Suzuki 2006 Annual Report Download - page 19

SUZUKI MOTOR CORPORATION
1. Business operations basic policy
Ever since establishment, the Suzuki Group has maintained a basic policy of making “value-packed products” to give
our customers satisfaction. The opening paragraph of our company’s mission statement promises that we will “develop
products of superior quality by focusing on the customer”. Of course, the value of a product varies with the times as well
as the differences between countries and in lifestyles. By keeping on top of the dynamic changes occurring in the
marketplace, we strive to create products of real value, products that are always designed to win our customers’
approval.
We commits itself to make efforts to promote the “production of mini, small and subcompact vehicles” and the
“development of environmentally benign products” needed by customers, and to be small, less, light, short and beautiful
on every side of organization, facilities, parts, environment and so on as well as production, with the slogan, “Small Cars
for a Big Future”, and has been working for the efficient, well-knit and healthy management.
2. Profit sharing basic policy
The Company’s basic profit sharing policy is focused on maintaining a continuous and stable payout of dividends. At
the same time however, from a middle- and long-term perspective, we are always looking at how to improve our
performance, how to increase the dividend payout ratio and how 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, and are therefore subject to exchange rate fluctuations. We have plans to
actively develop and increase our investment in these overseas manufacturing plants. To achieve stable growth, we
need to further enhance our corporate structure and prepare for unforeseen circumstances.
Under those circumstances, we have paid 10.00 yen per share as common dividends (including interim dividends of
5.00 yen) and, in addition, 1.00 yen as special dividends for the current fiscal year, to reimburse the saved amount of
dividends by acquisition of treasury stock to our shareholders. Therefore, total dividends are 11.00 yen per share.
As a result, the current fiscal year’s dividend payout ratio is 15.5% and the dividend rate of shareholders’ equity is
1.5%.
Note: “the Company” = Suzuki Motor Corporation
3. Perspectives and policy for lowering the investment unit of shares
The Company recognizes that improvement in share liquidity and increasing the number of individual shareholders
are significant issues for achieving a fair price for our shares. Therefore, we have improved the market environment for
investors to purchase shares more easily. From September 2003, the number of shares per unit was reduced from 1,000
shares to 100 shares. Furthermore, we will continue to take into consideration the liquidity improvement of its shares.
4. Medium-term management strategy
In order for the Suzuki Group to continue to grow as a global corporate entity, in May 2005, the “Suzuki Medium-term
5-year Plan” has been established for a period up to March 2010. The basic policy of the plan is to promote R&D and
capital investment for further growth, and to establish a revenue base to support those investments, as well as to
develop human resources capable of leading the group to continued growth.
The plan lays out domestic and overseas strategies. In Japan, it calls for strengthened mini, small and subcompact
vehicle sales ability and proactive introduction of new products. Meanwhile, overseas, the plan provides for an increase
in the capacity of plants in India and Hungary that came online ten and twenty years ago and which are now reaching
the limits of their production capacity, as well as capital investment to improve quality, and the introduction of products
tailor-made to suit individual foreign markets.
In light of this, the Company’s business objectives are: to raise consolidated sales to over ¥3 trillion (outlined below),
consolidated ordinary income to ¥150 billion, and profitability to over 5% as soon as possible within the period of the 5-
year plan. To this end, the Suzuki Group (the Company, its subsidiaries and affiliates) plans ¥1 trillion in capital
investment over five years, and is brimming with enthusiasm to develop new products.
Our worldwide production targets are: 4.4 million motorcycles and 2.7 million automobiles.
MANAGEMENT POLICY
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