Suzuki 2006 Annual Report Download

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ANNUAL REPORT
2006

Table of contents

  • Page 1
    ANNUAL REPORT 2006

  • Page 2
    ... sales of small motor vehicles and larger motorcycles will continue. In European and North American markets, we will promote the introduction of products that enhance a "Sporty, Youthful, and Unique" brand image derived from our racing activities in order to build up a highly profitable motorcycle...

  • Page 3
    ...14 CORPORATE DATA _____ 14 MEMBERS OF THE BOARD AND AUDITORS ____ 14 MAJOR OVERSEAS SUBSIDIARIES _____ 14 THE STATUS OF THE CORPORATE GROUP __ 15 FINANCIAL SECTION _____ 18 Head Office & Takatsuka Plant Headquarters, Engineering center and Motorcycle engines assembling plant 2 SUZUKI MOTOR...

  • Page 4
    FINANCIAL HIGHLIGHTS SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Millions of yen (except per share amounts) Thousands of U.S. dollars (except per share amounts) Years ended March 31, 2006 and 2005 Net sales ...Net income ...Net income per share: Primary ...Fully diluted ...Cash dividends...

  • Page 5
    ... of yen) 2006 Net Sales By Market (Year ended March 31, 2006, Millions of yen) Other 65,206 2.4% Motorcycle 561,306 20.4% Other 165,496 6.0% North America 411,327 15.0% Europe 587,429 21.4% Japan 934,505 34.0% Automobile 2,119,940 77.2% Asia 647,695 23.6% 4 SUZUKI MOTOR CORPORATION

  • Page 6
    ... our top position in annual mini vehicle sales for the 33rd consecutive year. In the domestic standard and small car/vehicle segment market, we implemented full model changes to the "Escudo" (export name: "Grand Vitara") and added sport and special version of the "Swift" lineup, etc., to further...

  • Page 7
    ... mini vehicles sales for the third consecutive year. • The "Carry" also achieved top place in sales in the truck segment for the 35th consecutive year. Kosai Plant Passenger car assembling plant Iwata Plant Sport utility vehicle and commercial vehicle assembling plant Overseas Markets 1. Suzuki...

  • Page 8
    ..., is our first world strategic model to be produced and marketed globally. It has attained an extremely high reputation worldwide and won "Car of the Year" awards in several countries. Following the Swift, Suzuki introduced two more models in its global strategy. The new "Grand Vitara", the third...

  • Page 9
    YEAR IN REVIEW MOTORCYCLES Suzuki's worldwide manufacturing and sales Total overseas motorcycle production (including ATVs) in fiscal 2005 was 2,533,000 units, exceeding 102% compared to the previous year. Worldwide production, including production in Japan, increased to 3,138,000 units, 106% ...

  • Page 10
    ...% of the overall market, that started shipping to dealers from March 2006. We will expand on the number of dealers and models while evaluating market conditions. Toyokawa Plant Motorcycles and outboard motors assembling plant GSR600 GSX-R750 BANDIT1200S (GSF1200S) SUZUKI MOTOR CORPORATION 9

  • Page 11
    ... world for its excellent balance, the dynamic and stylish cruiser "Suzuki Boulevard M109R (Intruder M1800R)", and the "Burgman 400 (SKYWAVE 400)" premium scooter that lets you enjoy riding tandem. In ATV (All Terrain Vehicle) production, we started manufacturing of the "LT-R450", a new sport model...

  • Page 12
    ... to the previous year and net sales were 108% compared to the previous year. The increase in the number of units and sales amount were due to an increase in shipments of outboard motors, primarily to North America and Europe. Currently, the Suzuki 4-stroke outboard motor lineup ranges from the...

  • Page 13
    YEAR IN REVIEW OTHER TOPICS Environment As a general manufacturer of automobiles, motorcycles, outboard motors, etc., Suzuki is addressing environmental conservation at all stages-from development to disposal. In our design and development, in addition to conventional demands for enhanced safety, ...

  • Page 14
    ... at 2006 New York International Auto Show, will go into massproduction for North American market from 2006 at CAMI Automotive Inc. (Ontario, Canada), a joint venture with GM. XL7 will use the GM-designed new V6 engine (3.6L) to be produced at Suzuki's Sagara plant in Shizuoka, Japan from June 2006...

  • Page 15
    ...American Suzuki Motor Corporation 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, Pakistan Pak Suzuki Motor Co., Ltd. Karachi, Pakistan P.T. Indomobil Suzuki...

  • Page 16
    ... corporate group The corporate group of the Company consists of subsidiaries of 136 companies and affiliates of 25. The main businesses are manufacturing and marketing of motorcycles, automobiles, marine & power products, motorized wheelchairs, electro senior vehicles and houses, further developing...

