Driving force of Suzuki Motor eases back

The Yomiuri Shimbun

15:45 JST, February 25, 2021

Suzuki Motor Corp. Chairman Osamu Suzuki, 91, announced Wednesday he would retire in June and be appointed as senior adviser without representative rights upon retirement.

Suzuki said he decided to step down now that the company’s road map for self-driving technology and eco-car development has been determined, with the management structure shifted to one to be led by his eldest son, President Toshihiro Suzuki, 61.

However, the plan for electrification under the company’s medium-term management plan announced Wednesday was lacking in concrete measures.

Now without its “driving force,” the automaker will be tested to survive in the rapidly changing automobile industry under the new management team.

President at age 48

“I’m convinced that now is the right time to resign,” Osamu Suzuki said at an online press conference.

Suzuki became president in 1978 at the age of 48 and has led Suzuki’s management since then. He handed over the presidency to his son in 2015 and then did the same with the chief executive officer’s position in 2016, but he has continued to hold representative power as the company’s chairman and also to serve as chairman of the board of directors. He was a heavyweight in the auto industry and the “de facto head of the company” who was responsible for steering the company’s management.

At an upcoming annual shareholder meeting in June, he will step down not only as chairman but also as a board member.

“Even if I abandon my titles, I will remain active [as senior adviser]. I will neither run away nor hide,” Suzuki said, indicating that he would continue to offer advice to management.

Even so, an era is definitely coming to an end.

Advancing into India

One of Suzuki’s greatest achievements was to develop the company into a strong player in India.

Suzuki Motor was one of the first Japanese automakers to enter the Indian market and began production there in 1983. In India’s large automobile market, Suzuki’s market share is about 50%.

In Japan, the company has produced popular mini cars such as the Alto and the WagonR.

When Suzuki became president, sales were around ¥300 billion, which increased to about ¥3.5 trillion by the fiscal year ending March 2020.

The company has also been aggressive in forming alliances with its rivals.

Suzuki Motor entered into capital alliances with General Motors of the United States and Volkswagen of Germany, but moved to dissolve these alliances when it found that they did not produce the results it was aiming for.

In the end, the company chose to strengthen its relationship with Toyota Motor Corp. Both companies originated in Shizuoka Prefecture, and their founding families are close to each other. In 2019, Suzuki and Toyota decided to form a capital alliance.

Next-generation cars

The automotive industry is going through a “once-in-a-century” change. The challenge for Suzuki’s new organization led by his son is to win the competition to develop next-generation vehicles such as self-driving and electric vehicles.

Suzuki Motor launched a policy in the new medium-term management plan of investing a total of ¥1 trillion in research and development of electric and hybrid cars over five years from April 2021. It is aiming to increase global sales of four-wheeled vehicles to 3.7 million units — or 50% more than the number in the fiscal year ending March 2021 — on top of a 35% increase in motorcycle sales to 2 million units by the fiscal year ending March 2026.

However, with regard to electrification, the company did not indicate a specific date for the launch of EVs, with the president saying, “We will firmly establish technologies [such as electrification] in five years to survive.”