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Exclusive: Suzuki eyes 30,000 sales and beyond

Next top model: Suzuki is expanding its range to cater for a wider Australian audience, and is negotiating with the Japanese factory for both the cheeky iM-4 and iK-2 models.

Local sales target downgraded from 40,000 for sustainable growth, says Suzuki

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Suzuki logo28 Jul 2015

SUZUKI has conducted a major review of its business in Australia and revised down its mid-term sales forecast to 30,000 units by 2017 – a figure it believes is more attainable and sustainable as fresh new models such as the resurrected Vitara SUV draw near.

In 2008, the Australian subsidiary of the Japanese car-maker detailed an ambitious plan to sell 40,000 vehicles annually within two years.

Suzuki took a hit during the global financial crisis, forcing local management to push the target – and an apparent top-10 position – back to 2017, but under general manager Andrew Moore, who took charge of the automobile side of the business a year ago, the company has now adjusted its sights to a three per cent market share, which is around 30,000 units.

Last year Suzuki sold just 17,422 vehicles, representing a 1.6 per cent share of the market and the first time it had fallen below 20,000 in eight years. However, a positive first half in 2015 – with sales up 14 per cent – and the imminent arrival of the all-new Vitara heralds a move in the right direction.

In an exclusive interview with GoAuto, Mr Moore said the company was applying an honest approach to sales forecasting that would produce more feasible and sustainable growth in the Australian market.

“Last year was a bit of a tough year for Suzuki, but we have picked things up,” he said.

“Our mid-term aim is to be around 30,000 units in 2017. What we’ve changed is, sustainability is a key thing and when I’m setting targets it’s not about picking a number and getting to it, because you see a lot of cars being reported falsely.

“I believe our business will be around 30,000 units but we want to get there in a sustainable fashion, so that when we get there we can keep growing.” Suzuki has been restricted in its local presence by a relatively small line-up, but under the recently announced global ‘Next 100’ mid-term management plan, 20 new models will be introduced over the next five years.

While not all of these will be sold here, a number of the emerging fleet will fit the Australian bill, starting with the all-new Vitara, a nameplate that returns to local showrooms after a 14-year absence.

Mr Moore explained that the good start to 2015 would “absolutely” continue, bolstered by the growing Australian range and an ambition to be a significant player in small-sized passenger car and SUV segments.

“Our targets are to build more, so in the back half of the year obviously we have Vitara launching in September,” he said.

“In the ‘Next 100’ management statement, the focus is on mini to C-segment passenger and SUV. That’s where Suzuki’s expertise is, so what we’ve got to do in Australia is say we want to be a leading brand in compact passenger and compact SUV.” Mr Moore said Suzuki Motor Corporation’s focus was clearly on ultra-mini-cars – “which aren’t relevant for Australia” through to C-segment (traditional small-sized) passenger cars and SUVs.

“Based on that I’m not forecasting new large cars coming so we’ve got to own this space,” he said.

“In compact passenger we want to be a leader. In compact SUV we are going to be the challenger brand pushing towards being a leader. That’s where Suzuki’s global strength is.” Mr Moore could not reveal which models would follow the Vitara but said Suzuki Australia was enthusiastic about the iM-4 compact SUV and iK-2 small hatchback, which have been chalked for production in other global markets.

The little iM-4 resembles the existing Jimny small SUV, but Mr Moore confirmed the two models would not compete and that Jimny was not due to be replaced.

“I’ve been over to Japan and requested the factory that I think those two cars would be ideal for Australia,” he said. “We are pushing the factory to develop those two vehicles for Australia. I’m hopeful we get them. The production cars are due in Europe later next year.

“From what I’ve seen of it (iM-4), it’s very different to Jimny. Jimny is a real off-roader and iM-4 is more of a crossover.” While the Grand Vitara’s days are numbered in Europe, Mr Moore confirmed that the larger and more off-road-capable wagon was safe in Australia and an updated model would be welcome.

“I’ve spoken to the new boss of Suzuki, Mr Toshihiro Suzuki, and said I’d love to see a true Grand Vitara model down the track, a bigger SUV with a possible seven-seat option,” he said. “That’s something we are asking the factory for.” In addition to the blossoming local range, another critical part of Suzuki's local growth strategy is to improve its customer satisfaction record through a strengthened local team and dependability of its vehicles.

Mr Moore said that while a capped-price servicing deal and five-year warranty was having the desired effect on the perception of the brand, the company was still “focusing very heavily on customer retention and loyalty”.

“Another key thing I’m heavily focused on is customer satisfaction,” he said. “We are really increasing our salesperson and service advisor training programs. We are now doing quarterly programs in every state as well as in-dealership activity where we get everyone together.

“The aim there is to be industry-leading in customer satisfaction. That’s important for customer retention. It’s something I have implemented in the last 12 months to help us get this growth. It’s fine to say that we’ve got new models coming and a huge retention opportunity, but you need happy customers.

“So as this ‘Next 100’ comes in and we get more new models the satisfied customers want to stay with the brand. As soon as you can give them something, they’ll come, and that’s what we haven’t been able to do.” While Suzuki has relatively short service intervals compared with the 12-month gaps of competing brands, Mr Moore explained that the more regular maintenance schedule was one of the main contributing factors to Suzuki reliability.

“We’ve got six-month intervals and the reason we’ve done that is, in reality, 12 months is too long,” he said. “So come in every six months and it will help the reliability. It was probably a bit of a risk but our service retention has gone through the roof since we’ve done it.

“Reliability is a key thing for us. Our dealers often complain that there’s no warranty money in Suzuki. They say, ‘It’s good, we love it, it’s just something that we have to factor in’.” Over the past four years, Suzuki has been dissolving a previous alliance with German car-making giant Volkswagen, but Mr Moore said a new collaboration with another brand would not be necessary to continue developing new vehicles or drivetrains.

“Suzuki’s target for 2019 is to be selling 3.4 million units globally,” he said. “We are already in the top 10 globally and that’s going to push us up further. I’m not convinced that you need a major partnership-type alliance. I’ ve got no issue with Suzuki standing on its own two feet.

“Producing so many cars out of India, there’s going to be opportunities to produce cars for us. The more they produce in India, the more development they are going to do and that’s more potential models for us.

“If they have cars that are very suitable for the Australian market and we can give a volume plan, I’m sure they would look at exporting. They loved exporting Altos to us.”

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