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ANNUAL REPORT
2005
S U Z U K I MO T O R C O R P O R A T IO N

Table of contents

  • Page 1
    ANNUAL REPORT 2005

  • Page 2
    ...CORPORATION 1 In terms of motorcycles, in Japan, efforts will continue in order to expand sales of small motor vehicles and larger motorcycles. In Asia, expansion of sales of smaller motorcycles will be promoted, and expanded sales of larger motorcycles will be promoted in the North American market...

  • Page 3
    Osamu Suzuki Chairman&CEO Hiroshi Tsuda President&COO PROFILE Suzuki Motor Corporation designs and manufactures passenger cars, commercial vehicles, motorcycles, All Terrain Vehicles(ATVs), outboard motors, and other products. The company continuously and vigorously promotes technical cooperation ...

  • Page 4
    FINANCIAL HIGHLIGHTS Millions of yen (except per share amounts) Thousands of U.S. dollars (except per share amounts) SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Years ended March 31, 2005 and 2004 Net sales ...Net income ...Net income per share: Primary ...Fully diluted ...Cash dividends...

  • Page 5
    ... 2002 2003 2004 2005 2005 Net Sales By Business (Years ended March 31, 2005, Millions of yen) 2005 Net Sales By Market (Years ended March 31, 2005, Millions of yen) Other sales Motorcycle sales 460,568 19.5% 59,240 2.5% Other sales Sales in North America 125,701 5% 324,244 14% Sales in Japan...

  • Page 6
    ... truck segment for the 34th consecutive year. In January 2005, importing and sales began of the "Chevrolet Optra", and the product lineup was ALTO WAGON R strengthened. AERIO(Export name :LIANA) SUZUKI MOTOR CORPORATION JIMNY 5 APV(manufactured at P.T.Indomobile Suzuki International in Indonesia...

  • Page 7
    ... with a number of interesting plans. August 2004 saw the start of production began in Indonesia of the new "APV" multipurpose vehicle. This vehicle represents a new challenge for Suzuki, in that this is the first time, the company has ever positioned the mother plant outside Japan--in Indonesia--and...

  • Page 8
    ... the introduction and increasing sales of the new "Let's 4" scooter and "DRZ400SM" on-road sports bike worked to turn things around somewhat in the latter half of the year in terms of segment revenue. Birdie(FB50) Let's4(UZ50) Address V125(UZ125G) SUZUKI MOTOR CORPORATION 7 DR-Z400SM SKYWAVE650...

  • Page 9
    ... can expect great results in the coming season. GSX-R1000 SUZUKI BOULEVARD M50/Intruder M800(VZ800) Bandit 650/S(GSF650/S) KING QUAD 700(LT-A700X) Best/Shogun 125(FD125X) (Developed by Suzuki Motor R&D Asia Co.,Ltd) RM-Z450(racing machine) 8 GSX-R1000(racing machine) SUZUKI MOTOR CORPORATION

  • Page 10
    ... in number of units and sales amount were due to favorable of Suzuki brand outboard motors, primarily to Europe. At the Miami International Boat Show held in February 2005, the DF150 (110.0kW, 150 horsepower ) and the DF175 (129.0kW, 175 horsepower ) debuted as Suzuki's new models for 2006. Sale of...

  • Page 11
    ..., and promoting green procurement. In our marketing, in addition to promoting proper treatment of used products and components, we are providing our sales network with dismantling manuals, and other information, which can be useful in such operations. In our distribution and office work, we...

  • Page 12
    ...-up the Chevrolet Optra Sedan in January 2005 and its Station Wagon in February. In August 2003, Suzuki began selling 2.5L passenger car Verona and 2.0L passenger car Forenza series (Sedan/ Hatch Back/ Wagon), made by GM-Daewoo Auto & Technology in Korea, at American Suzuki Motor Corporation. And in...

  • Page 13
    ... GB PLC West Sussex, United Kingdom Suzuki Motor Poland SP.Z.O.O. Warszawa, Poland American Suzuki Motor Corp. California, U.S.A. Suzuki Manufacturing of America Corporation Georgia, U.S.A. Suzuki Canada Inc. Ontario, Canada Maruti Udyog Ltd. New Delhi, India Suzuki Motorcycles Pakistan Ltd. Karachi...

  • Page 14
    .... Maruti Udyog Ltd. PT. Indomobil Suzuki International and other 4 companies (Companies in the application of the equity method) CAMI Automotive Inc. and other 11 companies Marketing companies: (Consolidated subsidiaries) Suzuki Motor Sales Kinki Inc. Suzuki Motor Sales Tokyo Inc. American Suzuki...

  • Page 15
    ... MANAGEMENT POLICY FINANCIAL REVIEW FIVE-YEAR SUMMARY CONSOLIDATED FINANCIAL STATEMENTS OF 2005 CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONSOLIDATES FINANCIAL STATEMENTS REPORT...

  • Page 16
    ... internal reserves can be improved as a basis for enhancing our corporate structure to allow us to expand our business operations in the future. The Suzuki Group has a structure in which profits are highly dependent on overseas manufacturing plants. These are mainly located in developing countries...

