Suzuki 2007 Annual Report Download - page 2

A MESSAGE FROM THE MANAGEMENT
In delivering our Annual Report 2007, we wish to extend our
greetings to you.
Results for the current fiscal year
Regarding the business environment surrounding the Suzuki Group
during the current fiscal year, domestically there were some signs of
recovery in somewhat weak personal consumption, while changes in
corporate profits continued favorably. As a result, the economy has
been in the process of a gradual recovery with increases in capital
investment and improvement of employment and income
environments. Overseas, the world economy has been growing
steadily in spite of concern for the deceleration of the U.S. economy.
Under these circumstances we are pleased that strong demand for
automobiles in overseas markets and good sales of large motorcycles
in Europe and North America produced consolidated sales amounting
to ¥3,163,669 million (115% compared to the previous fiscal year)—our
first ever fiscal year with sales over ¥3 trillion. As for consolidated
income, increases in depreciation, research and development costs
and overhead costs, etc., were absorbed by increased sales, initial
cost reduction and exchange gains, etc. resulting in operating income
totaling ¥132,900 million (116.7% compared to the previous fiscal
year), ordinary income totaling ¥139,183 million (116.6% compared to
the previous fiscal year), and net income totaling ¥75,008 million
(113.7% compared to the previous fiscal year).
On the other hand, non-consolidated net sales in the current fiscal
year amounted to ¥1,939,806 million (114.8% compared to the
previous fiscal year). As for non-consolidated income, increases in
depreciation expenses, research and development expenses,
overhead costs, etc., absorbed by increased sales, initial cost
reductions, and exchange gains, etc., resulted in operating income
totaling ¥55,698 million (117.3% compared to the previous fiscal year),
ordinary income totaling ¥61,572 million (118% compared to the
previous fiscal year), and net income totaling ¥43,054 million (115.5%
compared to the previous fiscal year).
Dividends at the end of the current fiscal year were ¥8 per share
(¥14/year including interim dividends).
Revising the Medium Term 5-Year Plan
The Suzuki Group is operating in a business environment that has
been extremely unclear due to fluctuating exchange rates, etc.,
additionally competition within the industry has intensified creating
increasingly unfavorable business conditions.
To cope with this severe situation, we have implemented a basic
policy under the slogan “In order to survive, let us stop acting in a self-
styled manner and get back to basics” and are reevaluating our
practices in all areas in order to strengthen our management structure.
Furthermore, for the Suzuki Group to survive and develop in this
challenging business environment, we established in May of 2005, the
“Suzuki Medium Term 5-year Plan (April 2005 to March 2010)”, which
sets a consolidated sales target of ¥3 trillion and consolidated ordinary
income of ¥150 billion with an investment of ¥1 trillion by the
corporation and its group in plant and equipment.
The Suzuki Group has focused its energies on achieving this target
figure as early as possible before the end of March 2010. As a result of
our group’s efforts, and thanks to strong overseas sales of
automobiles, etc., we have achieved, ahead of the initial plan, the ¥3
trillion consolidated sales target in the current year. With the three
years remaining we have woven in major measure review and revised
the medium term plan.
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SUZUKI MOTOR CORPORATION
Revised Mid-Term Plan (ending March 2010) Initial Mid-Term Plan (ending March 2010)
Consolidated sales More than ¥3.5 trillion More than ¥3 trillion
Consolidated Ordinary income (rate) More than ¥175 billion (more than 5.0%) More than ¥150 billion (more than 5.0%)
Exchange Rate (after March 2009) U.S. $ = ¥105 U.S. $ = ¥100
1 € = ¥130 1 € = ¥130
Global Production Motorcycles more than 4.4 million units Motorcycles more than 4.4 million units
Automobiles more than 3 million units Automobiles more than 2.7 million units
Total Business Investment Over 5 Years ¥1 trillion ¥1 trillion
(end of March 2006 to end of March 2010)
Our basic policy for the next three years gives the highest priority to
investing in research and development, promoting equipment outlay to
further extend growth, and nurturing human resources to advance the
laying of the groundwork for a revenue base. This has led to every
member of the Suzuki Group continuing to working to achieve a
managerial goal by March 2010, which sets a consolidated sales target
of ¥3.5 trillion and a ¥175 billion target in consolidated ordinary income.
Operating results by sector
Regarding motorcycle operations, in order to develop a profitable
motorcycle business, we will continue expanding sales of our scooters
and large motorcycles in the domestic market, and in Europe and North
America we will promote products that enhance a “Sporty, Youthful,
and Unique” brand image derived from our racing activities.
In Asia, where demand for motorcycles is increasing rapidly due to
economic growth in the region, we will continue our efforts to introduce
products that meet the needs of those markets and also improve and
expand our production systems.
In regard to our automobile operations, efforts will be made to
promote market-based production and business activities in both
domestic and overseas markets. To increase sales in Japan, we are
transforming our Suzuki Arena dealers with additional staff and
education programs aimed at strengthening the sales force. In
overseas markets onsite procurement of components, cost reductions,
and further heightening of quality and productivity will be pursued in
order to strengthen our business base.
To deal with the active demands and chronic deficiency in overseas
production capabilities, a production facility dedicated to producing
mini vehicles and capable of producing 240,000 units per year was
constructed on the site of the Sagara plant. Regarding overseas
facilities, we have strengthened our production capabilities at Magyar
Suzuki Corporation, Maruti Udyog Ltd., Pak Suzuki Motor, etc.
Efforts will be made to develop products, in an effective and efficient
manner that closely suit each of the world’s four markets, and introduce
them in a timely fashion. In conserving the global environment, we will
promote the development of products that are designed for low
environmental impact by reducing exhaust emissions, improve fuel
efficiency, save on natural resources, facilitate recycling, etc., and
maximize the effectiveness of our strategic alliances with Fiat in diesel
engines, and with the General Motors Corporation in hybrid and fuel
cell vehicles, etc.
Although the General Motors group reduced their holdings of our
corporate stock to 3% in March 2006, the General Motors Corporation
and Suzuki have had ties since August 1981. We will continue to
promote concrete projects such as the cooperative development of
advanced technologies, our joint venture in the CAMI project in Canada
and midsized crossover SUV production, development of power train
systems, complementary supply of OEM products, global joint
procurement, etc.
Under the slogan “Small Cars for a Big Future” Suzuki has set out
our determination to continue striving to develop small cars and
environmentally friendly products, which meet our customer’s
demands, while also focusing on the key words “Smaller, Fewer,
Lighter, Shorter, and Neater” in all aspects of production, organization,
facilities, parts, environment, etc., in order to promote a highly efficient
and healthy business operation.
Also, our board members and employees will strictly adhere to all
statutes, social norms, and in-house rules, etc., act fairly and with
sincerity.
We look forward to the continued support and encouragement of all
of our stockholders.