Suzuki 2010 Annual Report Download - page 20

SUZUKI MOTOR CORPORATION 19
Management Policy
1. Business operations basic policy
Ever since establishment, the 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 efcient, well-knit and healthy management.
2.Basicpoliciesforprotdistribution
We determine the prot 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 Group has a structure in which prots are highly dependent on overseas manufacturing plants. These are mainly located in
developing countries, and are therefore subject to exchange rate uctuations. To achieve stable growth, we need to further enhance
our corporate structure and prepare for unforeseen circumstances.
The management environment substantially changed from the latter half of the previous scal year, and sales have continued to
drop substantially, but we were able to record prots by vigorous cost reductions in every aspect.
The management environment still looks grim, but to express our gratitude for your daily support, we have paid ¥7 of year-end
dividend per share (annual dividend including interim dividend was ¥12 per share).
In future years, under the foregoing point of view, we will also determine the prot distribution based on the performance of scal
year.
3.Outstandingissues
The Group has reviewed every aspect of our business to strengthen our management practices placing “Let’s review the current
practices and stay true to the basics in order to survive the competition.” as our basic policy in promoting the growth strategy.
However, automobile sales declined in various regions of the world on account of the global nancial crises, and the situation we
are in has been difcult, with our sales for this scal year having dropped by more than 30% from the peak of the scal year ended in
March 2008.
To overcome this crisis, we have been making concerted efforts as a group with the slogan of “Let’s come up with new ideas to
overcome the huge challenges we face.” and “Let’s start again in all areas to address our 30% sales decrease.”
As specic measures, facing the fact of a large reduction in sales squarely, we promote the establishment of system to ensure
prots in the declining sales by cost reduction by “weight reduction of 1g and cost reduction of 1 yen per part,” squeezing of xed
expenses by “internal cost reduction initiative” and further reviewing of organizations and structure.
Next, as for the issues challenged by our major businesses of motorcycle business and automobile business, we will promote
launching of products t for the market needs, strengthening of sales forces and improving of the quality and productivity for motor-
cycles. Especially, we will strengthen the small motorcycle business in the Asian region where further growth can be expected.
In automobile business, we will promote product development and sales activities closely tied with both domestic and overseas
markets. In Japan, we will strengthen sales abilities and after sale activities in the Suzuki sales ofces nationwide to promote the
improvement of the customer satisfaction. We will try to create sales ofces loved by as many customers as possible in order to
achieve a sales increase. 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 prot has
been declining, we will try to rebuild by reviewing the sales structure etc.
In addition, in research and development, the environmentally friendly product development for protecting global environment
such as reduced emission gas, improved fuel efciency, 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 environ-
mental technologies.
Further, we make efforts for the development of high fuel efciency and low emission technologies such as diesel engine vehicles,
hybrid vehicles and electric vehicles mainly with the product development abilities for small cars, the strength of the Group, based on
the alliance with each company.
On December 9 last year, Suzuki Motor Corporation (the Company) and Volkswagen AG (VW) reached a common understanding
to establish a comprehensive partnership. In terms of product portfolio, global distribution and manufacturing capacities, both com-
panies ideally complement each other. The companies plan a joint approach to the growing worldwide demand for more environ-
mentally friendly vehicles.