  • Page 17
    SUZUKI MOTOR CORPORATION  17 

  • Page 18
    ... SECTION CONTENTS MANAGEMENT POLICY ...19 FINANCIAL REVIEW ...24 FIVE-YEAR SUMMARY ...27 CONSOLIDATED FINANCIAL STATEMENTS OF 2006 CONSOLIDATED BALANCE SHEETS ...28 CONSOLIDATED STATEMENTS OF INCOME ...30 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ...31 CONSOLIDATED STATEMENTS OF CASH FLOWS...

  • Page 19
    ... 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, and are therefore subject to exchange rate fluctuations...

  • Page 20
    ...and products supply in a close contact with the market will be executed. In domestic market, the Company will make efforts to reinforce the sales force by increasing and training sales persons, also to build and enhance "Suzuki Arena Shops", for further expansion of market share. In overseas markets...

  • Page 21
    ...growth with twenty-nine directors. Under rapid increase of overseas production and sales, the Company established the "Suzuki Medium-term 5year Plan (April, 2005 - March, 2010)" one year ago for continuing growth of Suzuki group. On the occasion of enforcement of the Corporation Law (Kaisha-hou), in...

  • Page 22
    ..."Suzuki Corporate Ethics Rules", the Company has developed compliance system for employees including internal report system, and has educated them through various training and in-house seminars regarding compliance. And, in accordance with the "Rule of Internal Auditing", the audit department audits...

  • Page 23
    ... department helps to make rules for the subsidiaries and affiliates, conducts guidance, supporting and auditing for their regulatory compliance. It also promotes efficiency and standardization of their business. (4) Remuneration for directors Remuneration paid to directors and corporate auditors...

  • Page 24
    ... of "Swift" at "Magyar Suzuki Ltd.", and start of production of new sports crossover vehicle "SX 4", and other expenses. (c) North America Net sales amounted to 392,885 million yen (129.4% as against PFY) by introduction of new SUV "Grand Vitara"and good selling of large size motorcycle model. Also...

  • Page 25
    ... yen on a number of initiatives, such as new model production, production volume increase, rationalization, R&D for new models and technical innovation, distribution, sales channel and IT related investments. These costs were covered by retained earnings. Planned capital expenditure spending for...

  • Page 26
    ...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 27
    ... auditors and the payment of dividends to shareholders of preferred stocks are excluded from net income shown in the income statements from the year of 2003 in accordance with the revision of regulations of financial statements. The figures for 2002 is not restated. SUZUKI MOTOR CORPORATION  27...

  • Page 28
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 CONSOLIDATED BALANCE SHEETS As of March 31, 2006 and 2005 SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Millions of yen Thousands of U.S. dollars 2006 2005 2006 ASSETS Current assets: Cash and time deposits *NOTE 10 ...Marketable securities *...

  • Page 29
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 Millions of yen Thousands of U.S. dollars 2006 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 ...

  • Page 30
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 CONSOLIDATED STATEMENTS OF INCOME Years ended March 31, 2006 and 2005 SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Millions of yen Thousands of U.S. dollars 2006 ¥2,746,453 2,032,732 713,721 599,855 113,865 2005 ¥2,365,571 1,734,615 630,956...

  • Page 31
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Years ended March 31, 2006 and 2005 SUZUKI MOTOR CORPORATION AND CONSOLIDATED SUBSIDIARIES Thousands of shares of common stock Millions of yen Common stock Additional paid-in capital Consolidated retained ...

  • Page 32
    ... (decreased) Cash and cash equivalents at beginning of year Increase by inclusion of newly consolidated subsidiaries Cash and cash equivalents at end of year The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.  32  SUZUKI MOTOR CORPORATION

  • Page 33
    ... subsidiaries, their fiscal year end is December 31. "American Suzuki Motor Corporation" and the other 11 companies within above-mentioned 50 companies, their accounts were consolidated based on their financial statements by the preliminary settlement as of March 31,2006. (b) Allowance for doubtful...

  • Page 34
    ... use of different rates are presented as "foreign currency translation adjustments" in the shareholders' equity. (i) Inventories Inventories are stated at the lower of cost or market value, cost being determined principally by the periodic average method. (j) Property, plant and equipment Property...

  • Page 35
    ... investment policies of pension assets of each pension system etc. Decreased yield on long-term bond leads to a decrease in discount rate and has an adverse influence on the calculation of retirement benefit cost. However, the pension system adopted by the Company has a cash balance type plan, and...

  • Page 36
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 NOTE 4: Marketable securities and investments in securities (a) Marketable securities and investments in securities quoted at an exchange as of March 31, 2006 and 2005 Millions of yen Acquisition Cost 2006 Amounts for BS Valuation Those whose amount for BS...

