Japan
Sustainability Report 2022We will deliver products and services of superior value, with the aim of being a company that is essential to people and society
Toshihiro Suzuki
Representative Director and President
Reflections on Suzuki’s strengths as it celebrates its 103rd anniversary
Suzuki was founded in 1920 with loom manufacturing as its first business. In 1952, Suzuki entered the motor-vehicle field with the launch of the Power Free 36cc, 2-cycle auxiliary bicycle engine. Since then, Suzuki has contributed to people’s comfortable and fulfilling lives by providing user-friendly and affordable products, including motorcycles and automobiles. The Company has expanded its business not just throughout Japan, but also to international markets, providing people worldwide with a “means of mobility.” We have continued to make every effort to improve the daily lives of our customers as well as promote economic and social development. We are proud that we will soon be celebrating our 103rd anniversary.
Suzuki’s strengths include its extensive product lineup, which it has developed over many years, and its unique value chain, which enables it to deliver those products to customers around the world. Customers all across the world have embraced our diverse product offerings, which include automobiles, motorcycles, outboard motors and electric senior vehicles. This has allowed us to establish a strong management platform that is adaptable to changes in the external environment. Furthermore, Suzuki will move beyond the development, production, and popularization of products and services that satisfy customers’ diverse needs. Looking ahead, we will meet the challenge of creating innovative next-generation mobility services that have an impact on people’s daily lives and transportation infrastructure.
Changes in the automobile industry’s environment and Suzuki’s response
The global automobile industry is in the midst of a once-in-a-century transformation period. The industry must tackle priorities such as contributing to carbon neutrality through environmental technology and sophistication of autonomous technologies that lead to improved traffic safety. These priorities have emerged as the key issues that will determine the future success of automakers.
Among the many challenges facing the automobile industry, we are placing special emphasis on electrification initiatives to achieve carbon neutrality. Numerous automakers around the world are making a profound shift from traditional gasoline and hybrid vehicles to electric vehicles (EVs). Customers who are thinking about buying a car are increasingly asking us about the EV strategies that Suzuki will employ. Although we are moving forward with development in order to launch an EV into the market as soon as possible, I believe that we must also assess the EV product’s design and the timing of its introduction to the market with a level head. For example, numerous customers drive Suzuki’s compact cars, an area where we excel, because they support the affordability of those cars. A rise in the product price following the transition to EVs could diminish these advantages that Suzuki has in compact cars. We must also be cautious about whether the EV usage environment will be sufficiently developed in the future, particularly the expansion of charging infrastructure, which has a direct impact on user convenience. Suzuki will develop the right EVs for the right place at the right time, so to speak, that fit customer needs and usage patterns by balancing cost, driving range, and equipment. Our policy is to introduce EVs to the market at the proper time.
Aiming to be a company essential to people and society
The outlook for the automobile industry’s environment remains unpredictable, primarily due to increased global geopolitical risk and supply chain disruptions, in addition to the change of the whole life-style of human beings as a result of the spread of COVID-19. Automobile production constraints caused by tight supplies of semiconductors have not yet been completely alleviated. Under these conditions, we will continue to be cognizant of structural transformation, risk minimization, and sowing the seeds for the future, as we go about our daily operations.
As part of our structural transformation efforts, we will focus on simplifying operations, improving our corporate culture, and developing human resources. To dedicate ourselves to new types of work in areas such as electrification, carbon neutrality, and connectivity, we will identify wasteful jobs and processes that do not add value, and simplify operations by ceasing, changing, and systematizing operations in that sequence. Rather than thinking like we always have, we will need to transform our own mindset to deal with disruptive changes in conditions, as we harness digital technologies and other resources as needed. Transforming our corporate culture is another priority. Here, we will reaffirm the principle to “Establish a refreshing and innovative company through teamwork,” which is laid out in Suzuki’s Mission Statement, and foster a lively organization and an ambitious corporate culture by encouraging thorough communication among employees. We are also devoting considerable effort to diversity programs. In order to make our workplaces comfortable and productive for both men and women, we have already begun revising various systems, such as childcare leave. Human capital management has recently emerged as a key perspective on human resource development, and through this lens we will view education and training programs as forward-looking investments in our personnel. We will develop human resources to ensure that all employees can implement our Mission Statement and create corporate value.
In an effort to minimize risk, we have developed a system that can assess the impact of semiconductor shortages on production early on and adapt flexibly. We have accomplished this by requesting that our business partners maintain sufficient inventory and by visualizing our supply chains based on our trusting relationships with them. It is also crucial that we increase our efforts to enforce compliance. Suzuki inadvertently triggered two separate cases of misconduct relating to fuel efficiency and emissions tests in 2016 and final inspections in 2018. Since then, we have worked hard to restore trust by carefully adopting recurrence prevention measures and increasing compliance awareness among employees. These efforts are never-ending. We have commenced operations at the Kosai Plant’s new final inspection building, and have put in place a mechanism to ensure that tests are performed correctly using cutting-edge equipment. Moreover, we have continued to conduct Remember 5.18 activities, which are conducted annually with participation by all officers and employees, to ensure that the incidents of misconduct are not forgotten. We are determined to build a robust compliance system in terms of both tangible and intangible factors.
In terms of sowing the seeds for the future, we will work on carbon neutrality in India, Suzuki’s largest market. The Indian government aims to achieve carbon neutrality in 2070, which is far later than Japan’s target year of 2050. In India, there are still concerns about the supply of stable electricity, and fossil fuels play an important role in the power mix. Furthermore, the number of customers who can afford to buy expensive EVs is limited. In this context, Suzuki will need to collaborate with individuals to promote carbon neutrality so that India may strengthen its economy and its people can enjoy greater prosperity.
Specifically, we are focusing on the business of refining biogas obtained from cow dung. Cows are plentiful in India, and their dung produces methane, a gas with a high greenhouse gas effect. We are considering refining carbon neutral fuel for automobiles from this methane. This business is also expected to have other benefits, such as revitalizing farming communities, creating new jobs, and improving the energy self-sufficiency rate.
In terms of EVs, starting with the introduction of commercial mini-vehicle EVs in Japan in FY2023, we will then launch EVs in Europe and India in FY2024. Regarding Japanese mini-commercial vehicles, we are pursuing development while researching on-site usage patterns, driving characteristics and other factors, and coordinating our efforts with the Commercial Japan Partnership (CJP). For mini-EVs, we would like to explore questions such as “How do people truly use mini-vehicles as a means of mobility in regional areas of Japan?” and “What would an EV look like that customers who are now driving Suzuki vehicles could switch to without difficulty?” We will seek answers by confirming the “Three Actuals”—visiting the actual place, seeing the actual thing and understanding the actual situation, in order to develop the right EVs for the right place at the right time. We would like to develop products with value that only Suzuki can offer and that customers do not yet realize they need. Through our products, we want customers to say things like “This is the type of car I was looking for,” or “I really appreciate this service,” referring to their whole experience with Suzuki, including how products are sold and what kinds of services are provided.
Once again, I believe that the ideal profile of Suzuki for the future is to become a lifestyle infrastructure company that makes people happy and healthy and revitalizes the economy by resolving the daily mobility issues of numerous people through efforts such as the construction of infrastructure and the introduction of next-generation mobility services. We will continue to deliver products and services of superior value, with the aim of being a company that is essential to people and society. As we pursue sustained growth in our corporate value, we will also work diligently toward carbon neutrality and the realization of a sustainable society.