Suzuki 2008 Annual Report Download - page 3

2 SUZUKI MOTOR CORPORATION
A Message From the Management
In delivering our 2008 Annual Report, 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, we experi-
enced a mild recovery in our domestic operations
through increases in capital investments, etc., backed
by improvements in corporate profits. However, corpo-
rate profit has weakened recently, and business recov-
ery is at a standstill due to the sub prime loan problem in
the U.S., rapid changes in currency exchange rates,
price increases for raw materials, etc. Overseas, expan-
sion of Asian markets has resulted in recovery in the
global economy however, a economic slowdown is
spreading in the U.S. and Europe.
Under such circumstances, we are pleased that good
sales of automobiles in overseas markets has produced
consolidated net sales amounting to 3,502,419 million
yen (110.7% compared to the previous fiscal year). As
for consolidated income, an increase in research and
development costs, depreciation and overhead costs,
etc., were absorbed by increased sales, initial cost re-
duction and exchange gains, etc., resulting in operating
income totaling 149,405 million yen (112.4% compared
to the previous fiscal year, ordinary income totaling
156,904 million yen (112.7% compared to the previous
fiscal year), and current net income totaling 80,254 mil-
lion yen (107.0% compared to the previous fiscal year).
On the other hand, non-consolidated net sales in the cur-
rent fiscal year amounted to 2,031,639 million yen
(104.7% compared to the previous fiscal year), exceed-
ing 2 trillion yen for the first time. As for non-consolidated
income, increases in research and development costs,
depreciation and overhead costs, etc., absorbed by in-
creased sales, initial cost reductions, and exchange
gains, etc., resulted in operating income totaling 67,416
million yen (121.0% compared to the previous fiscal
year), ordinary income totaling 62,119 million yen
(100.9% compared to the previous fiscal year), and cur-
rent net income totaling 40,864 million yen (94.9% com-
pared to the previous fiscal year).
Dividends at the end of the current fiscal year were 8
yen per share (16 yen/year including interim dividends).
• Issues to deal with
The Suzuki Group is operating in a business environ-
ment that has been extremely unclear due to fluctuating
exchange rates, increasing material costs, etc., addi-
tionally competition within the industry has intensified
creating increasingly severe business conditions.
To cope with this severe situation, we have imple-
mented 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 re-evaluating our practices
in all areas in order to strengthen our management
structure. Also, to improve communication and coop-
eration within the company, we are promoting coopera-
tion between sections, strengthening communications,
ensuring compliance, etc., under the slogan, “Let’s talk
about any issues together.”
Regarding motorcycle operations, in order to develop a
profitable motorcycle business, we will continue ex-
panding 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.
Overseas, regarding poor sales of compact motorcycles
in Asia, we are promoting the introduction of products that
meet the needs of those markets, strengthening the sales
force, improving quality and productivity, etc. Regarding
the poor performance of our motorcycle and ATV busi-
ness in North America due to the aftermath of skyrocket-
ing gasoline prices, the sub prime loan problem, etc., we
will focus on the marketing of distinctive and unique large
motorcycles to turn around the situation.
In regard to our automobile operations, efforts will be
made to promote market-based production and busi-
ness activities in both domestic and overseas markets.
To increase sales in Japan, we will increase the number
of sales staff and educate them to strengthen the sales
force, and promote the expansion of Suzuki Arena
dealerships. In overseas markets, we will enhance the
brand using the slogan “Way of Life!” and strengthen
the sales force. We will also pursue the onsite procure-
ment of components, cost reductions, and further
heighten quality and productivity 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 260,000 units per year is being constructed
at the site of our Sagara plant with a planned launch of
production from this autumn. Regarding overseas facili-
ties, we are strengthening our production capabilities at
Maruti Suzuki India Ltd. etc.
We are also developing and introducing products that
meet the world’s four markets in an effective, speedy,
and timely manner. In conserving the global environ-
ment, we will promote the development of products that
are designed for low environmental impact through re-
duced exhaust emissions, improved fuel efficiency,
conserve natural resources, recycling, etc., and maxi-
mize the effectiveness of our strategic alliances with Fiat
in diesel engines, and with the General Motors Corpora-
tion in hybrid and fuel cell vehicles, etc.
The General Motors Corporation and Suzuki have had a
constructive partnership since August 1981, and we will
continue to promote concrete projects such as the co-
operative development of advanced technologies, our
joint venture in the CAMI project in Canada and devel-
opment of power train systems, complementary supply
of OEM products, global joint procurement, etc.