  • Page 37
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 (b) Other securities sold during 2006 and 2005 Millions of yen Thousands of U.S. dollars 2006 Amounts sold ...Gains from sales of the other securities ...Losses from sales of the other securities ...(c) Major securities not revalued by the market ¥98,361 ...

  • Page 38
    ... at the conversion price of ¥2,000 per share. If the outstanding convertible bonds were fully converted as of March 31, 2006, 14,995,500 additional shares of common stock would be issued. As is customary in Japan, both short-term and long-term bank loans are subject to general agreements which...

  • Page 39
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 The aggregate annual maturities of long-term debt outstanding as of March 31, 2006 were as follows: Year ending March 31 2007 ...2008 ...2009 ...2010 ...Thereafter ...Millions of yen Thousands of U.S. dollars ¥ 801 1,068 2,329 39,542 28,654 $ 6,818 9,...

  • Page 40
    ... b. Discount rate : 2006 2.00% 2005 2.00% : 2006 0.23% - 1.50% 2005 0.23% - 1.50% : Mainly 15 years To be amortized by straight line method with the employees' average remaining service years at the time when the difference was caused. c. Assumed return of investment ratio d. Number of years for...

  • Page 41
    ... and development costs included in manufacturing cost and selling, general and administrative expenses, for the years ended March 31, 2006 and 2005 were as follows: Thousands of U.S. dollars Millions of yen 2006 Research and development costs ...¥89,917 2005 ¥86,856 2006 $765,446 SUZUKI MOTOR...

  • Page 42
    ... FINANCIAL STATEMENTS OF 2006 NOTE 10: Cash and cash equivalents Cash and cash equivalents as of March 31, 2006 and 2005 consisted of: Millions of yen Thousands of U.S. dollars 2006 Cash and time deposits ...Marketable securities ...Time deposits with maturities of over three months .. Marketable...

  • Page 43
    ...¥ 46 70 ¥117 2006 $457 311 $769 NOTE 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 in...

  • Page 44
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 NOTE 14: Segment Information (a) Business segment Millions of yen 2006 Motorcycle Net sales: Outside customers ...Inter-area ...Operating expenses ...Operating income ...Assets ...Depreciation ...Loss of impairment ...Capital expenditures ...Â¥561,306 - ...

  • Page 45
    CONSOLIDATED FINANCIAL STATEMENTS OF 2006 (b) Geographical segment Millions of yen 2006 Elimination and Japan Net sales: Outside customers ...Inter-area ...Operating expenses ...Operating income ...Assets ... Europe North America Asia Other areas*1 corporate assets Consolidated ¥1,230,148 ...

  • Page 46
    ... was approved by the ordinary general meeting of shareholders of the Company held on June 29, 2006: Millions of yen Thousands of U.S. dollars Year-end cash dividends ...Bonuses for directors and corporate auditors ... ¥2,647 260 ¥2,907 $22,541 2,213 $24,754  46  SUZUKI MOTOR CORPORATION

  • Page 47
    ... of the right Common stock of Suzuki b) Issued number of the right 30,000 units c) Conversion price ¥ 3,054 per share d) Term of exercise From August 1, 2006 to March 28, 2013 8) Due date of payment (issuing date) June 27, 2006 9) Security unsecured 10) Purpose of use of cash The Company will...

  • Page 48
    ... with accounting principles and practices generally accepted in Japan. As describe in Note 15(b), Suzuki Motor Corporation issued the unsecured zero coupon convertible bonds with 130% call option, based on the resolution of meeting of the board of directors at June 2, 2006. The amounts expressed in...

  • Page 49
    NON-CONSOLIDATED FINANCIAL STATEMENTS OF 2006 NON-CONSOLIDATED BALANCE SHEETS As of March 31, 2006 and 2005 Millions of yen Thousands of U.S. dollars SUZUKI MOTOR CORPORATION 2006 ASSETS Current assets: Cash and time deposits ...Marketable securities ...Receivables: Trade notes and accounts ......

  • Page 50
    ... FINANCIAL STATEMENTS OF 2006 Millions of yen Thousands of U.S. dollars 2006 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term bank loans ...Payables: Trade notes and accounts ...Subsidiaries and affiliates ...Accrued expenses ...Accrued income taxes ...Other current...

  • Page 51
    ... FINANCIAL STATEMENTS OF 2006 NON-CONSOLIDATED STATEMENTS OF INCOME Years ended March 31, 2006 and 2005 SUZUKI MOTOR CORPORATION Millions of yen Thousands of U.S. dollars 2006 Net sales ...Cost of sales ...Gross profit ...¥1,690,169 1,307,129 383,039 2005 ¥1,481,632 1,140,043 341,588 2006...

  • Page 52

  • Page 53
    300 TAKATSUKA, HAMAMATSU, JAPAN ANNUAL REPORT 2006 99999-E2062-206 Printed in Japan