  • Page 17
    ... motorcycle operations for the domestic market, we will promote sales increases of our motor driven cycles as well as drive sales of our large-size models. In overseas markets, we will try to boost sales of small-size models in Asia, and large-size models in the European and North American markets...

  • Page 18
    ... the board of directors. (3) Independent auditors Seimei Audit Corporation is assigned as an independent auditor for the Company. Corporate auditors, an internal audit group and the independent auditor create a closer connection by exchanging information whenever the need arises. Name of Engagement...

  • Page 19
    ... in automobile sales at "American Suzuki Motor Corporation". (d) Asia Net sales amounted to 500,062 million yen (107.6% as against PFY) due to increased sales at overseas manufacturing companies such as "Maruti Udyog Limited" in India and "PT Indomobile Suzuki International" in Indonesia and...

  • Page 20
    ..., such as motorcycles,automobiles and outboard motors and will adversely affect the business performances of the Suzuki Group. The Suzuki Group has business operations all over the world and our dependence on overseas manufacturing plants, especially in developing countries in the Asian region, has...

  • Page 21
    ...in any market where the Suzuki Group operates. (3) Foreign exchange fluctuation The Company exports motorcycles, automobiles, outboard motors and their parts, from Japan to many countries in the world. Our overseas manufacturing bases also export products and parts to a number of countries. Foreign...

  • Page 22
    ... exchange rate as of March 31, 2005. The treasury stock indicated on the column of non-consolidated current assets up to the year of 2001 is listed on the column of shareholders' equity from the year of 2002 in accordance with the revision of regulations of financial statements. Calculation...

  • Page 23
    CONSOLIDATED FINANCIAL STATEMENTS OF 2005 CONSOLIDATED BALANCE SHEETS As of March 31, 2005 and 2004 SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Millions of yen Thousands of U.S. dollars 2005 2004 2005 ASSETS Current assets: Cash and time deposits (Note 10)...Marketable securities (...

  • Page 24
    ... U.S. dollars 2005 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade notes and accounts payable ...Short-term bank loans (Note 5) ...Current portion of long-term debt (Note 5)...Accrued income taxes...Accrued expenses ...Other current liabilities ...Total current liabilities Long-term...

  • Page 25
    CONSOLIDATED STATEMENTS OF INCOME Years ended March 31, 2005 and 2004 SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Millions of yen Thousands of U.S. dollars 2005 2,365,571 1,734,615 630,956 523,413 107,542 2004 2005 Net sales ...Cost of sales ...Gross profit ...Selling, general and ...

  • Page 26
    ...31, 2005 and 2004 SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Thousands of shares of common stock Common stock Millions Additional paid-in capital of yen Consolidated retained earnings Treasury stock at cost Balance as of March 31, 2003 Net income ...Cash dividends...Directors' and...

  • Page 27
    ... as of March 31, 2005 542,647 $1,119,380 $1,178,681 $4,265,848 563,428 (44,809) (1,862) 1 $ (79,515) (60,429) 542,647 $1,119,380 $1,178,682 $4,782,604 $(139,944) The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. SUZUKI MOTOR CORPORATION 27

  • Page 28
    CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended March 31, 2005 and 2004 Millions of yen Thousands of U.S. dollars SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES 2005 107,054 97,731 3,774 (3,504) (2,031) (8,394) 3,237 (1,312) (27,146) 54,948 27,468 251,825 7,964 (2,893) (44,468) 212,427...

  • Page 29
    ...financial statements of Suzuki Motor Corporation (the Company) have been prepared on the basis of generally accepted accounting principles and practices in Japan, and the consolidated financial statements were filed with the Ministry of Finance as required by the Securities and Exchange Law of Japan...

  • Page 30
    ...CONSOLIDATED FINANCIAL STATEMENTS (c)Reserve for warranty costs The reserve for warranty costs is appropriated into the account to allow for an estimated costs related to maintenance services of the products sold. This estimate, which is affected by the actual defect ratio of products and repairing...

  • Page 31
    ... Effective from the fiscal year ending March 31, 2004, the Company and its subsidiaries have adopted "Accounting Standards for Impairment of Fixed Assets"(Opinion on Establishing Accounting Standards for Impairment of Fixed Assets, issued by Accounting Standards Board of Japan on August 9, 2002) and...

  • Page 32
    ... paid at the end of year is posted pursuant to the Company's regulations on the retirement allowance of directors. Retirement benefit cost and retirement benefit obligation are calculated on the actuarial assumptions, which include discount rate, assumed return of investment ratio, revaluation ratio...

  • Page 33
    ...of March 31, 2005 and 2004 were as follows: Thousands of U.S. dollars Millions of yen 2005 Finished products ...Work in process ...Raw materials and others ...229,098 17,063 41,615 287,777 2004 211,619 12,902 29,313 253,835 2005 $2,133,327 158,897 387,513 $2,679,738 SUZUKI MOTOR CORPORATION 33

  • Page 34
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Marketable securities and investments in securities (a) Marketable securities and investments in securities quoted at an exchange as of March 31, 2005 and 2004 Millions of yen Acquisition Cost 2005 Amounts for BS Valuation Those whose amount for BS ...

