Suzuki 2005 Annual Report Download - page 21

SUZUKI MOTOR CORPORATION
the Suzuki Group. Furthermore, it is possible that unexpected changes in and adoptions of different tax systems in
each country also could affect our operating results.
In the past, the prices of our products have drastically fluctuated within a short period of time in certain markets.
These fluctuations were brought on by the various factors, such as sudden changes in demand, supply shortages
of parts and materials, unstable economic situations, revisions of import restrictions, and intensified price
competition. There is no guarantee that these fluctuations will reduce or that they will never occur in markets
where they have never occurred before. It is possible that drastic price fluctuations could damage the operating
results in any market where the Suzuki Group operates.
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 exchange fluctuations affect our business operations and our financial situation as well as our
competitiveness.
Furthermore, foreign exchange fluctuations affect the pricing of products sold in foreign currencies and the
purchasing price of materials. Overseas sales accounted for 62.2% of our consolidated net sales in the fiscal year
ending March 31,2005 and a large proportion of our transactions are denominated in foreign currencies, such as
the US dollar and the Euro. To reduce the risk of foreign exchange fluctuations, we utilize hedging instruments,
such as forward exchange contracts. However, it is impossible to hedge all risks. The appreciation of the Yen
against other currencies could possibly adversely affect our operating results.
The manufacturing of motorcycles, automobiles and outboard motors are subject to various laws and
regulations regarding exhaust emissions levels, fuel consumption, noise, safety and the amount of the output of
contaminated materials from plants. We can reasonably expect such regulations to be revised, and in many
cases, strengthened. Expenses for complying with such regulations could possibly impact the operating results of
the Suzuki Group.
Our main manufacturing bases in Japan are located primarily in the Tokai region in the mid-eastern part of
Japan. Other facilities such as the Company's head office are also concentrated in the same region. In the event
of disasters, such as earthquakes in the Tokai region or off the southeast coast of Japan, our operating results
could possibly be affected.Various preventative measures are put in place, including earthquake-proofing and
fire-proofing our buildings and facilities and acquiring earthquake insurance. Overseas, the Suzuki Group
operates in many countries and the occurrences of unexpected events such as natural disasters, diseases, wars,
terrorism and labor strikes could possibly cause delays and halt the purchasing of materials and parts,
manufacturing, sales and distribution of products, and provision of services. If these delays or interruptions occur
and if they are prolonged, they mayadversely affect the operating results of the Suzuki Group.
Other various risks not mentioned above also remain. Not all the risks for the Suzuki Group are listed here.
(5) Disasters, wars, terrorism and labor strikes
(4) Environmental restrictions
(3) Foreign exchange fluctuation
(2) Price fluctuation
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