions, at Friday’s Melbourne Motor Show opening.

“But obviously you look at the exchange rates globally and everybody’s in the same boat. We wanted to be lower than our competitors and we will be, but we just can’t put a price on it now with the volatility of exchange rates.”

30 center imageMr Devers said that although the Aussie dollar had improved against the US dollar – the currency with which it will source the Alto from India – it was still short of the value on which Suzuki based its $13,000 target price.

“(The Aussie dollar) is up to 65 (US cents) today, but we need it at about 70 to price Alto exactly where we really wanted it.

“This week it would be higher than we wanted it, but last week it would have been even higher, so everyone will be in the same boat. If we’re there, our competitors will be there. They’re all buying the same, whether it’s the yen or the US (dollar).” The Swift light hatch is currently Suzuki’s most affordable model, priced from $16,490. That’s up from $15,990 in January, when Toyota raised the starting price of its top-selling Yaris light-car to $15,690, as part of a widespread 2009 price increase.

Mr Devers said the Alto, which is already on sale in Europe, would offer the fuel economy of a hybrid at about a third of the price. The 3.5-metre Alto will be powered by a 50kW/90Nm 1.0-litre three-cylinder petrol engine that makes it almost efficient as Toyota’s Prius at 4.5L/100km.

“We want to be able to price it so people can get into it at the right price. We want this fuel efficiency and eco-friendliness to be available to everybody. At around $13,000 it’s going to be more affordable than a Prius or an Insight.

“This is a new segment in Australia. It will be a tough assignment to develop this new sub-light car segment and we know many other manufacturers are watching our progress. Rest assured the Alto, like all Suzuki products, will represent real value for money.”

The Suzuki front-man said the Japanese small-car maker, which sold two million vehicles globally last year, will target young singles and empty-nesters with the Alto.

“Consider that profile and you’ll see why Suzuki can’t wait for its newest addition to its stable,” adding that Suzuki’s original projection of 7000 to 8000 annual Alto sales was made “when the market was a bit different”.

Nonetheless, he hopes the brand’s fifth and smallest model will help Suzuki maintain its 2008 sales volume of 22,500 in a market that he believes will be a further 15 per cent down overall this year.

“Our sales were 16 per cent up last year and 11 per cent up in January so we’re still going okay. We’re increasing market share. But to put a number on how many we could do in this market would be crazy.

“We’re looking to maintain volume this year, which in essence will give us an increase in market share. In January, we were already at a 2.4 per cent market share, so I’d suggest it will be closer to three per cent if we maintain volume,” he said.

Mr Devers said Suzuki may eliminate some model variants in its range, to reduce the size of its inventory levels, by culling versions of the SX4 and Grand Vitara.

“We’re looking at rationalising our model range. We don’t have lot of models – we only participate in 45 per cent of the market – but we’re looking at whether we need four variants of SX4, or whether the Grand Vitara has both steel wheels and alloy wheels, for example.”

Suzuki has delayed the scheduled 2010 opening of a new Thailand plant that could potentially have produced models for Australia including the European-oriented Splash city-car, as well as postponed plans to release a seven-seat SUV replacement for the XL-7 in 2011.

As we reported in January, Suzuki has also delayed the introduction of a new V6 engine in the all-new Kizashi mid-size sedan, which will be a direct rival for the Mazda6, Honda Accord Euro and, to a lesser extent, Toyota’s top-selling Camry.

However, Mr Devers said Suzuki’s sixth and largest model is still on target to arrive in early 2010 with 2.4-litre four-cylinder power – priced between $30,000 and, potentially, $45,000 if it can secure Japan’s flagship all-wheel drive model.

“We’re launching with the four-cylinder variant because Suzuki decided to go with the volume version, which I think is logical.

“There will be two variants including an up-spec all-wheel drive, but whether we can get it into our market we don’t know yet – the engineers are working on it,” said Mr Devers.

The production Kizashi is due to appear in final production form at the New York motor show in April, with production for Australia beginning just a month after European exports commence in October.

“Australia will be among the first markets in the world to receive the Kizashi,” he said. “We’re one of the few markets for Suzuki that are actually growing globally so they have a lot of confidence in us and are giving us a lot more support and emphasis.

“Mazda6 is probably the benchmark in that segment, so if we can get a tiny share of that we’d be happy.

“Our volume is still quite small but everything helps and when they see our volume growing by 10 pent a year they’re looking at us, which is good and bad,” said Mr Devers.

Read more:

Suzuki Australia is on Splash watch


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