  • Page 35
    ...,242 501 2004 Other securities Commercial paper...Unlisted stock ...(Stocks traded over the counter are excluded.) Bonds ... 39,986 24,100 1,584 (d)The amounts to be redeemed after the closing date of securities with maturities among other securities Millions of yen Within one year 2005 More than...

  • Page 36
    ...zero coupon convertible bonds are convertible into common stock at the options of holders at the conversion price of 2,000 per share. If the outstanding convertible bonds were fully converted as of March 31, 2005, 15,000,000 additional shares of common stock would be issued. As is customary in Japan...

  • Page 37
    ... financing. The outstanding balance of this contract as of March 31, 2005 and 2004 were as follows. Millions of yen Thousands of U.S. dollars Commitment contract total ...Actual loan balance ...Variance 2005 100,000 100,000 2004 100,000 100,000 2005 $931,185 $931,185 SUZUKI MOTOR CORPORATION...

  • Page 38
    ... (718) 7,778 (88) 7,689 2004 6,077 2,033 (722) 1,858 (313) 8,934 1,684 10,618 2005 $56,806 13,692 (956) 9,584 (6,692) $72,434 (826) $71,608 Remarks: The retirement benefit cost of subsidiaries where simplified methods are adopted is accounted for "a. Service cost". 38 SUZUKI MOTOR CORPORATION

  • Page 39
    ... b. Discount rate : 2005 2.00% 2004 2.00% c. Assumed return of investment ratio : 2005 0.23% -1.50 % 2004 0.23% -4.39 % d. Number of years for amortization of prior service cost : Mainly 15 years To be amortized by straight line method with the employees' average remaining service years at the time...

  • Page 40
    ... securities ...Time deposits with maturities of over three months Marketable securities with maturities of over three months 248,679 79,794 (55,013) (42,062) 231,397 2004 169,539 97,900 (25,654) (53,525) 188,259 2005 $2,315,670 743,030 (512,277) (391,683) $2,154,739 40 SUZUKI MOTOR CORPORATION

  • Page 41
    ...TO CONSOLIDATED FINANCIAL STATEMENTS 11. Lease transactions Finance lease transactions, except for those which meet the conditions that the ownership of the leased assets was substantially transferred to the lessee, as of March 31, 2005 and 2004 were as follows: As a lessee (1)Amounts equivalent to...

  • Page 42
    ...117 2004 51 98 150 2005 $ 436 653 $1,090 12. Shareholders' equity The Commercial Code requires that at least 50% of the issue price of new shares be included in a company's stated capital. The portion to be recorded as stated capital is determined by resolution of the Board of Directors. Proceeds...

  • Page 43
    ...FINANCIAL STATEMENTS 14. Segment Information (a) Business segment Millions of yen 2005 Motorcycle Net sales...Elimination and corporate assets Consolidated 2,365,571 2,365,571 2,258,028 107,542 322,078 1,693,353 97,731 3,774 136,049 2004 Motorcycle Net sales... 1,079,924 SUZUKI MOTOR CORPORATION 43

  • Page 44
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (b) Geographical segment Millions of yen 2005 Japan Net sales: Outside customers ...Inter-area ...Operating expenses ...Operating income ...Assets ...Europe North America Asia Elimination and Other areas*1 corporate assets Consolidated 1,143,813 476,073 ...

  • Page 45
    ... ...Bonuses for directors and corporate auditors ... 3,195 200 3,395 $29,753 1,862 $31,615 (b) The Company established a subsidiary company with the aim of group finance and fund integration of the main European subsidiaries. Outline of new company: Company Name: Suzuki Finance Europe B.V. Address...

  • Page 46
    ... Suzuki Motor Corporation and its subsidiaries as of March 31, 2005 and 2004, and the related consolidated statements of income, shareholders' equity, and cash flows for the years then ended, all expressed in Japanese Yen. These consolidated financial statements are the responsibility of the Company...

  • Page 47
    NON-CONSOLIDATED FINANCIAL STATEMENTS OF 2005 NON-CONSOLIDATED BALANCE SHEETS As of March 31, 2005 and 2004 SUZUKI MOTOR CORPORATION Millions of yen Thousands of U.S. dollars 2005 ASSETS Current assets: Cash and time deposits ...Marketable securities ...Receivables: Trade notes and accounts ......

  • Page 48
    ... dollars 2005 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt ...Payables: Trade notes and accounts ...Subsidiaries and affiliates ...Accrued expenses ...Accrued income taxes ...Other current liabilities ...Total current liabilities 2004 2005 15,000...

  • Page 49
    ... STATEMENTS OF INCOME Years ended March 31, 2005 and 2004 SUZUKI MOTOR CORPORATION Millions of yen Thousands of U.S. dollars 2005 Net sales ...Cost of sales ...Gross profit ... 2004 2005 1,481,632 1,140,043 341,588 1,392,688 $13,796,747 10,615,920 1,065,170 327,518 3,180,826 Selling...

  • Page 50
    300 TAKATSUKA, HAMAMATSU, JAPAN ANNUAL REPORT 2004 99999-E2062-204 Printed in Japan