Suzuki 2009 Annual Report Download - page 20

SUZUKI MOTOR CORPORATION 19
Management Policy
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. Basic policies for profit distribution
We determine the profit distribution based on the performances, dividend payout ratio, strengthening of the corporate
nature and full internal reserve for future business developments from the medium- to long-term viewpoint, with the emphasis
on the continuous and stable distribution.
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. To achieve stable growth, we need to
further enhance our corporate structure and prepare for unforeseen circumstances.
The management environment drastically changed in the latter half of this fiscal year, and the situation has become severer,
but the Company recorded profits for the full year. Therefore we have paid ¥16 as the ordinary dividend (including ¥8 of
interim dividend), the same as the previous fiscal year, for the full year of this fiscal year.
In future years, under the foregoing point of view, we will also determine the profit distribution based on the performance of
fiscal year.
Note: “the Company” = Suzuki Motor Corporation
3. Outstanding issues
We have placed “In order to survive, let us stop acting in a self-styled manner and get back to the basics” as our basic
policy in promoting the growth strategy, reviewed every aspect of our business to strengthen our management practices.
Automobile sales have dropped in various parts of the world, however, on account of the world financial crisis, and we are
faced with unprecedented crisis with the prospect of more than 30% fall in expected sales for the next year compared to
previous fiscal year.
To overcome this crisis, we have been making concerted efforts as a group with the slogan of “Try our ingenuity to
overcome difficulties.”
As specific measures, facing the fact of a large reduction in sales squarely, we promote the establishment of system to
ensure profits in the declining sales by cost reduction by “reduction of a gram and cost reduction of 1 yen per part,” squeezing
of fixed expenses by “internal cost reduction activities” and further reviewing of organizations and systems.
Next, as for the issues challenged by our major businesses of motorcycle business and automobile business, we will
promote launching of products fit for the market needs, strengthening of sales forces and improving of the quality and
productivity for motorbikes. Especially, we will strengthen the small motorbike business in the Asian region where further
growth can be expected.
In automobile business, the marketing activities and products supply in a close contact with the market will be executed. In
domestic market, we 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, we will try to improve SUZUKI brand
image by using the slogan of “Way of life” and increase the level of overseas bases through promotion of local procurement of
parts, cost reduction activities, further improvement of quality and further progress in productivity, as well as sales enhancement.
As to the business in North America that the profit has been declining, we will try to rebuild by reviewing the system of sales etc.
In addition, in research and development, the environmentally friendly product development for protecting global environment
such as reduced emission gas, improved mileage, resource saving and recycling has become more and more important.
In the limited research and development resources, we will consolidate power trains, standardize parts and concentrate
funding on environmental technologies.
Further, we make efforts for the development of high-mileage and low-emission technologies such as diesel engine cars,
hybrid cars and electric cars mainly with the product development abilities for small cars, the strength of our Group, based on
the alliance with each company.
Meanwhile, on June 1, 2009 (local time in the USA), General Motors Corporation (GM), our alliance partner, filed for Chapter
11 bankruptcy-court protection of the U.S. Bankruptcy Code, and GM is expected to be restructured as the New GM through
bankruptcy reorganization. And we intend to continue existing individual projects with the New GM.
We have decided to review “Suzuki medium term three-year plan (April 2008 - March 2011)” which was the targeted
management indexes and medium-term corporate management strategies on account of a substantial change in the economic
environment. We plan to announce the new plans based on the external environment at the appropriate time.